Journal articles: 'Non-audit fees'

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Zaman, Mahbub, Mohammed Hudaib, and Roszaini Haniffa. "Corporate Governance Quality, Audit Fees and Non-Audit Services Fees." Journal of Business Finance & Accounting 38, no. 1-2 (January 2011): 165–97. http://dx.doi.org/10.1111/j.1468-5957.2010.02224.x.

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Lennox, Clive S. "Non-audit fees, disclosure and audit quality." European Accounting Review 8, no. 2 (July 1999): 239–52. http://dx.doi.org/10.1080/096381899336014.

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Keane, Matthew. "ABNORMAL AUDIT FEES, NON-AUDIT FEES AND AUDITOR-CLIENT RETENTION DECISIONS." International Journal of Business Research 14, no. 3 (October 1, 2014): 181–90. http://dx.doi.org/10.18374/ijbr-14-3.13.

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Ali, Muhammad Jahangir, Rajbans Kaur Shingara Singh, and Mahmoud Al-Akra. "The impact of audit committee effectiveness on audit fees and non-audit service fees." Accounting Research Journal 31, no. 2 (July 2, 2018): 174–91. http://dx.doi.org/10.1108/arj-11-2015-0144.

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Purpose The purpose of this study is to examine the impact of audit committee effectiveness on audit fees and non-audit service (NAS) fees in a less regulatory environment. Design/methodology/approach The authors construct a composite audit committee effectiveness measure incorporating audit committee independence, diligence, size, financial expertise and the chairperson’s accounting expertise. Findings The authors find that audit committee effectiveness has a positive significant impact on both audit fees and NAS fees. This suggests that effective audit committees can hold auditors accountable resulting in better audit quality and consequently higher audit fees. Originality/value The link between more effective audit committees with higher NAS purchases can be explained in light of the difference in regulatory requirements providing audit committees with decision rights on the use of NASs, therefore approving more NAS and increasing NASF. Additional tests and robustness analyses confirm the results.

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Dunmore, Paul, and Yingxin Sarah Shao. "Audit and Non‐Audit Fees: New Zealand Evidence." Pacific Accounting Review 18, no. 2 (July 2006): 32–46. http://dx.doi.org/10.1108/01140580610732804.

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Lim, Chee Yeow, David K. Ding, and Charlie Charoenwong. "Non-audit fees, institutional monitoring, and audit quality." Review of Quantitative Finance and Accounting 41, no. 2 (September 14, 2012): 343–84. http://dx.doi.org/10.1007/s11156-012-0312-1.

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Alrashidi, Rasheed, Diogenis Baboukardos, and Thankom Arun. "Audit fees, non-audit fees and access to finance: Evidence from India." Journal of International Accounting, Auditing and Taxation 43 (June 2021): 100397. http://dx.doi.org/10.1016/j.intaccaudtax.2021.100397.

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Al-Adeem, Khalid. "An Analysis of the Relationship between Audit Fees and Non-audit Fees." Arabian Journal of & Accounting. 18, no. 02 (December 1, 2015): 99–119. http://dx.doi.org/10.12785/aja/180204.

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Antle, Rick, Elizabeth Gordon, Ganapathi Narayanamoorthy, and Ling Zhou. "The joint determination of audit fees, non-audit fees, and abnormal accruals." Review of Quantitative Finance and Accounting 27, no. 3 (November 2006): 235–66. http://dx.doi.org/10.1007/s11156-006-9430-y.

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Leung, Sidney, and Ran Wang. "Family control, audit committees and audit fees." Corporate Ownership and Control 7, no. 3 (2010): 73–85. http://dx.doi.org/10.22495/cocv7i3p6.

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This paper examines the impact of family control on audit effort and audit risk as proxied by audit fees, the relation between the quality of the audit committee (AC) and audit fees, and how family control influences the association between AC quality and audit fees. Using a sample of Hong Kong companies from the 2005/06 fiscal year, we find that family-controlled firms have lower audit fees. The results also show a positive association between AC quality and audit fees in Hong Kong. Moreover, the association of higher AC quality with higher audit fees is stronger in family-controlled firms than in non-family-controlled firms. Collectively, our findings suggest that audit committees in family-controlled firms require a higher degree of external audit effort than do those in non-familycontrolled firms.

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Clatworthy, Mark A., Howard J. Mellett, and Michael J. Peel. "Changes in NHS Trust Audit and Non-Audit Fees." Public Money & Management 28, no. 4 (August 2008): 199–205. http://dx.doi.org/10.1111/j.1467-9302.2008.00645.x.

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Alexeyeva, Irina, and Tobias Svanström. "The impact of the global financial crisis on audit and non-audit fees." Managerial Auditing Journal 30, no. 4/5 (May 5, 2015): 302–23. http://dx.doi.org/10.1108/maj-04-2014-1025.

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Purpose – The paper aims to investigate audit and non-audit fees during the global financial crisis (GFC) in an environment that is relatively sparsely regulated with regard to the provision of non-audit services. Design/methodology/approach – Audit and non-audit fees were studied during pre-GFC (2006-2007), GFC (2008-2009) and post-GFC (2010-2011) periods. Findings – During the GFC, Swedish companies benefited from an increase in sales and total assets, although return on assets decreased. In this setting, the auditors charged higher audit fees compared with the pre-GFC period, despite the absence of increased audit reporting lags. A significant increase in audit fees continued during the post-crisis periods with auditors paying more attention to companies’ leverage and whether they report losses. At the same time, the companies spent less on non-audit services. Research limitations/implications – This study is limited to companies from Sweden, which was less affected by the GFC. Practical implications – GFC auditors are able to charge higher audit fees to public companies including those that are well-performing during financial crises, and they are also able to increase the audit fees in the post-crisis period. This implies that auditors put in extra audit effort to compensate for higher risk, or that they are good at negotiating prices with their clients. However, non-audit fees decreased during the same period, implying that the demand for these services drops under financial instability. Originality/value – The study highlights auditors’ behavior in the liberal economic environment and it studies both audit fees and non-audit fees before GFC, during GFC and after the GFC. The GFC appears to have provided audit firms the opportunity to extract higher audit fees. Our findings are of interest to managers, auditors and regulators.

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Krauss, Patrick, and Henning Zulch. "Non-Audit Services And Audit Quality: Blessing Or Curse?" Journal of Applied Business Research (JABR) 29, no. 2 (February 11, 2013): 305. http://dx.doi.org/10.19030/jabr.v29i2.7640.

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This study investigates whether and how audit quality is associated with the provision of non-audit services by the statutory auditor. Using a sample of 1,008 firm observations of major German listed companies for the sample period 2004-2011, our study is one of the first to thoroughly analyze this issue empirically for the German audit market. Consistent with prior studies we choose discretionary working capital accruals as our proxy for audit quality. Our empirical results demonstrate that total non-audit fees in general and audit related fees in particular are negatively associated with audit quality, while provided tax and other advisory services have an insignificant impact on audit quality. Our results imply that non-audit fees are a significant factor with regard to auditor independence and economic auditor-client bonding while we are not able to detect compensating high knowledge spillover effects from these services. The empirical results are robust to alternative accrual measures and estimation model specifications, while our empirical evidence is not robust with regard to alternative fee measures.

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Rahman, Md Jahidur. "Impact of section 201 of SOX on the relationship between audit and non-audit fees." Corporate Ownership and Control 12, no. 2 (2015): 26–36. http://dx.doi.org/10.22495/cocv12i2p3.

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This study aims to investigate the changes that the prohibition of the non-audit services by section 201 of SOX brought in the relationship between the audit fees and non-audit fees. Both univariate and multivatiate regression methodologies has been used to test the hypotheses. Using both OLS and two-stage least squares, this study find a weak positive relationship between audit fees and non-audit fees. This result suggests that the companies need to pay an increased rate of both audit and non-audit fees after SOX. The findings of this paper will be the use of financial reporting regulatory authorities such as Public Company Accounting Oversight Board (PCAOB). It will also guide the researchers for future investigations. This study will be the one of the first to provide evidence on the changes in the relationship between audit and non-audit fees because of the Section 201 of Sarbanes-Oxley Act

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Ittonen, Kim, Emma-Riikka Myllymäki, and Per Christen Tronnes. "Banks’ audit committees, audit firm alumni and fees paid to audit firm." Managerial Auditing Journal 34, no. 7 (July 1, 2019): 783–807. http://dx.doi.org/10.1108/maj-01-2018-1766.

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Purpose This paper focuses on bank audit committees and examines whether audit committee members who are former auditors are associated with the acquisition of audit and non-audit services from their former employers. Design/methodology/approach The study empirically examines a sample of large banks that are included in the S&P Composite 1500. Findings The paper reports significantly lower audit fees and a higher proportion of non-audit fees to total fees when the audit committee chair is an alumnus of the incumbent audit firm. Moreover, additional analysis reveals that these findings are stronger for banks with more earnings management. Research limitations/implications Overall, the findings indicate that audit firms might consider banks using their alumni as audit committee chairs to be less risky or easier to audit, thus requiring relatively less effort from the auditors. The reduced effort required to audit clients with audit firm alumni on their audit committees then has the effect of reducing the audit fees charged. Alternatively, their auditing experience and cognitive proximity might influence the assessment of the need for auditing or the ability to negotiate lower audit fees on the part of audit firm alumni. Originality/value This paper provides empirical evidence of the association between audit firm alumni in influential positions on an audit committee and fees paid to those audit firms in the banking industry. The findings contribute to the literature by suggesting that banks with affiliated former auditors chairing their audit committees not only have significantly lower audit fees but also a higher proportion is spent on non-audit services.

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Lu-Andrews, Ran, and Yin Yu-Thompson. "International Real Estate Review." International Real Estate Review 21, no. 2 (June 30, 2018): 169–226. http://dx.doi.org/10.53383/100259.

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We examine the geographic component of investment in audit services in the REIT industry. As REIT firms have strong incentive for information transparency and maintain high audit quality, we expect that geographic distance, as a proxy for information flow, among REIT firms, their auditor, and the Securities and Exchange Commission (SEC) offices have effects on the audit and non-audit fees paid by REIT firms. We find that: 1) REIT firms pay more audit and non-audit fees to their auditor when their headquarters are located closer to the SEC offices; 2) REIT firms pay higher audit and non-audit fees when the office of their auditor is closer to the SEC, 3) REIT firms pay higher audit and non-audit fees when the office of their auditor is located closer to their headquarters, and 4) REIT firms that are close to both the SEC and their auditor pay the highest fees for both audit and non-audit services. The results are consistent with our expectation that REIT firms desire high quality audit services and are willing to pay higher fees for them. Also, the REIT industry may enjoy the knowledge spillovers between the audit and non-audit sides and the industry specialization of their auditor.

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Chiu, Tiffany, Feiqi Huang, Yue Liu, and Miklos A. Vasarhelyi. "The impact of non-timely 10-Q filings and audit firm size on audit fees." Managerial Auditing Journal 33, no. 5 (May 8, 2018): 503–16. http://dx.doi.org/10.1108/maj-10-2017-1673.

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Purpose Prior studies suggest that non-timely 10-Q filings indicate higher potential risks than non-timely 10-K filings. Furthermore, larger audit firms tend to be more risk-averse and conservative about reporting. Inspired by these research streams, this paper aims to investigate the influence of non-timely 10-Q filings on audit fees and the impact of audit firm size on this association. Design/methodology/approach The cross-sectional audit fee regression model used in this study is similar to that used in prior audit fee research (Simunic, 1980; Francis et al., 2005; Hay et al., 2006; Wang et al., 2013). The model includes the following five major characteristics that would influence auditors’ fee decisions: auditee size (LNAT), complexity (REIVAT, FOREIGN, SEG), financial condition (LOSS, ROA, GROWTH, ZSCORE), special events (ICW, RESTATE, INITIAL, GC) and auditor type (BIG4). To examine the effect of non-timely 10-Q filings on audit fees, the variable NT10Q is included in the audit fee model. Findings The results indicate that when both non-timely 10-K and non-timely 10-Q filings are included in the regression model, only non-timely 10-Q filings are significantly associated with higher audit fees, suggesting that the presence of non-timely 10-Q filings signals more serious underlying problem than non-timely 10-K filings in the audit fees decision processes. In addition, we find that audit fees for firms audited by Big 4 auditors are 26.4 per cent higher when those firms file non-timely 10-Q reports, whereas there is no significant association between non-timely 10-Q filings and audit fees for firms audited by non-Big 4 auditors. Practical implications As no attention has been paid to the investigation of the impact of non-timely 10-Q filings on audit fees, with the aim of filling the gap of this specific research area, this study examines the association between non-timely 10-Q filings and audit fees and the influence of audit firm size on this association. Originality/value The contribution of this paper is threefold: first, it is the first study to examine the association between non-timely 10-Q filings and audit fees. The results show that non-timely 10-Q filings are a better and earlier indicator of audit risk than non-timely 10-K filings. Second, the results reveal that the relationship between non-timely 10-Q filings and audit fees is affected by audit firm size. Specifically, Big 4 auditors tend to charge higher audit fees in the presence of non-timely 10-Q filings, reflecting that they are more sensitive to audit risk than smaller audit firms are. Third, an examination of the quarterly effect of non-timely 10-Q filings on audit fees indicates a stronger effect from the first quarter’s non-timely 10-Q filings, compared to the second or third quarter.

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El Guindy, Medhat N., and Nadia Sbei Trabelsi. "IFRS adoption/reporting and auditor fees: the conditional effect of audit firm size and tenure." International Journal of Accounting & Information Management 28, no. 4 (April 29, 2020): 639–66. http://dx.doi.org/10.1108/ijaim-09-2019-0107.

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Purpose This paper aims to investigate the impact of International Financial Reporting Standards (IFRS) adoption on audit and non-audit fees in the UK setting. The study investigates whether UK firms adopting IFRS for the first time or reporting under IFRS, in general, are being charged higher audit and non-audit fees and whether this impact is conditional on audit firm size and tenure. Design/methodology/approach Using empirical data for UK listed firms from 2003-2007, the paper uses a regression model that explains audit and non-audit fees by independent variables measuring auditors’ and auditees’ characteristics including IFRS adoption and reporting. Additional regressions with interaction terms were performed to test the hypothetical conditional impact of auditor size and audit firm tenure on the above-mentioned association. Findings Audit and non-audit fees increase significantly for companies adopting IFRS for the first time and this increase is persistent during later years. In addition, results suggest that both Big four and non-Big four auditors charge higher audit and non-audit fees to their clients adopting or reporting under IFRS in a similar manner. Furthermore, findings indicate that audit firms increase audit and non-audit fees for old and new clients using IFRS which suggests no low-balling effect is detected. Research limitations/implications Results reported in this study provide insights to regulators in jurisdictions similar to the UK regarding the cost of IFRS adoption which includes higher audit and non-audit fees imposed by both Big four and non-Big four audit firms. In addition, this study argues, to some extent, against the notion that auditors may charge lower fees in the early years of the audit engagement to win new audit clients. Originality/value To the best of the knowledge, the findings are unique at two levels. First, the paper provides evidence on the cost of using IFRS in the UK jurisdiction which was not explored by previous research. Second, the paper investigates the potential conditional effect of auditor size and audit tenure on the association between IFRS adoption and auditors’ fees.

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Staszkiewicz, Piotr, and Rumiana Górska. "The non-audit fee and the auditee’s failure risk." Zeszyty Teoretyczne Rachunkowości 2018, no. 99 (155) (August 20, 2018): 97–118. http://dx.doi.org/10.5604/01.3001.0012.2935.

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This paper examines whether the auditee’s financial situation affects the auditor’s non-audit fee and independ- ence. Three sets of tests were used to address the issue. The first examines whether there are cross-border and intertemporal differences in relationships between non-audit fees and audit fees. The second tests whether there is a relationship between non-audit fees and report modification. The third addresses the relationships between audit fees and the auditee’s financial situation. The results suggest a lack of coexistence of all three motives for the purchase of non-audit fee services, and substantial similarities of auditor and auditee behaviors across Po- land and New Zealand. We documented the lack of a significant link between auditee failure risk and the quality of the audit report. Our findings indicate an operational rather than a strategic nature of non-audit services to incumbent clients.

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Hay, David C. "Audit Fee Research on Issues Related to Ethics." Current Issues in Auditing 11, no. 2 (September 1, 2017): A1—A22. http://dx.doi.org/10.2308/ciia-51897.

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SUMMARY Audit fees are related to important ethical issues for auditors. There has been increasing research on audit fees recently, including research on potential ethical risks regarding audit fees, which helps to illuminate some of these professional issues. The International Ethics Standards Board for Accountants (IESBA) is very interested in this area and asked me to prepare a paper reviewing the relevant research. This summary reviews research that became available from 2006 to 2016 on four issues related to audit fees—fee level, dependence, non-audit fees, and firms that have a significant non-audit services business. Examining the research shows consistent evidence about two issues, namely that audit fees for new engagements are lower and that non-audit services affect independence in appearance. There are two further issues about which there is some concern. First, there are occasional studies reporting evidence that non-audit services provided by an auditor are associated with a loss of independence indicated by lower audit quality, even though most research does not support this conclusion. Second, there has been recent concern about growth in non-audit services to non-audit clients and there is some preliminary evidence that audit quality is lower in firms that have more extensive non-audit businesses. In general, although audit fee research does not convey a message that there are widespread ethical problems, the body of research shows that there are some risk areas.

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Amir, Eli, Yanling Guan, and Gilad Livne. "Abnormal Fees and Timely Loss Recognition—A Long-Term Perspective." AUDITING: A Journal of Practice & Theory 38, no. 3 (December 1, 2018): 1–22. http://dx.doi.org/10.2308/ajpt-52348.

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SUMMARY We examine the relation between timely loss recognition and abnormal audit, non-audit, and total fees over a period of thirteen years. We use positive abnormal audit (non-audit) fees as a measure of abnormal audit effort (economic bond). We report some evidence suggesting audit effort is associated with slower loss recognition in accruals before the Sarbanes-Oxley Act (SOX) became effective. We find stronger evidence that audit effort is associated with slower loss recognition post-SOX when clients raise substantial external funds or when the auditor is not an industry specialist. Using C_Score, we find a negative association between changes in abnormal audit fees and total fees, and changes in C_Score only post-SOX. We do not find abnormal non-audit fees are associated with the speed of loss recognition. Collectively, the results suggest post-SOX auditors exert more effort when losses are delayed and that non-audit services do not compromise auditor independence.

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Vermeer, Thomas E., K. Raghunandan, and Dana A. Forgione. "Audit Fees at U.S. Non‐Profit Organizations." AUDITING: A Journal of Practice & Theory 28, no. 2 (November 2009): 289–303. http://dx.doi.org/10.2308/aud.2009.28.2.289.

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Mitra, Santanu, and Mahmud Hossain. "Ownership composition and non-audit service fees." Journal of Business Research 60, no. 4 (April 2007): 348–56. http://dx.doi.org/10.1016/j.jbusres.2006.10.025.

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Basioudis, Ilias G., Evangelos Papakonstantinou, and Marshall A. Geiger. "Audit Fees, Non-Audit Fees and Auditor Going-Concern Reporting Decisions in the United Kingdom." Abacus 44, no. 3 (September 2008): 284–309. http://dx.doi.org/10.1111/j.1467-6281.2008.00263.x.

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Wang, Changjiang, K. Raghunandan, and Ruth Ann McEwen. "Non-Timely 10-K Filings and Audit Fees." Accounting Horizons 27, no. 4 (August 1, 2013): 737–55. http://dx.doi.org/10.2308/acch-50591.

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SYNOPSIS The SEC requires that firms failing to file their annual reports within the specified deadlines file a Form NT 10−K with the Commission. In this paper, we examine the impact of non-timely filings on audit fees. We find that in the case of accelerated filers, audit fees are 26 (12) percent higher for those firms that had a Form NT 10-K filing in the previous (current) year. There is no such statistically significant association between non-timely filing and audit fees in the case of non-accelerated filers, but this result is driven by the clients of non-Big 4 auditors. Our results add to the stream of research related to non-timely filings of annual reports, and provide additional evidence about differences in audit quality/risk between Big 4 and non-Big 4 audit firms. The results also reinforce findings from recent studies about the significant differences in the market for audit services of accelerated and non-accelerated filer firms.

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Ali, Muqaddam Oyetunji, and Wan Amalina Wan Abdullah. "Internal Audit Function and Audit Fees: Evidence from Nigeria." Li Falah: Jurnal Studi Ekonomi dan Bisnis Islam 6, no. 1 (June 30, 2021): 15. http://dx.doi.org/10.31332/lifalah.v6i1.2902.

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The purpose of this study is to analyse the relationship between audit fees and internal audit function in the Nigerian listed companies. This study observes 60 non-financial firms over four years (2012 to 2015) and uses random effect regression model to examine the hypothesis. The result of the study found internal audit to be significantly related with amount of audit fees paid by the listed firms. Specifically, this study found internal audit expertise and size of internal audit unit to have a positive and significant relationship with audit fees while no relationship was documented between internal audit certificate and the amount of audit fees. The study concludes that company with effective and adequate internal audit unit tend to pay higher audit fees to the external auditors.

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Musa, Wasiu Ajani, Ramat Titilayo Salman, and Ibrahim Olayiwola Amoo. "Determinants of audit fees in quoted financial and non-financial firms." Corporate Law and Governance Review 3, no. 2 (2021): 30–40. http://dx.doi.org/10.22495/clgrv3i2p3.

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Regulators have ensured the compulsory disclosure of audit fees in the financial statement to overcome abnormal fees and instill credibility in the financial report since audit pricing is contingent upon audit quality. However, discrepancies between audit fee dimensions are evidenced in the abnormal audit fees, resulting in accounting scandals. Hence, this study assessed the determinants of audit fees in quoted financial and non-financial firms by building a model underpinned by agency theory (Mitnick, 2006) and economic theory of product differentiation (Beath & Katsoulacos, 1991). Secondary data were utilized from companies’ annual reports between 2009 and 2018 using the purposive sampling technique. Furthermore, Breusch-Pagan Lagrangian multiplier (LM) test and the Hausman test indicated the consistency of the models. The static panel regression estimations showed that auditee size, risk, auditor size, reputation, engagement lag, and International Financial Reporting Standards (IFRS) implementation significantly affect audit fees in both sectors. This study concluded that the three dimensions largely determine audit fees. This study instructively proposed that assurance clients should devise an outline of guidelines and practices to guide activities in the sectors by monitoring the variables that impact audit fees

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Park, Hong-jo, Jeong-un Choi, and Joonhei Cheung. "The Effect Of Auditor Change On Initial Audit Fee Discount And Non-Audit Services." Journal of Applied Business Research (JABR) 33, no. 1 (December 27, 2016): 95–106. http://dx.doi.org/10.19030/jabr.v33i1.9870.

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The purpose of this research is to verify whether non-audit services are provided without additional fees at the initial audit as a strategy to win an external audit contract, which could give the appearance of initial audit fee discount. From the results, non-audit services are provided at the initial audit, and the initial audit fee is discounted accordingly, only when the independent auditor is changed from a Big 4 accounting firm to a non-Big 4 accounting firm. However, there is no meaningful relevance in any other types of changes. Therefore, if the auditor is changed from a Big 4 accounting firm to a non-Big 4 accounting firm, non-audit services are provided without additional fees in order to win an external audit contract, and the publication of audit fees with a division between the audit service fee and the non-audit service fee may give the appearance of a discounted audit service fee.

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Onulaka, Paul Nnamdi, Moade Fawzi Shubita, and Alan Combs. "Non-audit fees and auditor independence: Nigerian evidence." Managerial Auditing Journal 34, no. 8 (September 2, 2019): 1029–49. http://dx.doi.org/10.1108/maj-06-2017-1576.

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Purpose This study aims to investigate the extent to which the provision of non-audit services (NAS) by external auditors to audit clients affects auditors’ independence and the audit expectation gap in Nigeria. Design/methodology/approach The study adopts an interpretivist approach. In total, 30 semi-structured, face-to-face interviews were conducted to explore the views expressed by audit partners and pension fund managers in Nigeria; group responses were evaluated and presented separately. After transcribing the interview audio recordings, a thematic data analysis of the two groups’ responses was performed. Findings Interpretation of the interview responses indicates that the provision of NAS by audit firms to their audit clients is regarded by auditors as a matter of economic necessity. Nevertheless, it is also perceived as impeding auditors’ independence and increasing the gap between the auditor and public expectations. Practical implications This study contributes to the debate surrounding the need for an independent body to oversee auditing standard setting distinct from the current practice to enhance transparency. Originality/value A qualitative analysis of the nuanced responses obtained from the semi-structured interviews reveals starkly the perceived economic pressures on auditors to accept non-audit work. Moreover, it endorses the regulation to restrict non-audit work in support of a sustainable fee level for an independent audit.

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Carmona, Pedro, Alexandre Momparler, and Carlos Lassala. "The relationship between non-audit fees and audit quality: dealing with the endogeneity issue." Journal of Service Theory and Practice 25, no. 6 (November 9, 2015): 777–95. http://dx.doi.org/10.1108/jstp-07-2014-0163.

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Purpose – The purpose of this paper is to explore whether the provision of non-audit services (NAS) by public accounting firms undermines audit quality. The study addresses this question by testing for an association between the provision of consulting services and auditor independence in listed companies. Design/methodology/approach – The authors study if the magnitude of non-audit fees explains variations in earnings management by looking at the joint determination of non-audit fees, audit fees, and abnormal accruals using the SURE-regression estimation method. Findings – Evidence from tested models suggests that audit services quality is uncompromised by the provision of NAS. In other words, high non-audit fees do not necessarily result in poor quality financial reporting. Research limitations/implications – A different research methodology and a different sample (e.g. non-listed companies) may lead to differing results. As the paper analyses only one country, generalizability of the results might be a limitation. There is no need to increase legal restrictions on the provision of consulting services by public accounting firms in order to better safeguard audit quality. Practical implications – Consulting clients may be more confident to hire both audit and NAS with the same firm and can make a case before the general Shareholders’ meeting. By providing both audit and NAS, consulting firms obtain knowledge spillovers and synergies while appealing highly qualified professionals. Originality/value – The use of simultaneous equations (SURE-regression) to establish the auditor-client relation allows us to better model theoretical relations between audit fees, non-audit fees, and abnormal accruals. Likewise, joint modeling takes account of correlations between the error terms of the individual models, yielding more efficient estimates than ordinary least squares. Performing this analysis in a non-Anglo-American country with low litigation risk is also a valuable contribution to extant literature.

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Köhler, Annette G., and Nicole V. S. Ratzinger-Sakel. "Audit and Non-Audit Fees in Germany — The Impact of Audit Market Characteristics." Schmalenbach Business Review 64, no. 4 (October 2012): 281–307. http://dx.doi.org/10.1007/bf03396843.

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김주택. "The Effect of Accounting Firms' Non－Audit Service on Audit Fees." Global Business Administration Review 6, no. 3 (September 2009): 45–65. http://dx.doi.org/10.17092/jibr.2009.6.3.45.

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Adelopo, Ismail. "Modelling issues in the relationship between audit and non‐audit fees." Journal of Applied Accounting Research 10, no. 2 (September 11, 2009): 96–108. http://dx.doi.org/10.1108/09675420910984664.

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Whisenant, Scott, Srinivasan Sankaraguruswamy, and K. Raghunandan. "Evidence on the Joint Determination of Audit and Non-Audit Fees." Journal of Accounting Research 41, no. 4 (September 2003): 721–44. http://dx.doi.org/10.1111/1475-679x.00121.

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Munisi, Gibson. "Ownership structure and audit fees: Evidence from Sub-Saharan Africa." Accounting 9, no. 1 (2023): 55–66. http://dx.doi.org/10.5267/j.ac.2022.9.001.

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This study examines the factors affecting audit fees in firms listed primarily in Sub-Saharan Africa countries by focusing on the relationship between ownership structure and audit fees. The study uses an unbalanced panel dataset of 531 observations of non-financial firms collected from annual reports for the years 2005 to 2009. The findings show that audit fees vary with ownership structure. Particularly, the study shows managerial ownership and concentrated ownership are negatively related to audit fees, whereas foreign ownership is related positively to audit fees. This study provides valuable insights on effects of ownership structure on audit fees pricing. Specifically, the study emphasizes that decisions of pricing of audit fees should consider characteristics of the ownership structure of a firm. The study makes contributions to the literature that focuses on the nexus between corporate governance and audit fees. Particularly, the findings provide empirical evidence of impacts of ownership structure on audit fees in Sub-Saharan African context, which is characterized by less developed financial markets and a weak institutional environment relative to developed countries where most studies are conducted.

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Parkash, Mohinder, Rajeev Singhal, and Yun Ellen Zhu. "Group-affiliated Firms and audit fees: Evidence from India." International Review of Business and Economics 4, no. 1 (2020): 1–23. http://dx.doi.org/10.56902/irbe.2020.4.1.5.

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This study analyzes the role of auditors and affiliation to a business group in corporate governance of firms by examining the audit fees charged to group-affiliated and independent firms. Agency problems in firms may be mitigated by the monitoring provided by controlling investors of firms affiliated to business groups. On the other hand, concentrated ownership may also result in higher agency costs because of inefficient profit distributions, tunneling, and complicated ownership structures. Audit fees are determined by the effort expended and the risks faced by auditors. We examine the relationship between audit fees and Group-affiliation for Indian firms. We find that the audit fees paid to BigN auditors are lower for Group-affiliated firms than non-Group-affiliated firms, but audit fees paid to non-BigN auditors are significantly higher for Group-affiliated and non-Group-affiliated firms, consistent with the idea that BigN auditors recognize the role of Group-affiliation in mitigating the agency conflicts.

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Salmen Aljaaidi, khaled, Shamharir Bin Abidin, and Waddah Kamal Hassan. "Audit Fees and Audit Quality: Evidence from GCC Region." AD-minister, no. 38 (June 30, 2021): 121–59. http://dx.doi.org/10.17230/ad-minister.38.5.

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This study examines the association of audit fees with audit quality among a total of 104 and 108 non-financial companies listed on GCC stock markets for the periods preceding and subsequent the event, respectively, over the period 2005–2010. Using OLS regression, the results show that there is a significantly positive association between audit fees and audit quality for the periods preceding and subsequent the new auditor selection. Further, the results of this study contribute to the existing theory and empirical evidence of how the audit fees are associated with audit quality in the periods preceding and subsequent to the new auditor selection. This study offers policy-makers additional evidence to be used for setting up and/or enacting regulations in GCC region regarding issues related to audit fees.

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Habib, Ahsan, and Ainul Islam. "Determinants and consequences of non‐audit service fees." Managerial Auditing Journal 22, no. 5 (May 29, 2007): 446–69. http://dx.doi.org/10.1108/02686900710750748.

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Al-Okaily, Jihad. "The effect of family control on audit fees during financial crisis." Managerial Auditing Journal 35, no. 5 (March 6, 2020): 645–65. http://dx.doi.org/10.1108/maj-12-2018-2114.

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Purpose The purpose of this study is to empirically examine the effect of family involvement in ownership, management and directorship on audit fees during the crisis and non-crisis periods. Design/methodology/approach Following Anderson and Reeb (2003), this paper uses a two-way fixed effect model to examine the impact of family control on audit fees in crisis and non-crisis periods. The fixed effects include dummy variables for each year and each industry code in the sample. Findings This paper finds that during normal economic periods, family firms pay lower audit fees relative to non-family firms because of the incentive alignment or monitoring effect. While, during crisis periods, family firms pay higher audit fees because of the shareholder expropriation effect. Research limitations/implications The results reported in this paper have both practical and policy implications for the demand and supply of audit services to firms having different ownership structures. Originality/value This is the first study of its kind to examine the effect of family ownership and involvement on audit fees during the crisis period.

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Sisna Armawan, I. Putu, and I. Dewa Nyoman Wiratmaja. "Pengaruh Pengalaman, Kompetensi, Independensi dan Fee Audit pada Kualitas Audit." E-Jurnal Akuntansi 30, no. 5 (May 25, 2020): 1208. http://dx.doi.org/10.24843/eja.2020.v30.i05.p11.

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The research aims to obtain empirical evidence of the effect of experience, competence, independence, and audit fees on audit quality. This research was conducted at a Public Accountant Office in Bali registered in IAPI (Institut Akuntan Publik Indonesia) 2019. The method of determining the sample uses non-probability sampling techniques. The number of samples in this study were 48 auditors. The data collection method uses a questionnaire. The analysis technique used is multiple linear regression. The results showed that experience, competence, independence and audit fees had a positive effect on audit quality. Keywords: Experience; Competence; Independence; Audit Fees; Audit Quality.

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Ma, Dongshan, Shengqiang Zhang, and Jiayu Zhao. "The High-Speed Railway Opening and Audit Fees: Evidence from China." Sustainability 14, no. 20 (October 17, 2022): 13353. http://dx.doi.org/10.3390/su142013353.

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By constructing a staggered difference-in-differences model, we examined the effect of the high-speed railway opening on audit fees and its mechanism. The high-speed railway opening significantly reduces audit fees, and the inhibitory effect is more pronounced in firms located in non-central cities and small- and medium-sized audit firms. Furthermore, the high-speed railway opening mainly affects the audit fees by intensifying the competition in the audit market, but information asymmetry has no significant impact, indicating that the high-speed railway opening mainly reduces the audit fees by reducing the audit costs. In addition, the high-speed railway opening can improve the audit quality, which further shows that the high-speed railway opening can promote reasonable competition in the audit market.

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Sari, Sarlina. "Pengaruh Revaluasi Asset Non Keuangan, Goodwill dan Goodwill-impairment Terhadap Biaya Audit dengan Kepemilikan Keluarga sebagai Variabel Moderasi." Moneter - Jurnal Akuntansi dan Keuangan 7, no. 1 (March 31, 2020): 15–23. http://dx.doi.org/10.31294/moneter.v7i1.6838.

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The purposes of this study are to examine the effect of non-financial assets revaluation, goodwill and goodwill-impairment on audit fees family ownership as moderating variables. This research uses sample of Indonesia Stock Exchange non-financial companies from the years 2011-2015. Regression results show that revaluation of non-financial assets, goodwill and goodwill-impairment have no effect on audit fees. However, companies that family-owned, the audit fee is higher if the companies revalue its nonfinancial assets. The results of this study can be considered by regulators to set auditing standards related to audit of fair value that require complex accounting estimates, so that auditors are more aware abaout the reliability of fair values that are difficult to observe.Keywords: Non-financial assets revaluation; goodwill, goodwill-impairment; audit fees; family ownership

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Gul, Ferdinand A., Mehdi Khedmati, Edwin KiaYang Lim, and Farshid Navissi. "Managerial Ability, Financial Distress, and Audit Fees." Accounting Horizons 32, no. 1 (September 1, 2017): 29–51. http://dx.doi.org/10.2308/acch-51888.

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SYNOPSIS This study examines whether the relationship between managerial ability and audit fees is conditional on financial distress. We find that higher managerial ability increases audit fees in financially distressed firms and decreases audit fees in non-distressed firms. We also observe that financially distressed firms with higher-ability managers display lower accrual quality and a higher likelihood of restatement. Moreover, higher-ability managers in distressed firms engage more in opportunistic financial reporting to concurrently maximize equity-based compensation and cope with debt refinancing pressures, which increases audit risks and results in greater audit fees. We confirm our results using a battery of sensitivity and additional analyses.

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Lauwangsa, Jovan Krishna, Vanya Amartyazenna Suryadi, Yang Elvi Adelina, and Vania Pradipta Gunawan. "FINANCIAL DISTRESS AND MANAGERIAL ABILITY ON AUDIT FEE." Jurnal Akuntansi Kontemporer 15, no. 1 (January 2023): 37–51. http://dx.doi.org/10.33508/jako.v15i1.4127.

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Research Purposes. This paper examines the effect of managerial ability on audit fees, examines the effect of financial difficulties on the relationship between managerial ability and audit fees, and examines the effect of opportunistic reporting carried out by management in the form of earning management on audit fees. Research Method. The studies that were carried out used secondary data from 139 non-financial companies listed on the Indonesia Stock Exchange from 2016 to 2020. Research Result and Findings. Through a linear regression of panel data, the study found that higher amount of audit fees was positively influenced by the manager's ability to manage company resources and found that abnormal cash flow real earning management had a positive influence on audit fees. The study also found that financial difficulties did not moderate the relationship between a company's managerial ability and its audit fees, but found that companies with financial difficulties had higher audit fees.

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Quick, Reiner, Daniel Sánchez Toledano, and Joaquín Sánchez Toledano. "The impact of auditor-provided non-audit services on audit quality: A review of the archival literature." Corporate Ownership and Control 20, no. 2 (2023): 93–112. http://dx.doi.org/10.22495/cocv20i2art8.

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The paper gives an overview of the results of a structured literature review. It covers archival studies on the relationship between non-audit services (NAS) fees and factual as well as perceived audit quality published in journals included in the accounting subject category of the SCImago Journal Ranking. It also includes a critical evaluation of the research methods applied in prior research and offers avenues for future research. The provision of NAS to audit clients creates threats to auditor independence. Consequently, regulators have focused on the simultaneous provision of audit and NAS for many years and restricted it over time. This paper aims to assess which regulatory actions are justified in light of related archival research findings. Overall, prior research does not clearly prove a negative impact of non-audit services on factual audit quality. However, it demonstrates a negative relationship between non-audit fees and audit quality perceptions. Moreover, it also reveals that tax consulting fees are less problematic

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CRUCEAN, Andreea Claudia, and Camelia Daniela HATEGAN. "Evolution of Audit Fees - Perspective on Auditors` Risks." Audit Financiar 20, no. 167 (July 28, 2022): 484–98. http://dx.doi.org/10.20869/auditf/2022/167/016.

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Audit fees are among the essential concerns of audit firms and regulators. The paper's objective is to analyze the evolution of audit fees collected by auditors. Based on the data included in the Audit Analytics database, a sample of 1927 distinct companies was selected. 24921 observations were reported, representing audit fees from 2009 to 2020. The research showed that the audit market was concentrated around Big4 auditors, whose number increased directly to the number of issued reports. Most of the audited companies were in the field of Finance, insurance, and real estate (28%) and in the field of Production (32%), the majority being headquartered in the United Kingdom and France. The evolution of audit fees fluctuated during the analyzed period, but the trend of the average fee was decreasing. The share of fees was 58.6% for performing audit missions and 40.4% for non- audit services. The evolution of the average fee was inversely proportional to the value of the declared income and assets and the audit fees collected by the auditors. Therefore, the level of fees should be correlated with the volume of auditors' activity, the industries' complexity and the financial performance of the companies.

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Bum-Jin Park and Bae Khee Su. "The Effects of Types of Non-audit Services on Abnormal Audit Fees." Korea International Accounting Review ll, no. 52 (December 2013): 101–20. http://dx.doi.org/10.21073/kiar.2013..52.005.

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Firth, Michael. "The Provision of Non-audit Services and the Pricing of Audit Fees." Journal of Business Finance Accounting 24, no. 3 (April 1997): 511–25. http://dx.doi.org/10.1111/1468-5957.00118.

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Ghosh, Aloke (Al), Sanjay Kallapur, and Doocheol Moon. "Audit and non-audit fees and capital market perceptions of auditor independence." Journal of Accounting and Public Policy 28, no. 5 (September 2009): 369–85. http://dx.doi.org/10.1016/j.jaccpubpol.2009.07.001.

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LIM, CHEE-YEOW, and HUN-TONG TAN. "Non-audit Service Fees and Audit Quality: The Impact of Auditor Specialization." Journal of Accounting Research 46, no. 1 (December 17, 2007): 199–246. http://dx.doi.org/10.1111/j.1475-679x.2007.00266.x.

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Journal articles on the topic 'Non-audit fees'

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