Management Entrenchment, Agency Problem and Audit Fees

@article{Wang2011ManagementEA,
  title={Management Entrenchment, Agency Problem and Audit Fees},
  author={Xinhua Wang and Bibo Yang},
  journal={Asian Journal of Finance and Accounting},
  year={2011},
  volume={3}
}
This study examines the association between audit fees and management entrenchment, which is proxied by Bebchuk et al. (2005) entrenchment index. The results show that audit fees are significantly positively correlated with Bebchuk et al. (2005) entrenchment index controlling for other factors. Further results show that the positive relation between audit fees and the entrenchment index exists only in firm with low growth opportunity and high free cash flow (i.e. firms with severe Jensen agency… Expand

Tables from this paper

The Effects of Corporate Characteristics on Managerial Entrenchment
The present study aims to assess the relationship between some corporate factors and managerial entrenchment in companies listed on the Tehran Stock Exchange during 2011-2017. Panel data regressionExpand
Investigating the Relationship between Institutional Ownership and Audit Fees
Institutional owners possess a large portion of the company stocks. Regarding the separation of the ownership from the management in a firm, the pivotal role of these owners in controlling andExpand
Managerial entrenchment and payout policy: A catering effect
Abstract Agency theory suggests that entrenched managers are less likely to pay dividends. However, according to the catering theory, external pressures from investors can force managers to increaseExpand
Audit Fees and Agency Costs: An Empirical Examination of Companies Listed on the Amman Stock Exchange
The objective of this study is to empirically investigate the impact of agency costs of free cash flow (FCF) on audit fees and to examine the impact of growth level on the FCF and audit feesExpand
Is Stock Price Synchronicity a Measure of Noise or Stock Price Informativeness: Evidence from Audit Pricing Model
It is an unsettled issue of whether stock price synchronicity (hereafter SYN) measures market-wide noise or market-wide informativeness. The Sarbanes-Oxley Act (hereafter SOX) provides anExpand
Impact of firm’s specific factors on audit fee of quoted consumer goods firms
How to cite this paper: Musa, W. A., Salman, R. T., Amoo, I. O., & Subair, M. L. (2020). Impact of firm’s specific factors on audit fee of quoted consumer goods firms. Corporate Governance andExpand

References

SHOWING 1-10 OF 32 REFERENCES
A test of the free cash flow and debt monitoring hypotheses:: Evidence from audit pricing
Abstract This study examines the association between free cash flow (FCF) and audit fees. The association is expected given Jensen's argument that managers of low growth/high FCF firms engage inExpand
Free Cash Flow, Debt Monitoring, and Audit Pricing: Further Evidence on the Role of Director Equity Ownership
This paper tests the hypothesis that the positive association between Free Cash Flow (FCF) and audit fees is stronger (weaker) for firms with low (high) levels of director equity ownership. Based onExpand
A Revealed Preference Approach to Understanding Corporate Governance Problems: Evidence from Canada
By studying the gap between the discount rates used by executives and shareholders, we assess the extent to which governance problems distort firm behavior. The estimation strategy recovers discountExpand
Takeover Threats and Managerial Myopia
  • J. Stein
  • Economics
  • Journal of Political Economy
  • 1988
This paper examines the familiar argument that takeover pressure can be damaging because it leads managers to sacrifice long-term interests in order to boost current profits. If stockholders areExpand
The Effect of Capital Structure When Expected Agency Costs are Extreme
We provide new evidence that debt creates shareholder value for firms that face agency costs. Our tests are unique in two respects. First, we focus on a sample of firms with potentially extremeExpand
Determinants of audit fees for quoted UK companies
This study reports further evidence as to the determinants of the audit fees paid by quoted companies in the UK. It outlines a framework based on the findings from semi-structured interviews withExpand
What Matters in Corporate Governance?
We investigate which provisions, among a set of twenty-four governance provisions followed by the Investor Responsibility Research Center (IRRC), are correlated with firm value and stockholderExpand
Agency Cost of Free Cash Flow, Corporate Finance, and Takeovers
The interests and incentives of managers and shareholders conflict over such issues as the optimal size of the firm and the payment of cash to shareholders. These conflicts are especially severe inExpand
The boundaries of financial reporting and how to extend them
In this study we investigate the usefulness of financial information to investors in comparison to the total information in the marketplace.1 Our evidence indicates that the usefulness of reportedExpand
The Pricing Of Audit Services - Theory And Evidence
The question of the existence of competition among auditors has been the subject of considerable discussion in recent years. More specifically, the "Big Eight" firms as a group have been accused ofExpand
...
1
2
3
4
...