Cultural Attributes and International Development of Audit Profession

• In Event: Audit Profession

Abstract

Abstract: We examine the impact of informal cultural attributes, such as societal generalized trust (hereafter “trust”) and civic cooperation, on audit fees and Big N presence in the country-specific audit markets. We find that Big N auditors’ presence is stronger in countries with higher levels of civic cooperation, and that audit fees are higher in countries with higher trust and civic cooperation. Furthermore, the positive impact of societal trust and civic cooperation on audit fees and Big N presence is weakened in countries with stronger levels of investor protection. These results suggest that informal institutions and formal institutions act as substitutes in forming demand and supply for audit services.

Authors

• W Robert Knechel, University of Florida

• Natalia Maksimovna Mintchik, University of Cincinnati

• Mikhail Pevzner, University of Baltimore

• Uma Velury, University of Delaware