Analyzing the audit fees of cross-border IPO firms: evidence from Taiwan
研究了台湾跨境IPO公司与本土公司审计费用的差异，发现外来者劣势和跨境IPO特有特征导致审计费用更高，管理能力有调节作用，但行业专家审计师的溢价效应在跨境IPO公司中不存在。
Purpose This paper aims to explore the audit fee differences between cross-border initial public offering (IPO) firms and domestic firms in Taiwan, focusing on the moderating role of managerial ability and the impact of industry-specialist auditors. Design/methodology/approach The authors use ordinary least squares regression models to analyze the data of listed firms in Taiwan from 2010 to 2020. Findings The liability of foreignness (LOF) and cross-border IPO-specific characteristics (i.e. weak governance structures, foreign exchange risks and perceived investor unfamiliarity) jointly contribute to higher audit fees when cross-border IPO firms are benchmarked against domestic firms. Managerial ability has a moderating effect on the differences in audit fees between cross-border IPO firms and domestic firms, but the positive effect of industry-specialist auditors on audit fees (i.e. fee premiums) does not exist for cross-border IPO firms. Research limitations/implications Due to data unavailability, the number of cross-border IPO firms was limited during the sampling period. Practical implications The authors report that cross-border IPO firms in Taiwan face higher audit fees than domestic firms in Taiwan, thus providing insights for both types of firms and their stakeholders (e.g. audit firms and capital providers). Social implications The authors facilitate a broader understanding of the emerging global trend of cross-border IPO firms’ management. Originality/value The authors bridge a critical gap in international business research by examining how LOF and the unique characteristics of cross-border IPO firms influence audit fees. In doing so, the authors offer deeper insights into firms’ strategic considerations when making IPO decisions internationally.