Place attachment, audit pricing and audit quality

Shuai Yuan, Wuxue Zhang, Kaiwen Zhu

Research output: Journal PublicationArticlepeer-review

1 Citation (Scopus)

Abstract

Place attachment is an affective bond whereby people interact with and describe themselves as belonging to specific places. This study investigates the presence of place attachment in the auditing process. Using a large sample of listed clients in China, the findings reveal that auditors are likely to charge higher fees if their colleges are located in the same cities or provinces as their clients, supporting the familiarity bias hypothesis. This effect is more concentrated among smaller auditors, non-state-owned clients, and clients who switch auditors between years. In addition, a negative relationship is found between audit quality and geographical connections between auditors and clients. Overall, the results indicate the existence of place attachment in the auditing process.

Original languageEnglish
Article number100365
JournalJournal of Contemporary Accounting and Economics
Volume19
Issue number2
DOIs
Publication statusPublished - Aug 2023

Keywords

  • Audit pricing
  • Audit quality
  • Familiarity bias
  • Place attachment

ASJC Scopus subject areas

  • Accounting

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