Hometown sentiment: CEO hometown identity and company audit fees
ISSN: 0268-6902
Article publication date: 8 July 2022
Issue publication date: 12 October 2022
Abstract
Purpose
The purpose of this study is to examine the impact of chief executive officer (CEO) hometown identity on company audit fees in the Chinese setting.
Design/methodology/approach
This study uses data from Chinese public companies in the Shanghai Stock Exchange and the Shenzhen Stock Exchange for the period 2008–2019. This study investigates the impact path of CEO hometown identity on company audit fees and further examines the moderating role of internal and external governance level.
Findings
This study finds that CEO hometown identity is significantly and negatively related to company audit fees. In addition, CEO hometown identity can reduce audit fees by alleviating agency risk and litigation risk. Moreover, the negative effect of CEO hometown identity on audit fees is more pronounced in companies with a higher percentage of institutional investors shareholding and more analysts tracking quantity.
Practical implications
This study may provide new references for executives’ selection, auditors’ optimization decisions and regulators’ information disclosure system.
Originality/value
This study contributes to the literature by exploring the effect of CEO hometown identity on audit fees in the context of China.
Keywords
Acknowledgements
The authors would like to acknowledge the financial support from the Social Science Foundation Project of Hebei Province (Grant No. HB21GL045), Social Science Development Research Project of Hebei Province (Grant No. 20210301124) and Colleges and Universities Humanities and Social Science Key Research Base Project of Hebei Province (Grant No. JJ2112). Meanwhile, the authors are grateful to the anonymous reviewers for their valuable and constructive comments, which led to a significant improvement in the quality of the paper.Funding statement: 1. Social Science Foundation Project of Hebei Province (HB21GL045) 2. Social Science Development Research Project of Hebei Province(20210301124) 3. Colleges and Universities Humanities and Social Science Key Research Base Project of Hebei Province(JJ2112).Data availability statement: The data used to support the findings of this study are available from the corresponding author upon request.
Citation
Lv, J., Zhang, S. and Zhang, S. (2022), "Hometown sentiment: CEO hometown identity and company audit fees", Managerial Auditing Journal, Vol. 37 No. 8, pp. 993-1016. https://doi.org/10.1108/MAJ-01-2022-3431
Publisher
:Emerald Publishing Limited
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