Inquiry letter types, accountants' responses, and audit fees: Evidence from China
Weidong Zhang
School of Accountancy, Jiangxi University of Finance & Economics, Nanchang, China
Search for more papers by this authorHongrui Zheng
School of Management and Economics, Beijing Institute of Technology, Beijing, China
Search for more papers by this authorCorresponding Author
Jenny Jing Wang
School of Business, University of Wollongong, Wollongong, New South Wales, Australia
Correspondence
Jenny Jing Wang, School of Accounting, Economics and Finance, University of Wollongong, Wollongong, NSW 2522, Australia.
Email: [email protected]
Search for more papers by this authorZihuang Chen
School of Accountancy, Jiangxi University of Finance & Economics, Nanchang, China
Search for more papers by this authorZhenghan Luo
Adams Smith Business School, University of Glasgow, Glasgow, UK
Search for more papers by this authorWeidong Zhang
School of Accountancy, Jiangxi University of Finance & Economics, Nanchang, China
Search for more papers by this authorHongrui Zheng
School of Management and Economics, Beijing Institute of Technology, Beijing, China
Search for more papers by this authorCorresponding Author
Jenny Jing Wang
School of Business, University of Wollongong, Wollongong, New South Wales, Australia
Correspondence
Jenny Jing Wang, School of Accounting, Economics and Finance, University of Wollongong, Wollongong, NSW 2522, Australia.
Email: [email protected]
Search for more papers by this authorZihuang Chen
School of Accountancy, Jiangxi University of Finance & Economics, Nanchang, China
Search for more papers by this authorZhenghan Luo
Adams Smith Business School, University of Glasgow, Glasgow, UK
Search for more papers by this authorAbstract
This study examines the impact of various types of inquiry letters on audit pricing using samples from Shenzhen and Shanghai listed companies during the 2015–2020 period. We found that the audit fees for receiving financial report inquiry letters were higher than those for receiving non-financial ones. In particular, when the entity being audited received annual report inquiry letters concerning internal control and requested the accounting firm to verify and respond, the audit fees for that company for the following year were higher. This study identified the mechanisms by which inquiry letters affect certified public accountant (CPA) charges.
Open Research
DATA AVAILABILITY STATEMENT
The data that support the findings of this study are available on request from the corresponding author. The data are not publicly available due to privacy or ethical restrictions.
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