Does fee disclosure type matter? Evidence from price adjustment in the audit market of Taiwan

Jengfang Chen, Rong-Ruey Duh, Kuei-Fu Lee

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


While mandatory audit fee disclosure makes fee information transparent, there have been concerns about the impact of price adjustment on audit quality. Taking advantage of a regulatory change in Taiwan that required public companies to disclose audit fee but allowed two alternative disclosure forms (amount disclosure or range disclosure), this study investigates the impact of the fee disclosure form on price adjustment and the influence of such adjustment on audit quality. Using a dataset including audit fees under the two disclosure forms, we find that, for overcharged companies, the downward adjustment is larger for amount disclosure companies than range disclosure companies and such downward adjustment increase discretionary accruals in amount disclosure companies but not for range disclosure companies. Our study helps understand the impact of different fee disclosure forms on price adjustment and audit quality, which should be of interest to regulators and financial statement users in Taiwan and beyond.

Original languageEnglish
Pages (from-to)41-61
Number of pages21
JournalJournal of International Accounting Research
Issue number3
Early online date25 Sept 2019
Publication statusPublished - 2019


  • audit fee disclosure
  • price adjustment
  • audit quality
  • disclosure form


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