Redefining the Concept of Just Price

Jong-Sung Kim; Seon-Jong Yoo

doi:10.30902/jrea.2021.7.3.251

U.S.-Listed Foreign Companies' Choice of a U.S.-Based versus Home Country-Based Big N Principal Auditor and the Effect on Audit Fees and Earnings Quality

Accounting Horizons ◽

10.2308/acch-51105 ◽

2015 ◽

Vol 29 (3) ◽

pp. 631-666 ◽

Cited By ~ 8

Author(s):

Sharad C. Asthana ◽

K. K. Raman ◽

Hongkang Xu

Keyword(s):

Financial Reporting ◽

Home Country ◽

Earnings Quality ◽

Audit Fees ◽

Foreign Companies ◽

Two Factors ◽

Just Price ◽

Reporting Environment ◽

The U.S

SYNOPSIS We examine why U.S.-listed foreign companies choose to have a U.S.-based (rather than home country-based) Big N firm as their principal auditor for SEC reporting purposes and the effects of that choice for audit fees and earnings quality. We find that the likelihood of the Big N principal auditor being U.S.-based is decreasing in client size and the level of investor protection in the home country, and increasing in the proportion of income earned outside the home country. We also find compelling evidence that U.S.-based Big N auditors are associated with higher-quality earnings (albeit for a higher fee), despite two factors—the greater distance between the U.S.-based (vis-à-vis home country-based) Big N auditor and the client, and the likelihood that much of the audit work is done outside the U.S.—which potentially could lower the earnings quality of the U.S.-listed foreign client when the Big N principal auditor is U.S.-based. Overall, our study suggests that the higher fees associated with a U.S.-based Big N principal auditor is not just price protection; rather, U.S.-based Big N principal auditors are also improving the financial reporting environment by reporting higher-quality audited earnings for their U.S.-listed foreign clients. JEL Classifications: L11; L15; M42.

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Starve all the lawyers: four theories of the just price

European Journal of the History of Economic Thought ◽

10.1080/09672567.2018.1555607 ◽

2019 ◽

Vol 26 (1) ◽

pp. 101-128

Author(s):

Åsbjørn Melkevik

Keyword(s):

Just Price

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ON THE INTERPRETATION OF THE JUST PRICE

Kyklos ◽

10.1111/j.1467-6435.1965.tb00992.x ◽

1965 ◽

Vol 18 (4) ◽

pp. 615-634 ◽

Cited By ~ 12

Author(s):

Samuel Hollander

Keyword(s):

Just Price

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Reflections on the ‘Just Price’ in Times of Crisis (with Reference to Coronavirus … but not only)

European Review of Contract Law ◽

10.1515/ercl-2021-2026 ◽

2021 ◽

Vol 17 (3) ◽

pp. 285-314

Author(s):

Emiliano Marchisio

Keyword(s):

Main Issue ◽

Private Firms ◽

Eu Law ◽

Free Markets ◽

Price Increases ◽

Price Adjustments ◽

Systemic Level ◽

Just Price ◽

Relative Scarcity ◽

Level Of Analysis

Abstract The debate about the ‘just price’ has ancient origin and returns forcefully to the scene when, in the event of crises of various kinds, there is a rapid and significant increase in prices of given goods or services. The main issue is whether price increases of such a nature could, or should, be considered illicit and ground the issue of sanctions against the firms increasing prices, thus focusing on a macro-systemic level of analysis. The central part of the article reviews different theories on what a ‘just price’ should be and focuses on the idea that a price is ‘just’ when it functions as an index of relative scarcity in free markets. It is claimed that such a function deserves protection by Italian and EU law. Therefore price adjustments in response to shocks cannot and should not be considered illegal: it is unacceptable to sanction private firms by attributing them the wrong of not having substituted themselves, at their own expense, for the exercise of a public function (that of making sure that price increases do not put at risk solidarity and other constitutional principles).

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