TITLE:
City-Level Audit Economies of Scale and Audit Fees
AUTHORS:
Xiaping Ye
KEYWORDS:
City-Level, Economies of Scale, Audit Fees
JOURNAL NAME:
Modern Economy,
Vol.7 No.11,
October
27,
2016
ABSTRACT: All dates are from China companies between 2010 and
2014. From the aspect of the urban area level, the article explains the
influence of the geographical positions of the accounting firms and client company and the size of the accounting
firm on audit fees. There is a significant
correlation between the fees and the distance. The results suggest that
geography is significant and positively affects audit fees if audit firm and client company are in the same area;
at the same time, audit firms’ scale economies can reduce audit fees for the study based on city-level (if
audit firm and the client company are in the same area). Specially, audit
location affects audit fees more significantly when audit firm has scale economy.
These results suggest that geography and
economies of scale affect audit fees.