​CEO Political Ideology and Audit Pricing

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讲座嘉宾:Prof. Hong Xie (谢宏教授)

嘉宾简介:谢宏教授1983年毕业于上海交通大学,1986年于不列颠哥伦比亚大学(University of British Columbia)获得硕士学位,1998年获得爱荷华大学(The University of Iowa)博士学位。曾先后执教于亚利桑那大学(The University of Arizona)、伊利诺伊大学厄巴纳―香槟分校(University of Illinois at Urbana-Champaign, UIUC)、雪城大学(Syracuse University)等多所国际名校。于2009年至今,任教于肯塔基大学(University of Kentucky)。
谢教授在会计学界研究成绩斐然,在The Accounting Review, Review of Accounting Studies, Review of Accounting and Finance, Journal of Banking and Finance, Review of Accounting and Finance等高水平国际期刊上发表了诸多有影响力的论文。

We examine the association between CEOs’ political ideologies, proxied by CEOs’ federal-level personal political contributions to the Republican Party relative to the Democratic Party, and audit fees of the firms that the CEOs manage. We hypothesize and find that firms run by CEOs whose political ideologies are aligned with the Republican Party pay lower audit fees than firms run by CEOs whose political ideologies are aligned with the Democratic Party. This finding is robust to various sensitivity checks and to controls for potential endogeneity and self-selection concerns. In addition, we identify financial reporting quality and client business risk as two possible channels through which CEO political ideology affects audit fees, and show that CEO political ideology has a residual effect on audit fees even after controlling for these two channel variables. Finally, we find that the association between CEO political ideology and audit fees is more pronounced when corporate governance is weaker.