Employee quality and audit fee: evidence from China |
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| Authors: | Xing Li Xia Chen Baolei Qi Gaoliang Tian |
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| Affiliation: | 1. School of Management, Xi’an Jiaotong University, Xi’an, China;2. School of Accounting, Zhongnan University of Economics and Law, Wuhan, China |
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| Abstract: | This study investigates the association between employee quality and audit fee. Using data for firm-level employee quality (as proxied by employee education) from Chinese listed firms from 2011 to 2018, we find that firms operated by high-quality employees enjoy lower audit charges. The association between employee quality and audit fee is more pronounced in firms with a culture of high integrity. Our 2SLS estimation helps us establish a causal link between employee quality and audit fee. The final validity tests suggest that high-quality employees contribute to lower audit fee by reducing audit risk and audit effort. |
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| Keywords: | Audit effort Audit fee Audit risk Employee quality Financial reporting quality |
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