Does the Annual Report Inquiry Letter Affect the Audit Fees?
——Empirical Evidence Based on Listed Companies in Shanghai and Shenzhen Stock Exchanges
AND SHENZEN STOCK EXCHANGE
CHEN Shuo1, ZHANG Ran1, CHEN Si2
1.Guanghua School of Management, Peking University, Beijing 100871, China;
2.School of Public Finance and Tax, Central University of Finance and Economics, Beijing 100081,China
This paper takes the annual report inquiry letters sent by Shanghai and Shenzhen Stock Exchanges between the years of 2015 and 2016 as samples to study the impact of the annual report inquiry letters of stock exchange on the audit fees of listed companies. The results show that: after controlling other factors, the listed companies which receive the annual report letter pay higher audit fees than the listed companies which do not receive the annual report letter. Furthermore, the analysis of the characteristics of the inquiry letter shows that the more the number of questions covered in the annual report and the more the number of the times that inquiries are made, the higher the audit fees are. This study enriches the related literature of audit fees and external supervision. It not only reveals the auditor’s adjustment model of audit fees in face of the potential risks of customers, but also serves as an early warning to the external supervision of auditors.
CHEN Shuo, ZHANG Ran, CHEN Si.Does the Annual Report Inquiry Letter Affect the Audit Fees?
——Empirical Evidence Based on Listed Companies in Shanghai and Shenzhen Stock Exchanges
AND SHENZEN STOCK EXCHANGE[J] Economic Survey, 2018,V35(4): 158-164
2018 
