The impact of managerial ownership on audit fees: Evidence from Portugal and Spain

Autor:	Sandra Alves
Jazyk:	angličtina
Rok vydání:	2023
Předmět:	Agency theory managerial ownership audit fees alignment of interest hypothesis entrenchment hypothesis Finance HG1-9999 Economic theory. Demography HB1-3840
Zdroj:	Cogent Economics & Finance, Vol 11, Iss 1 (2023)
Druh dokumentu:	article
ISSN:	23322039 2332-2039
DOI:	10.1080/23322039.2022.2163078
Popis:	AbstractThis study examines the impact of managerial ownership on audit fees in a context of concentrated ownership and poor investor protection. Using samples of Portuguese and Spanish listed companies for the period 2010–2021, the results of this research suggest that there is a non-linear relationship between managerial ownership and audit fee which corresponds to a pattern of “alignment-entrenchment-alignment”. In Portugal and Spain, the convergence of interest effect dominates the entrenchment effect in the low and high ranges of managerial ownership, leading to the conclusion that a policy of providing management with amounts of equity within these ranges of managerial ownership should reduce agency costs and decrease audit fees. In contrast, in Spain, the entrenchment effect dominates the convergence of interest effect in the intermediate range of managerial ownership, which have the effect of increasing audit fees.
Databáze:	Directory of Open Access Journals
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