The Effect of Cash Holdings on Audit Fee in Tehran Stock Exchange Companies

Document Type : Original Article

Authors

1 Associate Professor of Accounting, Shahid Chamran University of Ahvaz, Ahvaz, Iran

2 Assistant Professor of Economics, Shahid Chamran University of Ahvaz, Ahvaz, Iran

3 M.A. in Accounting, Shahid Chamran University of Ahvaz, Ahvaz, Iran

Abstract

Audit fee is one of the main subjects occupying both the employer’s and auditor’s mind. They must discuss the issue clearly. A variety of factors can affect audit fee, such as amount of cash holding by firms that is one of efficient factors on agency costs. In this paper, we examine auditors
Audit fee is one of the main subjects occupying both the employer’s and auditor’s minds. They must discuss the issue clearly. A variety of factors can affect audit fee, such as the amount of cash holding by firms that is one of efficient factors on agency costs. In this paper, we examine auditor’s response to determine audit fee under considering the amount of cash holding by firms. For this purpose, the required data for this research is collected from eighty companies listed in Tehran Stock Exchange for a period of six years between 2009 and 2015. The Statistical method for hypothesis testing is multivariate regression that examines the relation between cash holding and audit fee. The results of the research show that by making other factor constants, there is a positive relation between cash holding and audit fee. This relation reflects that auditor’s response to different levels of cash holdings as one of agency costs.
response to determination of audit fee under considering the amount of cash holding by firms. For this purpose, the required data for this research is collected from eighty companies listed in Tehran Stock Exchange for a period of six years between 2009 and 2015. Statistical methods for hypothesis testing is multivariate regression that examine the relation between cash holding and audit fee. The results of research show that by stabilizing other factors, there is a positive relation between cash holding and audit fee. This relation reflects that auditors response to different levels of cash holdings which is one of agency costs.

Keywords

Journal of Iranian Accounting Review
Volume 5, Issue 18
June 2018
Pages 107-122

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