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Research Seminar Series

Research Seminar Series

"The Cost of Sin:
The Effect of Social Norms on Audit Pricing"

Dr Stergios Leventis
Lecturer in Accounting
School of Economics & Business Administration,
International Hellenic University

Thursday, July 12, 2012, 16:00-17:00
Lecture Room A1

The School of Economics and Business Administration of the International Hellenic University (IHU) would like to invite you to the next presentation in the Research Seminar Series. Dr Stergios Leventis, Lecturer in Accounting at the School of Economics & Business Administration, International Hellenic University, will present his working paper entitled "The Cost of Sin: The Effect of Social Norms on Audit Pricing".

The purpose of the Research Seminar Series is to bring together the academic and business community by presenting contemporary research topics in Finance, Business, Marketing, Accounting and Economics, among others. Through these seminars, as an international centre of knowledge, innovation and research, at the crossroads of Southern Europe, the IHU attempts to further strengthen its strategic role in academic excellence. Drawing on the experience of outstanding Greek and international academics, working papers are presented on a regular basis, with the aim of establishing a meeting point for active researchers.


Speaker information:
Dr Stergios Leventis is a lecturer in Accounting at the School of Economics and Business Administration at the International Hellenic University. Before joining IHU, Stergios was a lecturer at Lancaster University and has worked as an accounting consultant. He gained an MSc from Heriot-Watt University, Edinburgh, and a PhD from the University of Strathclyde, Glasgow.

His research focus is on accounting disclosure and quality, accounting choice in emerging markets, auditing and environmental accounting. He has published work in a number of scientific journals including the European Accounting Review, Accounting and Business Research, International Journal of Auditing, Accounting Forum, Advances in International Accounting, etc. Many of his articles in professional periodicals have focused on the International Financial Reporting Standards.


Working paper's short abstract:
In this paper we provide evidence for the effects of social norms on audit pricing by studying companies belonging to the alcohol, firearms, gambling, military, nuclear power, and tobacco industries, all of which are often described as "sin" companies. We hypothesize that there is a social norm employed by auditors when dealing with companies engaged in business activities that promote vice, and that this social norm is reflected in the pricing decisions for audit and consulting services. Our hypothesis is supported by our finding that audit firms charge significantly higher audit and consulting fees to companies that do not comply with prevailing social norms. Additionally, we find that audit pricing levels within the “sin” group depend both on political norms and on the levels of vice that the "sinful" companies are involved in.

If you wish to download the working paper’s presentation please follow the link provided here:

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