Foreign Currency Debt Financing and Audit Fees

Abstract

Abstract: In recent years, the scale of foreign currency debt financing of Chinese enterprises has been increasing, and some enterprises have generated foreign currency debt financing risks. Then, will this risk affect the enterprises' audit fees? Based on the information related to foreign currency debt financing disclosed by China's A-share listed companies from 2014 to 2019, this paper empirically tests the impact of corporate foreign currency debt financing on audit fees. The findings show that the larger the scale of foreign currency debt financing, the higher the audit fees will be. The corporate operating risks and auditor input are the intermediate channels through which foreign currency debt financing affects the audit fees. The results of further research show that the greater the volatility of the RMB exchange rate, the more significant the positive correlation between foreign currency debt financing and audit fees, but companies' overseas income will weaken the positive correlation between the two.

Key words: foreign currency debt financing, audit fee, operating risks, audit investment

CLC Number:

F239.42

YUAN Pan-pan, GUO Fei. Foreign Currency Debt Financing and Audit Fees[J]. Contemporary Finance & Economics, 2021, 0(10): 138-148.

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