Agency Problems and Audit Fees: Further Tests of the Free Cash Flow Hypothesis
Accounting & Finance, 2010

This study, by Professor Paul Griffin and co-authors David H. Lont from the University of Otago and Yuan Sun from UC Berkeley, finds that the agency problems of companies with high free cash flow (FCF) and low growth opportunities induce auditors of companies in the United States to raise audit fees to compensate for the additional effort. They also find that high FCF companies with high growth prospects have higher audit fees.

This paper won the 2010 Peter Brownell Best Manuscript Award from Accounting & Finance.