The relationship between IFRS experience and audit fees in China

• Main Author: Xinyu, Fu
• Format: Thesis
• Language: English; English; English
• Published: 2019
• Subjects: HF5601-5689 Accounting; HF5001-6182 Business; HF1-6182 Commerce
• Online Access: https://etd.uum.edu.my/9663/1/s823831_01.pdf; https://etd.uum.edu.my/9663/2/s823831_02.pdf; https://etd.uum.edu.my/9663/3/s823831_references.docx; https://etd.uum.edu.my/9663/

This study intended to provide evidence of the effect of the IFRS convergence process on audit fees in China. Moreover, the study investigates whether the integration of IFRS would increase audit costs by studying the relationship between IFRS experience and audit fees for Chinese listed companies. This study gathered data from annual reports of 30 A-share and 30 A+H shares of Chinese manufacturing firms listed in Shanghai and Shenzhen stock exchange and Hong Kong stock exchange, respectively for the period 2016 to 2018. Meanwhile, this study quantitatively studies the relationship between the IFRS experience of the auditor and IFRS experience of company and audit fees of the company. Based on an analysis of the study, when the company implement IFRS, it needs to pay auditors with IFRS expertise, higher audit fees, thus increasing the audit cost of the company. However, the study shows that a company with IFRS experience does not affect audit fee. Moreover, this study offers additional evidence for the study of the audit fees generated by the IFRS convergence in China. Therefore, this study also puts forward suggestions that Chinese firms and local audit firms must pay attention to their IFRS-related auditing skills.