to an offset in audit fees through a reduction in the price of risk. Our estimate of this audit
fee offset appears to be economically relevant.
Section 2 reviews the literature and states the framework and hypotheses. Section
3 describes the data and sample. Section 4 states the empirical models and summarizes
the regression results. Section 5 discusses additional tests to check the consistency and
reliability of the results. The final section summarizes the study and suggests areas for
future research.