文章基本信息

标题：Impact of Parent Companies and Multiple Large Shareholders on Audit Fees in Stakeholder-Oriented Corporate Governance
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作者：Akihiro Yamada ; Kento Fujita
期刊名称：Sustainability
印刷版ISSN：2071-1050
出版年度：2022
卷号：14
期号：9
页码：5534
DOI：10.3390/su14095534
语种：English
出版社：MDPI, Open Access Journal
摘要：This study aimed to investigate the impact of parent companies and other multiple large shareholders (MLSs) on the audit fees in Japanese firms, where stakeholder-oriented corporate governance is adopted. In such a firm, monitoring by many stakeholders can mitigate conflicts among shareholders. However, because the key stakeholders of these firms tend to resolve information asymmetry problems through insider communication, the level of audit effort is affected not only by the audit risk from principal–principal conflicts, but also by the demands of key stakeholders. Japanese parent companies tend to spin off their departments with high growth potential and provide incentives to lower subsidiaries’ cost of capital through information disclosure. Therefore, parent companies require greater audit efforts, and consequently, audit fees are expected to be higher. However, when MLSs are shareholders of the listed subsidiary, they can obtain relevant information via private communication. Thus, the need for quality accounting information will be smaller, the level of audit effort required will be smaller, and as a result, audit fees will be smaller. The results are consistent with these expectations. This paper contributes to the sustainable growth and economic development of firms and markets and has implications for the development of effective corporate governance mechanisms.