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CONTEMPORARY FINANCE ECONOMICS

20114
317

NO4 2011
Serial NO317

CEO

1 1 2 2

1. 4000442.

32003

2007- 2009 CEO

CEO
CEO

CEO
F239.43

10050892 (2011) 04011010

Simunic 1980[1]

10
LowTan Koh1990Craswell Francis1999Johnstone Bedard2001[2- 4]
2001


200320042008[5- 7] Simunic1980[1]

Jussi
Petri2004[8]Jussi Petri 2004
[8]

CEO

CEO

2010- 12- 30
2010- 2011 SYLFF
CDJXS11021113

110 Contemporary Finance Economics

CEO

2007 [9]
CEO CEO
CEO CEO
200620072009[9- 11]
[12]
2007
2007[12]

2001- 2003
CEO CEO
2007- 2009 A
TsuiJaggi Gul 2001[13]
CEO CEO

CEO
CEO Fama
Jensen1983Kim Yi20062007Chen Liu2010[14- 17]
CEO

CEO CEO Jensen1993


[18- 19]
2005

CEO CEO
2006[20]
CEO 2006

[10] CEO
2007
[9]

CEO 2009
[11]

CEO
CEO
2007[9] CEO CEO

CEO

Contemporary Finance Economics

111

2011 4 317

H1CEO CEO

CEO

Myers1977[21] Gaver 1993[22]


Skinner1993[23]

TsuiJaggi Gul2001[13]

CEO CEO

H2
H3CEO

1 CEO+2 Growth+3 CEOGrowth+4 ln(Size)+5 AR

ln(Audfee)= +6 Loss+7 Subs+8 Tenu+9 Big+10 D1 +11 D2 +12 D3


+13 D4 ++

1
Audfee
ln(Audfee)
2
CEO CEO CEO
CEO CEO=1 CEO CEO=1
CEO=0 Growth
Growth= / = + /
CEO CEO
CEOGrowth
3

112 Contemporary Finance Economics

CEO

Simunic 1980
[1]

2003

[5]
2008

[7]

Size AR Loss

Subs Tenu Big


1
1

ln(Audfee)

CEO

CEO

Growth

CEO*Growth

CEO CEO=1 CEO=0


+ /
CEO*Growth=CEOGrowth

ln(Size)

AR

Loss

=1 =0

Subs

Tenu

=1 =0

Big

=1 =0

D1

D1=1 D1=0

D2

D2=1 D2=0

D3

D3=1 D3=0

D4

D4=1 D4=0


2007

2007- 2009
1 2
3

B H 4
5 ST *ST
6 7
2596 2007 654 2008 896 2009 1046

Contemporary Finance Economics

113

2011 4 317

CEO

www.resset.cn EViews7.0

CEO
CEO=0

CEO=1

Audfee

Audfee

Audfee

2007

654

596128

474

72.48%

604305

180

27.52%

574597

2008

896

614226

623

69.53%

623621

273

30.47%

592788

2009

1046

653741

731

69.89%

659012

315

30.11%

641508

2007- 2009

2596

625588

1828

70.42%

632765

768

29.58%

608507

2 CEO CEO
CEO
CEO 2007[12] CEO

2007- 2009
CEO=1 CEO=0
CEO CEO=0

ln(Audfee)

13.149

13.082

0.546

16.588

11.513

CEO

0.296

0.000

0.457

1.000

0.000

Growth

2.948

2.394

2.034

19.533

0.422

CEOGrowth

0.889

0.000

1.730

19.485

0.000

ln(Size)

21.582

21.463

1.065

26.762

18.828

AR

0.086

0.062

0.084

0.607

0.000

Loss

0.127

0.000

0.333

1.000

0.000

Subs

2.708

2.646

1.386

10.247

0.000

Tenu

0.908

1.000

0.289

1.000

0.000

Big

0.440

0.000

0.497

1.000

0.000

D1

0.363

0.000

0.481

1.000

0.000

D2

0.215

0.000

0.411

1.000

0.000

D3

0.130

0.000

0.336

1.000

0.000

D4

0.059

0.000

0.236

1.000

0.000

114 Contemporary Finance Economics

CEO

3 ln(Audfee) 13.149 CEO 0.296


Growth 2.948 3
19.533 0.422CEOGrowth 0.889 CEO=1
CEOGrowth
ln(Size) 21.582 21.463AR 0.086
8.6%Loss 0.127
Subs 2.708 2.646
7 0 126 Tenu
0.908
Big 0.440
D1
0.363 D4
0.059
GrowthCEOGrowthSize Subs 1
1

4
ln(Audfee)

CEO

Growth

S pe a rma n
CG

ln(Size)

AR

Loss

Subs

CEO

- 0.009

Growth

- 0.009

0.046**

CG

- 0.002

0.979***

0.150***

ln(Size)

0.063***

- 0.054***

- 0.070***

- 0.054*

AR

- 0.083***

0.006

- 0.029

- 0.001

- 0.175***

Loss

- 0.071***

- 0.026

0.003

- 0.027

- 0.122***

- 0.049**

Subs

0.238***

- 0.003

- 0.015

- 0.007

0.192***

- 0.013

0.011

Tenu

0.043**

0.030

0.025

0.033*

- 0.030

0.023

- 0.011

- 0.023

Big

0.240***

- 0.007

- 0.032*

- 0.011

0.117***

0.038*

- 0.023

- 0.047**

Tenu

0.005

***** * 1%5% 10% T

4 Spearman
0.20


5 F 1%
F
R2 0.497 0.500
CEO CEO Growth
CEOGrowthCEO ln(Audfee) CEO
CEO

Contemporary Finance Economics

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2011 4 317

1
Growth ln(Audfee)
2
CEOGrowth CEO
CEO
CEOGrowth CEO ln(Audfee)
CEO
CEO CEO
3

CEO

5
1
CEO

0.034**
0.017
0.010***
0.004

Growth

0.033**
0.017

- 0.047*
0.027

0.010**
0.004

CEOGrowth

6
- 0.037
0.030

0.006
0.004

0.003
0.004

0.027***
0.007

0.015***
0.005

0.024***
0.008

ln(Size)

0.320***

0.320***

0.321***

0.321***

0.321***

0.321***

AR

0.112

0.118

0.119

0.123

0.122

0.124

Loss

0.022

0.020

0.021

0.022

0.022

0.022

Subs

0.044***

0.044***

0.044***

0.044***

0.044***

0.044***

Tenu

0.099***

0.101***

0.099***

0.098***

0.098***

0.098***

Big

0.181***

0.182***

0.182***

0.181***

0.181***

0.181***

D1

0.082***

0.086***

0.084***

0.086***

0.085***

0.086***

D2

0.033

0.039*

0.036

0.038*

0.037*

0.039*

D3

0.017

0.018

0.017

0.018

0.017

0.018

D4

- 0.096***

- 0.095***

- 0.096***

- 0.095***

- 0.095***

- 0.095***

5.903***

5.876***

5.851***

5.882***

5.852***

5.867***

Adj- R2

0.497

0.498

0.498

0.500

0.499

0.499

F- statistic

234.11***

234.56***

215.60***

216.82***

216.66***

200.15***

***** * 1%5% 10%

TsuiJaggi Gul 2001[13]

A
CEO A
A CEO

116 Contemporary Finance Economics

CEO

CEO
CEO

Bowerman O
Connell1990[24] CEO

1
2

ln(Audfee)=1CEO+2Growth+3(CEOGrowth)+
5 2

ln(Audfee)=- 0.037CEO+0.003Growth+0.024(CEOGrowth)+5.867

CEO 3
CEO CEO
CEO CEO CEO=0 3
4

ln(Audfee)=0.003Growth+5.867
CEO CEO=1 3
ln(Audfee)=- 0.037+0.003Growth+0.024Growth+5.867

ln(Audfee)=0.027Growth+5.830
4 5 1

1 Growth CEO 0.027 CEO


0.003

CEO-dominated

ln(Audfee)

CEO

1.5425.872 CEO

Non-CEO-dominated
5.867
5.830

(1.542, 5.872)
Growth

CEO

Growth 2.394 Growth


TsuiJaggi Gul
2001 3

ln(Size)SubsTenu Big Audfee


ARLoss Audfee


TsuiJaggi Gul
2001[13] TsuiJaggi
Gul 2001[13] AR Loss

Contemporary Finance Economics

117

2011 4 317

20 Big20 10

A 2007- 2009 2596


CEO 1
CEO CEO
2 3
CEO CEO

CEO
CEO

CEO

2003[5] 5

TsuiJaggi Gul 2001[13]CEO


CEO CEO

[1]Simunic. The Pricing of Audit ServicesTheory and Evidence[J]Journal of Accounting Research198018161- 190.
[2]LowL.PTanand HKohThe Determination of Audit FeesAn Analysis in the Singapore Context[J]Journal
of Business Finance and Accounting1990(1)285- 295
[3]A Craswelland FrancisPricing Initial Audit EngagementsA Test of Competing Theories[J]Accounting Review
1999(4)201- 216
[4]JohnstoneK. M.and J. BedardEngagement Planning, Bid Pricing and Client Response in the Market for Initial
Attest Engagements[J]The Accounting Review2001(4)199- 220.
[5]

[J]2003(1)44- 47

[6]

[7]

[J]2008(9)126- 129

[J]2004(2)13- 18

[8]Jussi Nikkinenand Petri SahlstronDoes Agency Theory Provide a General Framework for Audit Pricing[J]International Journal of Auditing2004(11)15- 30
[9][J]2007(5)65- 71
[10]

[J]2006(2)72- 79

118 Contemporary Finance Economics

CEO
[11][J]2009(12)71- 83
[12] [J]2007(5)72- 79
[13]Judy SLTsuiBikki Jaggiand Ferdinand AGulCEO DominationGrowth Opportunitiesand Their Impact
on Audit Fees[J]Journal of AccountingAuditing and Finance2001(1)189- 208
[14]Fama EF. and MCJensenSeparation of Ownership and Control [J]Journal of Law and Economics
198326301- 326
[15]Kim J. and C. YiOwnership Structure Business Group Affiliation Listing Status and Earnings Management
Evidence from Korea[J]Contemporary Accounting Research2006(2)427- 464
[16][J]2007(6)34- 37
[17]Ken Y Chenand Jo- Lan LiuEarnings ManagementCEO Domination and Growth Opportunities [J]International
Journal of Public Informaion Systems2010(1)43- 69
[18]Jensen MC.Presidential Address The Modem Industrial Revolution Exit and the Failure of Iniemal Control
Systems[J]Joumal of Finance199318831- 880
[19]

[J]2005(2)

81- 91.
[20]

[J]2006(6)87- 93

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[22]GaverJJ.and KMGaverAdditional Evidence on the Association Between the Investment Opportunity Set
and Corporate FinancingDividendand Compensation Policies[J]. Journal of Accounting Economics199316125- 160.
[23]SkinnerDJ.The Investment Opportunity Set and Accounting Procedure Choice[J]Elsevier Science Puhlishers
1993(4)407- 445.
ConnellLinear Statistical ModelAn Applied Approach2nd ed[M]BostonPWS- Kent
[24]Bowerman BL.RTO
Publishing1990

CEO Domination, Growth Factors and Audit Pricing


LIN Chuan, CAO Guo-hua, QIU Bang-han, BI Jia-Yu
(Chongqing University, Chongqing 400044; Yuan Zi University, Zhongli 32003, China)

AbstractBy making us of the data of Chinas listing companies from 2007 to 2009, this paper
analyzes the influence of CEO domination and the growth factors on audit pricing. The results indicate that because of the high agency costs in listed companies of China, both CEO domination and
growth factors have significant positive influence on audit pricing. However, since there are a lot of
Chinese listed companies at the initial growth stage, the influence of CEO domination on audit pricing does not depend on the growth factors.

Key wordsCEO domination; growth; audit pricing

Contemporary Finance Economics

119

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