Client-firm workplace culture and audit fees

52 Pages Posted: 23 Aug 2021 Last revised: 6 Nov 2021

See all articles by Balasingham Balachandran

Balasingham Balachandran

La Trobe Business School, La Trobe University; Financial Research Network (FIRN)

Christo Karuna

Monash University

Sagarika Mishra

Deakin University

Premkanth Puwanenthiren

Westminster University

Date Written: August 12, 2021


We document that client-firm workplace culture quality along three dimensions – innovation, integrity, and collaboration - is negatively related to audit fees. We find that this negative relation is stronger when the auditor is located further away from its client firm, and when client firms are associated with non-specialist auditors, weaker monitoring, less analyst following, and higher probability of informed trading. We also find that higher client-firm workplace culture quality is associated with fewer financial restatements and lawsuits, less audit effort, and lower likelihood of material weaknesses and auditor opinion on internal controls. Collectively, our findings suggest that information environment quality acts as a possible mechanism via which client-firm workplace culture and audit fees are related. This study contributes to the literature by showing that the workplace culture in client firms influences auditing-related firm outcomes.

Keywords: culture, innovation, integrity, collaboration, audit fee, information asymmetry

JEL Classification: M14, M41, M42

Suggested Citation

Balachandran, Balasingham and Karuna, Christo and Mishra, Sagarika and Puwanenthiren, Premkanth, Client-firm workplace culture and audit fees (August 12, 2021). Available at SSRN: or

Balasingham Balachandran

La Trobe Business School, La Trobe University ( email )

La Trobe Business School
La Trobe University
Bundoora, Victoria 3086

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane


Christo Karuna (Contact Author)

Monash University ( email )

20 Chancellor's Walk
Clayton, Victoria 3800

Sagarika Mishra

Deakin University ( email )

221 Burwood Highway
Burwood, Victoria 3215

Premkanth Puwanenthiren

Westminster University ( email )

London, 3086
United Kingdom

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