Managerial Incentives and Audit Fees: Evidence from the Mutual Fund Industry

James Ross Booth, Lena Chua Booth, Daniel Deli
2012 Accounting and Finance Research  
We examine the relation between audit fees and managerial incentives in the mutual fund industry. We find that audit fees are higher when managerial incentives with respect to reporting are poor. Our results suggest that the auditing profession, at least to some extent, recognizes the adverse incentives created by certain organizational and contracting arrangements and prices auditing services to reflect those adverse incentives.
doi:10.5430/afr.v1n1p76 fatcat:kcv74dqtxrdm3bqkg6wxobx6gy