The Effect of Managerial Overconfidence on Abnormal Audit Fees with Respect to Stakeholder Equity Mechanisms

Iranian Journal of Accounting, Auditing and Finance

مقاله 4، دوره 7، شماره 3 - شماره پیاپی 24، آبان 2023، صفحه 53-65   

نوع مقاله: Original Article

شناسه دیجیتال (DOI): 10.22067/ijaaf.2023.43401.1237

نویسندگان

Esmaeil Akhlaghi Yazdinejad^{* 1}؛ Hossein Nourani²

¹Department of Accounting, Faculty of Management, Economics and Accounting, University of Hormozgan, Bandar Abbas, Iran

²Department of Accounting, Faculty of management economics and Accounting, University of Hormozgan, BandarAbbas, Iran

چکیده

The pricing of audit services has been a topic of interest to many audit researchers. In case auditors recognize managerial overconfidence, they are expected to incorporate this risk factor into their audit planning and compensate for additional audit efforts to reduce diagnostic risk. This research investigates the effect of the stakeholder equity mechanisms on the relationship between managerial overconfidence and abnormal audit fees. The research sample comprises 144 listed firms on the Tehran Stock Exchange (TSE) from 2012 to 2021. Multiple regression techniques are used to test hypotheses. Furthermore, the Burks et al. (2019) method of testing interaction role is applied. The capital expenditure ratio index has been used for measuring managerial overconfidence. The results indicated a positive and significant relationship between managerial overconfidence and abnormal fees for auditing services. Moreover, the stakeholder equity mechanisms undermine the relationship between managerial overconfidence and abnormal fee for auditing services.

کلیدواژه‌ها

Managerial Overconfidence؛ Abnormal Fees؛ Stakeholder Mechanisms