The relation between board characteristics and audit/non-audit fees in Taiwan.

• Main Authors: Liu, Yen-Hsiu, 劉晏秀
• Other Authors: Chou, Ling-Tai Lynette
• Format: Others
• Language: zh-TW
• Published: 2004
• Online Access: http://ndltd.ncl.edu.tw/handle/35350739288988594545

碩士 === 國立政治大學 === 會計研究所 === 92 === To reduce the agency problem between management and capital suppliers, the business should design an effective corporate structure to reduce agency cost, including hiring outside board members and/or the establishment of an audit committee. The board members with higher independence and expertise will ask the auditors to put in more audit time to reduce information asymmetry. And they will expect to lessen the auditor’s economic dependency on the management by restricting non-audit services the company will purchase from the independent auditor firm. Most researches recently focus on the relation between characteristic of the board and business operation results. This research attempted to examine the relation between board characteristics and audit/non-audit fees paid to the independent auditors. This study found there’s no significant relation between board independence and audit fees or non-audit fees, but a negative relation existed between the board expertise and non-audit fees. Opposite to the conclusion of Carcello et al. (2000), this result indicated that the effect of board expertise on fees is greater than that of board independence. It could be due to the initial development of corporate governance in Taiwan. Most companies hire outside board members and set up an audit committee just to meet the regulation stipulated by law. On the other hand, the greater expertise a board processes, the less non-audit fee it will pay to the auditor in order to reduce the economic dependency of the auditor on the management.