The Investigation of the Association between CEO Tenure and Financial Expertise to Audit Fee

Document Type : Research Paper

Authors

1 Assistant Prof. in Accounting, Faculty of Economics and Administrative Sciences, Ferdowsi University, Mashhad, Iran

2 MSc. in Auditing, Faculty of Economics and Administrative Sciences, Ferdowsi University, Mashhad, Iran

Abstract

The main purpose of this study is to investigate the relation between CEO tenure and financial expertise and audit fees. Using samples of firms (129 firms) in the Tehran Stock Exchange, the results show that, from 2008 to 2015 there’s a positive significant relationship between CEO tenure and audit fees. That is, longer CEO tenure is associated with higher audit fees. Also, we find a negative association between CEO’s financial expertise and audit fees. This finding shows that those firms the CEOs of which have financial expertise pay lower audit fees, compared to the other firms. In addition, the results of the research extra analysis shows that the simultaneous effects of financial expertise and CEO tenure have a significant negative on audit fee. This result indicates that CEO’s financial expertise is one of the important factors for the auditors in evaluating the audit risk

Keywords

References

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Accounting and Auditing Review
Volume 24, Issue 1
2017
Pages 81-102

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