Social Capital and Audit Fees
——An Empirical Study based on Chinese A-share Listed Companies

Abstract

Abstract: Social capital stock reflects social members′ consciousness of mutual cooperation and integrity level. This paper starts from cognitive and structural types two dimensions of social capital and takes A-share listed companies from 2009 to 2014 as samples to test the influence of social capital on audit fees by using multiple regression and Logistic model. The conclusions of empirical study confirm that firms with high social capital stock,which are located in the same city with headquarters,pay lower audit fees; compared with structural social capital, the impact of cognitive social capital on audit fees is more obvious; higher social capital not only can reduce auditors′ human resources investment, but also can decrease audit-related litigation risk. That auditors refer to the social capital stock of the city where company headquarters is located to conduct audit pricing decision shows in the case of dominant mechanism to be improved, the recessive mechanism can play a good supplementary effect. Therefore, improving social capital stock is conducive to broadening the channels of information sharing, reducing transaction costs, and promoting social division of labor.

Key words: audit fees, social capital, client risk, human resources investment

LIU Ying-fei, DING Xi-han. Social Capital and Audit Fees ——An Empirical Study based on Chinese A-share Listed Companies[J]. 商业研究.

References

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Social Capital and Audit Fees ——An Empirical Study based on Chinese A-share Listed Companies

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