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Study Says CFOs Still Control Audit Fees at Many Companies

Tammy Whitehouse | November 4, 2014

New academic research suggests it’s still primarily the CFO, not the audit committee, who negotiates the audit fee, despite Sarbanes-Oxley provisions meant to put audit committees in the driver’s seat.

Mauldin-elaine-1114“When push comes to shove, the power of audit committees can be an iffy proposition,” said Elaine Mauldin, an associate professor of accountancy at the University of Missouri, in a statement. She carried out the study, titled Who’s Really in Charge? Audit Committee versus CFO Power and Audit Fees and published in The Accounting Review, with Matthew Beck, an assistant professor at Michigan State University. “Our findings suggest that at many companies it is still primarily the CFO who calls the shots when it comes to hiring an auditor and setting the audit fee,”...

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