Study On The Impact Of Contingent Disclosure On Audit Fees

Contingent matters are an uncertain business and one of the important economic businesses of an enterprise.With the continuous development of the economy,the competition between enterprises has become increasingly fierce.And the economic business has become more and more complicated,which has made the uncertainties in business operations gradually increasing.Under the risk-oriented audit mode,the CPA needs to identify the audit risk of the audited entity,determine the audit plan,and implement the audit process.The collection of audit fees is closely related to the audit risk of the audited entity.Then,whether a contingent event is a moderately uncertain matter will affect the CPA's judgment on the risk of the audited entity and the conduct of the audit work,thus affecting the changes in audit fees.Will the impact of accounting firms of different Sizes be different?The following part of this paper will study this issue,and it has certain practical guiding significance for listed companies and accounting firms.This paper mainly uses the method of empirical research on contingent events and audit fees.First of all,the relevant literature on contingent issues and audit fees at home and abroad was collated and analyzed in this paper.Secondly,based on principal-agent theory,insurance theory,signal theory and the theory of fiduciary economic responsibility,the theoretical analysis is carried out and the corresponding hypotheses are put forward.Thirdly,the relevant data of listed companies from 2011 to 2017 were collected and analyzed.The OLS model was used to study the impact of estimated liabilities and off-balance-sheet contingent on audit fees,and further verified whether the reaction of the accounting firm with different scales is different.Through empirical research,it is found that companies with estimated liabilities have higher audit fees,and the higher the estimated liabilities,the higher the audit fees.Disclosure of off-balance-sheet events can also lead to an increase in audit fees.For accounting firms of different Sizes,the impact of contingent events on audit fees is different.Larger firms will choose to increase audit fees in the face of contingency issues in the audited entity.