Auditor size, audit fees and multinational enterprises : an investigation of selected international markets /
This fair investigates audit fee determinants in four
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| Format: | Thesis Book |
| Language: | English |
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[Place of publication not identified] :
[publisher not identified] ;
1998.
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| Online Access: | http://proxy.library.tamu.edu/login?url=http://proquest.umi.com/pqdweb?did=732820381&sid=1&Fmt=2&clientId=2945&RQT=309&VName=PQD |
| Summary: | This fair investigates audit fee determinants in four countries; india, Malaysia, Hong Kong, and the United Kingdom. The OLI theory of the multinational enterprise (MNE) suggests that a Big 6 audit fee premium will more likely exist in developed countries, such as Hong Kong and the UK, than in developing countries, such as India and Malaysia. The results of a least squares regression analysis support this prediction for India, Hong Kong, and the United Kingdom, but not for Malaysia. The study also addresses whether the magnitude of the Big 6 audit fee premium varies depending on the degree of multinationality of the client. MNE clients demand high levels of audit quality to satisfy international investors, and MNE clients place more value on the international reputations of the Big 6 auditors than do domestic firms. Accordingly, Big 6 auditors should increase fees for multinationals more than non-Big 6 auditors. Results indicate that Big 6 firms charge higher premiums for MNEs in Malaysia and in Hong Kong, but not in the UK. This relation could not be investigated in India due to data limitations. Finally, the study examines whether the location of a multinational client's subsidiaries has an effect on audit pricing. The results indicate that, in Malaysia, Big 6 auditors increase their fees for multinational clients with many subsidiaries located in developed countries relative to clients with subsidiaries located in developing countries. In case of audit failure, Big 6 firms face additional risk of reputation impairment for clients with subsidiaries in developed countries than for clients without such subsidiaries. In addition, the magnitude of the Big 6 audit fee premium increases for clients with relatively more subsidiaries in developed countries. In Malaysia, the existence of developed-country subsidiaries has a greater effect on the pricing of audit services for Big 6 firms than for non-Big 6 firms. The location of client subsidiaries does not seem to effect audit pricing in the UK market. In Hong Kong, the location of client subsidiaries only affects pricing by the non-Big 6 firms. Data limitations prevented analysis of subsidiary lavations in India. |
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| Item Description: | Vita. |
| Physical Description: | xi, 82 leaves : illustrations ; 28 cm. Issued also on microfiche from University Microfilm Inc. |
| Bibliography: | Includes bibliographical references: pages 79-81. |