Auditors' Fee Premiums and Low‐Quality Internal Controls*
研究了低质量内部控制与审计费用溢价的关系，发现审计师因内控缺陷增加工时并收取额外费用，这种溢价在严重缺陷和治理机制差的公司中更明显。
ABSTRACT We examine the relation between low‐quality internal controls and audit fee premiums. Using a novel data set of audit hours and audit fees we find, consistent with the audit risk model, that auditors increase their effort (hours) owing to low internal control quality. We find that auditors also charge a significant fee premium to clients with internal control weaknesses. This premium is observed for severe internal control weaknesses and companies with low‐quality alternative governance mechanisms. The results are robust to multiple methods to address endogeneity, including company fixed effects, difference‐in‐differences design, and a propensity score‐matched sample. Taken as a whole, low internal control quality leads to fee premiums, which are a deadweight loss to client companies.