Professor Mitra published in elite accounting journal

Associate Professor of Accounting Santanu Mitra had an article accepted for publication in Accounting Horizons. 

The article, "Organized Labor and Audit Fees," was co-authored with Lin Cheng at the University of Arizona and Hakjoon Song of California State University. 

Accounting Horizons is one of the most widely-read journals published by the American Accounting Association. The article is scheduled for publication in the December 2017 issue.


This study investigates the empirical relationship between organized labor and audit fees. We find that audit fees are negatively related to firm-level unionization rate – the higher the unionization rate, the lower are the audit fees. We further observe that the unionized firms are less likely to hire Big 4 or industry-specialist auditors. Additional analyses show that the negative relationship between firm-level unionization rate and audit fees is significantly attenuated for unionized firms with poor financial performance. Our results are consistent with unionized firms preferring less audit scrutiny, which helps them maintain information asymmetry with the labor unions by having more control over the contents of reported financial information. The study facilitates our understanding of firms’ demand for audit services and the consequential effect on audit fees when faced with strong organized labor, and adds to the extant literature investigating the impact of organized labor on various aspects of firms’ financial reporting decisions.

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