The Effect Of Corporate Governance On Ratios Of Audit Fee To Asset

Based on Obtaining 1060 samples from listed companies disclosed audit fee of annual financial reports in 2004, 2005 and 2006 year, and using regression's method, this paper analyzes the impact of characteristics of Corporate Governance on the ratios of audit fee to asset (ROF) and whether each determinant has consistent relationship with ratios of audit fee to asset during the three years. Our research finds that ROF is significantly negatively associated with that holding shareholder is government, independent director proportion and manager ownership. Stock right all together degree obviously influenced on ROF, but whether the influence is positive or negative needs to be verified. ROF is significantly positively associated with instauration of Committee on Public Accounts on 2004. However, that holding shareholder is Non-governmentally operated enterprise, whether chairman of board is separated from manager and meeting times of board of directors didn't obviously influence on ROF. Moreover, before the analysis of the impact of characteristics of Corporate Governance on ROF, by comparing the regression results of the audit fee model and the ratios of audit fee to asset model, we validate that the significant determinants of ratios of audit fee to asset is the same as that of audit fee, the explanatory power of ratios of the audit fee to asset model is higher than that of the audit fee model far away. Consequently, we validate the feasibility of investigating determinants from the angle of ratios of audit fee to asset.