The Relationship between the Corporate Financial Constraints and Auditor’s Fees in light of the Moderating Role of Cash Holdings and the board Characteristics: An Empirical Study on Companies Listed in the Egyptian Stock Exchange

The purpose of this paper is to study and examine research the effect of the corporate financial constraints on auditor’s fees. In addition, the study investigated the effect of cash Holdings and the characteristics of the board of directors as moderating variables on the pervious relationship. The multiple linear regression method was used to test the research hypotheses. the sample used in the current study consists of (97) non-financial firm listed on the Egyptian Stock Exchange with a total (477) annual views for the period from 2016 through 2020.
The research relied on the use of alternative measures of research variables in order to analyze the stability and reliability of the results, where the corporate financial constraints were measured by (KZ-Index), and the cash dividends paid to shareholders index. The auditor's fees were also measured through the natural logarithm of fees, and the value of the fees.
Under the fundamental analysis, the results of the study showed that there was no significant effect of the corporate financial constraints on the auditor's fees. In addition, the results showed that there was no significant effect of the level of cash Holdings, the size of the board of directors, the duplication, and the number of board meetings on the previous relationship. While there is a significant negative effect of each of the characteristics of the board of directors combined, and the diversity of the gender of the board members on the previous relationship.
Under further analysis, all the moderating variables were treated as control variables. The results showed that there was no significant effect of the level of cash Holdings, board size, duplication, number of meetings, and gender diversity of board members on the auditor's fees. Finally, under the sensitivity analysis, the result of the sensitivity analysis is complete agreement with the results of the fundamental analysis with respect to the first main hypothesis. This indicates that the results of sensitivity analysis fully support the results of the fundamental analysis related to the main relationship under study.