Rosati, Pierangelo ORCID: 0000-0002-6070-0426, Gogolin, Fabian and Lynn, Theo ORCID: 0000-0001-9284-7580 (2019) Audit firm assessments of cyber-security risk: evidence from audit fees and SEC comment letters. International Journal of Accounting, 54 (3). ISSN 0020-7063
Abstract
This study investigates the impact of cyber-security incidents on audit fees. Using a sample of 5,687 firms, we find that (i) breached firms are charged 12 percent higher audit fees, and (ii) firms operating in the same industry of a breached firm are charged 5 percent higher fees. Finally, using a difference-indifference regression on a propensity score matched sample, we provide evidence suggesting that auditors do not revise their audit risk assessment following a breach. Overall, these results suggest that the increase in audit fees in the year of a breach is only temporary, and that auditors include cyber-security risk in their audit risk assessment even before an incident occurs. Higher cyber-security risk is ultimately reflected in higher audit fees paid by auditees.
Metadata
Item Type: | Article (Published) |
---|---|
Refereed: | Yes |
Additional Information: | Article number 1950013 |
Uncontrolled Keywords: | Audit risk; audit fees; cyber security; SEC comment letters |
Subjects: | Business > Accounting |
DCU Faculties and Centres: | DCU Faculties and Schools > DCU Business School Research Institutes and Centres > Irish Centre for Cloud Computing and Commerce (IC4) |
Publisher: | World Scientific Publishing |
Official URL: | http://dx.doi.org/10.1142/S1094406019500136 |
Copyright Information: | © 2019 World Scientific Publishing |
Use License: | This item is licensed under a Creative Commons Attribution-NonCommercial-Share Alike 3.0 License. View License |
ID Code: | 24776 |
Deposited On: | 14 Jul 2020 10:34 by Pierangelo Rosati . Last Modified 19 Sep 2020 03:30 |
Documents
Full text available as:
Preview |
PDF
- Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader
994kB |
Downloads
Downloads
Downloads per month over past year
Archive Staff Only: edit this record