Aug 2026· Revue Gestion et Organisation· Vol 19, pp. 68-98· 0 citations
Abstract
Purpose. This study investigates how tax litigation affects the length, tone, clarity, and complexity of audit opinions for companies listed on Brazil’s B3 exchange, and the implications for financial reporting transparency and trust.
Design/methodology/approach. A fixed-effects panel analysis is applied to 233 firms (3,241 firm-year observations) from 2009 to 2023. Tax litigation is measured as the ratio of tax-related provisions and contingencies to total assets. Audit opinion attributes (length, tone, readability, complexity) are quantified alongside various control variables (firm size, risk, etc.). Hypotheses are tested using regression and quantile regression.
Findings. Higher tax litigation is associated with shorter audit opinions that paradoxically exhibit greater clarity and more technical complexity. Auditors appear to provide more focused, readable reports with additional technical details for firms facing significant tax disputes. Other factors (e.g., firm size, risk, governance) also show significant effects on audit opinion metrics.
Originality. This study is the first to identify tax litigation as a significant determinant of audit report characteristics in Brazil. It extends the literature by demonstrating how auditors adjust their reporting strategy under high tax-risk conditions, balancing thorough disclosure with concise communication.
Practical implications. Managers should strengthen tax compliance and governance to reduce litigation-related reporting complexities. Regulators might simplify tax codes to mitigate disputes and associated audit burdens. Auditors should enhance documentation and clarity when auditing clients with high tax risk to uphold transparency and stakeholder trust.
ABSTRACT Objective: examine how corporate governance indicators - Novo Mercado (NM), Novo Mercado Index (IGNM), Corporate Governance Index (IGC), and Tag Along Index (ITAG) - relate to tax litigation among B3-listed firms. Methods: we analyze 3,290 firm-year observations from 254 B3 companies (2009-2023) using OLS, random effects, difference GMM, system GMM, and quantile regressions, with controls for size, business risk, liquidity, leverage, age, profitability, asset structure, and sector litigiousness. Results: governance effects are heterogeneous: NM and IGC are associated with lower tax litigation, consistent with stronger monitoring and compliance, whereas IGNM and ITAG correlate with higher litigation, possibly reflecting greater visibility, complexity, and scrutiny. Quantile estimates show these effects are strongest in the upper tail of the litigation distribution. Conclusions: robust governance can reduce tax disputes, but visibility- and rights-driven mechanisms may increase exposure in complex settings. Firms should pair transparency with proactive tax risk governance to balance compliance, scrutiny, and litigation costs.
Antonio Lopo Martinez, A. Moraes, Alfredo Sarlo Neto et al.· BAR: Brazilian Administratio...· 0 citations
This quantitative study aims to examine the influence of the risk management committee, firm size, and corporate leverage on audit fees in banking and insurance sector companies listed on the Indonesia Stock Exchange (IDX) during the 2022–2024 period. This study is motivated by the importance of understanding the determinants of audit fees in highly regulated industries, where corporate governance mechanisms, financial complexity, and risk characteristics may affect audit pricing decisions. The sample was selected using a purposive sampling technique, resulting in 40 banking and insurance companies that met the research criteria. Secondary data were collected from the companies’ annual reports and audited financial statements for the 2022–2024 period and analyzed using panel data regression. The findings indicate that firm size has a positive and significant effect on audit fees, suggesting that larger companies require greater audit effort due to their more complex operations, higher transaction volumes, and broader reporting responsibilities. In contrast, the risk management committee does not have a significant effect on audit fees, indicating that the existence of this governance mechanism alone does not substantially influence auditors’ pricing decisions. Meanwhile, corporate leverage has a negative and significant effect on audit fees, implying that differences in capital structure may influence auditors’ assessment of audit engagement and pricing. Overall, the results demonstrate that company-specific characteristics, particularly firm size and leverage, play an important role in determining audit fees in Indonesia’s banking and insurance sectors. These findings contribute to the literature on audit pricing and corporate governance while providing practical implications for company management, auditors, investors, and regulators in understanding the factors that influence audit fee determination and improving governance practices within the financial services industry.
Audit quality has become a critical issue in ensuring the credibility of financial statements,
particularly amid increasing business complexity and inconsistent empirical findings regarding
its determinants. This study aims to examine the effect of audit tenure, audit delay, PAF size,
audit fee, and firm size on audit quality in consumer goods companies listed on the Indonesia
Stock Exchange during the 2020–2024 period. The research employs a quantitative approach
using secondary data and applies purposive sampling, resulting in 49 companies with 186
observations. Logistic regression analysis is used because audit quality is proxied by audit
opinions (unqualified and non-unqualified opinions). The findings indicate that audit delay has a
significant negative effect on audit quality, while audit fee has a significant positive effect. In
contrast, audit tenure, PAF size, and firm size do not show significant effects.
S. Handoyo, Yulianisa Dwi Maharani· International journal of eco...· 0 citations
This study investigates the relationship between the number of key audit matters (NKAMs) and audit fees (AFEE), and the moderating roles of audit firm quality (proxied by the Big4 auditors) and client complexity (proxied by client size and revenue) in this relationship.
The study uses 1,163 listed non-financial firm-year observations in Germany from 2018 to 2023. I employ ordinary least squares regression to test the hypotheses and use entropy balancing and propensity score matching to address endogeneity concerns.
The regression results show a significant positive association between NKAMs and AFEE, which is stronger for Big4 clients and complex (large-size and high-revenue) clients. The results are robust across alternative models, variables and sample specifications.
This study contributes to the audit quality literature regarding KAM reporting, audit fees, audit firm quality and client complexity. These findings have implications for various financial statement users.
To the best of the author’s knowledge, this study is the first empirical investigation to examine the relationship between NKAMs and AFEE in Germany. Moreover, no prior study has examined the moderating role of Big4 auditors and client complexity in this relationship.
Anojan Vickneswaran· Revista de Gestão· 0 citations
This study investigates how firm size, ownership structure, and capital structure influence audit quality among manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the period 2021–2024. The research is motivated by the persistent variation in audit quality across firms in emerging markets, despite standardized regulatory frameworks. Using a quantitative approach, this study analyzes a balanced panel dataset of 224 firm-year observations drawn from annual financial statements and audit disclosures. Audit quality is measured using a binary variable indicating whether a company employs a Big 4 auditor. The empirical findings reveal that firm size and ownership structure have positive and significant effects on audit quality, indicating that larger firms and those with concentrated ownership are more likely to engage reputable auditors. In contrast, capital structure shows a positive but statistically insignificant relationship, suggesting that leverage alone does not necessarily enhance the demand for higher audit assurance. The results reinforce the importance of firm characteristics and ownership control in shaping audit quality decisions in the Indonesian context. This study contributes to the literature by integrating firm size, ownership, and capital factors within a unified analytical framework, providing insights into how governance mechanisms operate in emerging markets to influence external assurance practices.
Jamian Purba, Neng Asiah, Sindik Widati· Akuntansi· 0 citations
In a context characterized by a soft law legal transition, this paper aims to analyze how ownership structure and governance characteristics affect the extent of environmental disclosure (ED) among nonfinancial companies listed on the Casablanca stock exchange (CSE).
Content analysis, using a 23-item checklist, was used to assess the extent of ED in the annual reports of 45 companies from 2019 to 2023. The study uses generalized least squares to investigate the relationships between ownership structure (institutional and foreign), governance characteristics (board size, independence, diversity, CEO duality and auditor size) and the extent of ED.
Findings reveal that board size, percentage of female directors, auditor size and foreign ownership positively influence the extent of ED in nonfinancial companies listed on the CSE. Conversely, the percentage of foreign directors and CEO duality negatively influences ED. Several tests were performed to confirm the robustness of the results and to rule out endogeneity issues.
This research contributes new empirical evidence from an understudied emerging market and reevaluates the relevance of classical theories in a specific institutional context. To the best of the authors’ knowledge, this is one of the few studies to examine ED following Circular 03/2019, offering a recent perspective on its determinants.
Youssef Ghizlane, Meryem Chiadmi· International Journal of Law...· 0 citations