The relationship between the companies’ political connections and audit fees
ISSN: 1359-0790
Article publication date: 7 July 2020
Issue publication date: 7 December 2020
Abstract
Purpose
The purpose of this study is to investigate whether the political connections of companies are correlated with auditor selection, audit fees and abnormal audit fees.
Design/methodology/approach
The research data contains 756 observations of companies listed on the Tehran Stock Exchange during 2011-2019. In this study, the relationship between companies with political relationships and the selection of a qualified auditor, audit fees and abnormal audit fees are reviewed. The regression used for test the hypotheses.
Findings
The results of hypotheses testing indicate that there is a positive and significant correlation between the political relationships of companies and certified auditor selection, auditing fees and abnormal audit fees. In addition, the political relationships of companies have a significant and inverse effect on the relationship between institutional ownership and auditing fee and abnormal audit fees. It was also found that there is a positive and significant correlation between companies and political relationships and abnormal audit fees.
Originality/value
So far several studies conducted on audit fees, however, no study conducted on the relationship of political relationship of the companies with audit fees and the results of the current study may bridge the gap in the current field.
Keywords
Citation
Salehi, M. (2020), "The relationship between the companies’ political connections and audit fees", Journal of Financial Crime, Vol. 27 No. 4, pp. 1123-1141. https://doi.org/10.1108/JFC-04-2020-0066
Publisher
:Emerald Publishing Limited
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