The Effects Of Internal Control Quality And Media Attention On Audit Fee

Audit fee is the consensus between the accounting firms and clients.It not only reflects the relationship between supply and demand in the audit market,but also directly relates to audit quality.In order to protect the interests of investors and strengthen the supervision of audit quality,regulators have issued a series of policies to standardize the information disclosure of listed companies and the audit pricing of accounting firms.With the development of risk oriented auditing,internal control is becoming increasingly important for the corporate governance and audit.More and more scholars began to explore the influence of internal control on audit quality from the perspective of audit fee.On the basis of the previous researches,this paper studies the affects of the internal control quality and its changes on audit fee.In addition,with the rapid development of information technology and media industry,the governance role of media in the market economy cannot be ignored.Therefore,the paper brings the media attention into the research framework of internal control and audit fee,and further explores the moderating effects of the media attention on the relationship between internal control quality and audit fee.This paper combines normative research and empirical research.On the basis of the information asymmetry theory,insurance theory and agenda setting theory,the paper chooses a sample of A-shares listed companies from 2010 to 2016.We find that:(1)The internal control quality is inversely related to audit fee;(2)Compared with the previous period,the improvement of the internal control quality will not significantly reduce the audit fee,but the deterioration will lead to a marked increase in audit fee;(3)The negative reports of newspaper,policy oriented negative reports are positively correlated with audit fee;(4)The higher negative reports of newspaper,policy oriented reports,policy oriented negative reports and market oriented negative reports can enhance the negative relationship between the internal control quality and audit fee;(5)The negative reports of newspaper,policy oriented reports,policy oriented negative reports and market oriented negative reports have a moderating effect on the relationship between the changes of internal control quality and the changes of audit fee.For the auditees with higher negative reports of newspaper,policy oriented negative reports and market oriented negative reports,the improvement of the internal control quality will have a more significantly negative impact on the changes of audit fee.For the auditees with higher negative reports of newspaper,policy oriented reports and policy oriented negative reports,the deterioration of the internal control quality will have a more significantly negative impact on the changes of audit fee.