A test of the free cash flow and debt monitoring hypotheses: Evidence from audit pricing

被引：144

作者：

Gul, FA ^{[1
]}

Tsui, JSL ^{[1
]}

机构：

[1] City Univ Hong Kong, Dept Accounting, Kowloon, Hong Kong

来源：

JOURNAL OF ACCOUNTING & ECONOMICS | 1997年 / 24卷 / 02期

关键词：

free cash flow; debt monitoring; growth opportunities; audit pricing; INVESTMENT OPPORTUNITY SET; AUSTRALIAN MARKET; AGENCY COSTS; POLICIES; PRICES; SIZE;

D O I：

10.1016/S0165-4101(98)00006-8

中图分类号：

F8 [财政、金融];

学科分类号：

0202 ;

摘要：

This study examines the association between free cash flow (FCF) and audit fees. The association is expected given Jensen's argument that managers of low growth/high FCF firms engage in non-value-maximizing activities. These activities increase auditors' assessments of inherent risk and, in turn, audit effort and fees. Jensen also argues debt mitigates the non-value-maximizing activities. Thus, the positive FCF/audit fees association is expected to be weaker for low growth firms with high debt than for similar firms with low debt. Regression results for a sample of low growth Hong Kong firms support these hypotheses. (C) 1998 Elsevier Science B.V. All rights reserved.

引用

页码：219 / 237

页数：19

共 28 条

[1] SCREE TEST FOR NUMBER OF FACTORS [J].

CATTELL, RB .

MULTIVARIATE BEHAVIORAL RESEARCH, 1966, 1 (02) :245-276

[2]

CHRISTIE AA, 1994, ACCOUNT REV, V69, P539

[3] INVESTMENT OPTIONS, ASSETS IN PLACE, AND THE RISK OF STOCKS [J].

CHUNG, KH ;

CHAROENWONG, C .

FINANCIAL MANAGEMENT, 1991, 20 (03) :21-33

[4] Auditor brand name reputations and industry specializations [J].

Craswell, AT ;

Francis, JR ;

Taylor, SL .

JOURNAL OF ACCOUNTING & ECONOMICS, 1995, 20 (03) :297-322

[5]

DANGELO LE, 1981, J ACCOUNT ECON, P183

[6]

DEFOND ML, 1992, AUDITING-J PRACT TH, V11, P16

[7]

FRANCIS JR, 1988, ACCOUNT REV, V63, P663

[8] AUDIT PRICES, PRODUCT DIFFERENTIATION, AND SCALE ECONOMIES - FURTHER EVIDENCE FROM THE AUSTRALIAN MARKET [J].

FRANCIS, JR ;

STOKES, DJ .

JOURNAL OF ACCOUNTING RESEARCH, 1986, 24 (02) :383-393

[9] THE EFFECT OF AUDIT FIRM SIZE ON AUDIT PRICES - A STUDY OF THE AUSTRALIAN MARKET [J].

FRANCIS, JR .

JOURNAL OF ACCOUNTING & ECONOMICS, 1984, 6 (02) :133-151

[10]

FRANCIS JR, 1987, ACCOUNT REV, V62, P145

← 1 2 3 →