Paper Title
Principles-Based Accounting Rules and Auditing

Abstract
This paper examines the relations between principles-based accounting standards and audit fees. Our empirical evidence suggests auditors charge a lower fee when firms’ standards are more principles based. Our result is consistent with the notion that principles-based accounting standards improve earnings quality and reduce auditor’s risk-related premium. Further analysis indicates this fee saving is more pronounced for firms with strong corporate governance. The results add to the growing body of literature examining cost/benefit of principles-based accounting standards, as well as to the literature of the determinants of audit fees. Keywords - Principles-Based Accounting Standards; Rules-Based Accounting Standards; Auditing; Audit Fees. JEL Classifications - M40, M41, M42. Data Availability - Data used in the Analyses are obtained from Public Sources described in the Text.