Proceedings of the 2023 3rd International Conference on Financial Management and Economic Transition (FMET 2023)

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A Study of Related Party Transactions, Operational Risks and Audit Fees from the Perspective of the Nature of Ownership

Authors
Xia Zhu1, ZiHui Zhao1, *
1Business School, Guilin University of Electronic Technology, Guilin, China
*Corresponding author. Email: 466217197@qq.com
Corresponding Author
ZiHui Zhao
Available Online 15 October 2023.
DOI
10.2991/978-94-6463-272-9_4How to use a DOI?
Keywords
Related party transactions; audit fees; operational risk; nature of ownership
Abstract

The related party transaction model may exacerbate the operational risk of listed companies in terms of bargaining power, conversion of related investment costs, etc., which in turn may affect audit fees. Studies have focused on the impact of related party transactions on audit behaviour, with little literature focusing on the mechanisms at play. This paper empirically analyzes the impact of related party transactions on audit fees based on the operational risk theory perspective by selecting relevant data of manufacturing companies listed in Shanghai and Shenzhen A-shares from 2012-2021. The results show that related party transactions significantly exacerbate the concentration of business risk in firms, which in turn raises audit fees, i.e. business risk plays a mediating role in the impact of related party transactions on audit fees. Further study, after distinguishing the nature of ownership, the empirical results show that the positive relationship between related party transactions and audit fees is more significant in non-state owned enterprises, providing empirical evidence to support reasonable audit pricing by auditors.

Copyright
© 2024 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2023 3rd International Conference on Financial Management and Economic Transition (FMET 2023)
Series
Advances in Economics, Business and Management Research
Publication Date
15 October 2023
ISBN
10.2991/978-94-6463-272-9_4
ISSN
2352-5428
DOI
10.2991/978-94-6463-272-9_4How to use a DOI?
Copyright
© 2024 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Xia Zhu
AU  - ZiHui Zhao
PY  - 2023
DA  - 2023/10/15
TI  - A Study of Related Party Transactions, Operational Risks and Audit Fees from the Perspective of the Nature of Ownership
BT  - Proceedings of the 2023 3rd International Conference on Financial Management and Economic Transition (FMET 2023)
PB  - Atlantis Press
SP  - 21
EP  - 31
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-272-9_4
DO  - 10.2991/978-94-6463-272-9_4
ID  - Zhu2023
ER  -