هزینه سرمایه سهامداران و مشغله شریک حسابرسی
1- INTRODUCTION
2- LITERATURE AND HYPOTHESIS
3- RESEARCH DESIGN
4- RESULTS
5- CONCLUSION
REFERENCES
CONCLUSION
This study examines the effects of audit partner busyness on the cost of equity capital. Following the notion of corporate governance research on “busy director”, we use the busyness hypothesisto argue that the time and effort of an individual are finite. Thus, serving too many audit clients, and hence the associated task commitments, may result in poor audit performance, which increases information risk and, therefore, the cost of capital. We find support for this view, but only for the firm‐year observations audited by non‐Big 4 audit firms. We also argue that financial reporting quality mediates the effects of audit partner busyness on the cost of equity capital and find results that are supportive of this prediction as well. However, our documented association of an adverse effect of audit partner busyness on earnings quality contradicts Goodwin and Wu (2016), who found no significant association between partner busyness and earnings quality. Although our results are consistent with recent evidence from the emerging markets, we caution readers not to extrapolate our inference to all listed firms on the Australian Securities Exchange, based on our restricted sample only. Future research needs to further investigate the generalizability of Goodwin and Wu (2016) by investigating the mediating effect of financial reporting quality on, for example, stock price crash risk, which would be amenable to a larger sample size. Future research should also examine factors that determine an auditor's decision to select potential clients in Australia. Existing research on this issue is mainly survey based and uses data from the USA. For example, Johnstone and Bedard (2003) suggested that auditors assess financial risk, audit risk, and auditor business risk, and consider whether engagement fees are sufficient to cover current and future expected engagement costs when selecting potential clients.