Study of German companies concludes that the arrival of a new chair negatively influences audit quality and audit pricing.
With audit and auditors under intense scrutiny in numerous places it was only a matter of time before audit committee chairs saw their share of attention. And so they have.
When Svenja Hillebrandt and Nicole Ratzinger-Sakel looked at German company records between 2013 and 2017 they found by and large that audit quality fell and audit fees rose after the audit committee chairs changed.
“Our findings indicate that—beyond the AC (audit committee) chair’s characteristics—an AC chair change can also influence audit quality and audit pricing. Our findings show that changes of the AC chair are negatively associated with audit quality
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