| Summary: | 碩士 === 輔仁大學 === 會計學系碩士班 === 96 === The study investigates the trade-off between engagement risk and audit fees, that affects client acceptance decisions of CPA firms. This study analyzes the relationship between engagement risk (client business risk, audit risk, and auditors’ business risk), audit fees and CPA firms’ client acceptance decisions with structural equations model.
The results indicate client business risk and audit risk are positive to auditors’ business risk. Both client business risk and audit risk will increase in auditors’ business risk. The relationships of risks will affect the pricing of the audit and non-audit frees. Therefore, CPA firm will raise fees as risk premium when they accept audit or non audit engagements with high auditors’ business risk. Thus, auditor risk has positive association with economic dependence.
About the determination of client acceptance in Big4 CPA firms, we can find that economic profits has high priority in client accept decisions when a CPA faces the choice between profits and risk at the same time. In order to remain audit and non audit fees, CPA firms is willing to take risks. Therefore, economic profits is the main determination of client acceptance decision.
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