Cheng, Zijian; Liu, Zhangxin; Wang, Isabel Z.; Zhao, Xingju - 2023
We study the effect of reverse mergers (RMs) on audit fees in China. Using a manually assembled data set from 2010-2019, we find that RMs pay higher audit fees than their IPO counterparts due to increased risks of corporate litigation and financial misstatement. RMs with performance commitments...