The Impact of Religiosity on Audit Pricing

摘要: Prior literature has demonstrated that religiosity is associated with a reduced acceptance of unethical business practices and financial reporting irregularities. On this premise, we examine whether religiosity, conceptualized as the degree adherence to religious norms in geographical area where firm’s headquarters located, an impact on audit firms’ pricing decisions US. We measure intensity by number adherents relative total population county demonstrate increased operates institutionalized monitoring mechanism decreases risk costs, which is, turn, reflected pricing. Additional tests suggest auditors’ not differentiated levels auditor expertise but fees are determined auditor’s location market sector adherence. conclude reduces need for shareholders bear costs agents, finding could be importance participants regulators.