International Journal of New Developments in Engineering and Society, 2020, 4(1); doi: 10.25236/IJNDES.040101.
School of Management, Shanghai University, Shanghai 201800, China
Based on the behavioral finance theory and principal-agent theory, this paper adopts a combination of normative research and empirical research,this paper empirically tests the impact of managers' overconfidence on audit fees, and analyzes the mechanism of the relationship between non-executive directors and audit fees.This paper selects the data of A-share non-financial listed companies in Shanghai and Shenzhen from 2013 to 2018 as the research object,the empirical results show that the management with overconfidence reduces the quality of accounting information and increases the risk of the company,In order to avoid the possible audit risk, auditors increase the audit workload and increase the risk premium, thus increasing the audit cost.Further research shows that the non-executive directors can supervise the management to a certain extent. With the increase of the proportion of non-executive directors, the positive correlation between managers' overconfidence and audit costs gradually weakens.
audit fees, overconfidence of managers, non-executive directors
Ting Tan. Management Overconfidence, Non-Executive Directors and Audit Fees. International Journal of New Developments in Engineering and Society (2020) Vol.4, Issue 1: 1-10. https://doi.org/10.25236/IJNDES.040101.
 Bravo F, & Regueral N. (2017) Do independent director’s characteristics influence financial reporting quality? Revista Espanola De Financiaction Y Contabilidad, vol.23, no.3, p. 1-19.
 Ishikawa, M., & Takahashi, H. (2010). Overconfident managers and external financing choice. Review of Behavioural Finance, vol.18, no.2, p. 37-58.
 Graham J R. (2013). Managerial Attitudes and Corporate Actions. Journal of Financial Economics, vol.46, no.3, p. 103-121.
 Minggui, Yu.(2006). Overconfidence of managers and radical debt behavior of enterprises. Management world, vol.7, no.6, p.104-112 + 125 + 172.
 Anwer S. Ahmed, &Scott Duellman. (2013). Managerial Overconfidence and Accounting Conservatism. Journal of Accounting Research, vol.51, no.1, p. 1–30.
 Schrand C M, & Zechman S L C. (2012). Executive overconfidence and the slippery slope to financial misreporting. Journal of Accounting & Economics, vol.52, no.1, p.:311-329.
 Su Chen. (2014). Overconfidence of managers, board structure and investment and financing risks of enterprises based on empirical evidence of Listed Companies. China soft science, vol.26, no.6, p. 109-116 .
 Jigao, Zhu. (2015). Who is the more active supervisor: non controlling shareholder director or independent director?. Economic research, vol.50, no.9, p. 170-184
 Zhengfei, Lu. (2015). Shareholder manager proxy conflict and the governance role of non-executive directors: Empirical Evidence from China's A-share market . Management world, vol.5, no.2, p. 129-138.
 Yingzi, Li. (2016). The choice of non-executive directors' influence on management's earnings management--An Empirical Analysis from the perspective of industry competition. Modern finance and Economics (Journal of Tianjin University of Finance and Economics), vol.37, no.8, p. 66-77 + 100.