Accrual reversals and audit fees: the role of abnormal audit fees*

Fang Chi Lin, Yu Cheng Lin, Chieh Shuo Chen

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


This study examines whether abnormal audit fees impair auditor independence or reflect auditors’ efforts by using accruals reversal. All accruals must ultimately reverse, but those reversals have different effects on earnings persistence. Management may communicate the private information by different kinds of accruals. Therefore, auditors that have inside information should be able to identify managers who use their reporting discretion accruals to signal private information to investors. Our results suggest that normal audit fees reflect audit effort to identify different kinds of accruals reversal, but positive abnormal audit fees impair audit quality.

Original languageEnglish
Pages (from-to)276-294
Number of pages19
JournalAsia-Pacific Journal of Accounting and Economics
Issue number1-2
Publication statusPublished - 2018 Jan 10

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

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