COSO2013 Adoption and Audit Fees

• In Event: Continental Breakfast and Research & Education Forum
  In Paper Session: Table 9: Audit Fees II

Abstract

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) requires that firms update the Internal Control—Integrated Framework from the COSO1992 Framework to the COSO2013 Framework starting December15, 2014. In this paper, we examine the impact of COSO 2013 adoption on audit fees.Using a sample of S&P1500 nonfinancial firms, we find that audit fees increase upon the adoption of the COSO2013 Framework. Our results are robust to the control of many control variables, a matched sample analysis and a change analysis. Our results add to the stream of research on COSO’s framework for internal control, and havesignificant implicationsfor regulators, auditors and companies.

Authors

• Kunsu Park, University of Hawaii-Manoa

• Juan Qin, University of Hawaii at Manoa