Determinants of the External Audit Fee of UK Unquoted Companies — Some New Evidence

Brinn, Tony; Peel, Michael J.; Roberts, Roydon Alexander

doi:10.1108/eb028255

Cited by 3 publications

(3 citation statements)

References 1 publication

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“…Hence, the study hypothesis regarding the association between auditee complexity and audit fees is proven and the variation of audit fees for the machinery equipment companies is significantly affected by auditee complexity. The findings were therefore consistent with the results of studies conducted by Brinn et al (1992) in the UK, Hay et al (2006) in New Zealand, Naser and Nuseibeh (2008) in Jordon, and Thinggaard and Kiertzner (2008) in Denmark, who found that auditee complexity has a significant impact on determining audit fees. However, these results were inconsistent with the findings of Zhang and Myrteza (1996), and Ahmed and Goyal (2005), who found a negative correlation between auditee complexity and audit fees.…”

Section: Discussion Of the Study's Resultssupporting

confidence: 89%

Determinants of Audit Fees : Evidence from UK Alternative Investment Market

Mohammed

Saeed

2018

ACAD J NAWROZ UNIV

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The main purpose of this study is to examine the determinants of audit fees in the Alternative Investment Market (AIM) using a sample of 23 machinery equipment companies covering the period from 2007 to 2011. The factors that have been hypothesized to be having a significant correlation with audit fees are auditee size, auditee complexity, audit risk, and auditor size. The results show that auditee size and auditee complexity are the main significant determinants of audit fees in the AIM. The findings also indicated a positive relationship between audit timing and audit fees. However, there was not significant evidence of a positive correlation between auditee risk and audit fees, which demonstrated that risk perceived by the auditor does not affect the value of fees. The results also indicated that there is no difference in the fees value between large or small clients. Moreover, the study demonstrated that there is no correlation between providing non-audit service and audit fees. Therefore, it is believed that the differences of these results with other studies in this field are due to the differences in the regulatory framework of the market selected as a sample for this study.

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Section: Discussion Of the Study's Resultssupporting

confidence: 89%

Determinants of Audit Fees : Evidence from UK Alternative Investment Market

Mohammed

Saeed

2018

ACAD J NAWROZ UNIV

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“…With reference to the extensive previous hypotheses development and empirical evidence contained in the extant literature (see e.g. Brinn et al, 1991;Yardley et al, 1992, for reviews), a positive relationship is expected between audit fees and the firm size and complexity variables (SIZE, SUBS, FORS). These variables proxy for audit scale/effort and audit complexity and represent sales, number of subsidiaries and the ratio of foreign to total subsidiaries respectively.…”

Section: Control Variablesmentioning

confidence: 99%

The Relationship Between Governance Structure and Audit Fees Pre‐Cadbury: some empirical findings

Peel

Clatworthy

2001

Corporate Governance

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In this paper we provide new evidence on the relationship between internal governance structures (board composition and ownership concentration) and audit fees of UK industrial quoted companies, before the recommendations of the Cadbury Committee were implemented. We also develop a new hypothesis derived from agency theory, in an attempt to explain the puzzling positive relationship between audit and non-audit fees. In common with post-Cadbury research, we find no significant evidence that board structure variables, including chairman/chief executive officer split and the proportion of non-executive directors on the board, impact significantly on external audit fees. Also, while prior research has shown that the aggregated level of institutional and managerial ownership are negatively associated with audit fees, we find that only one constituent of this variable, namely directors' ownership, has a significant impact.

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“…Norway: Firth, 1997. UK: Taylor and Baker, 1981; Taffler and Ramalinggam, 1982; Haskin and Williams, 1988; Brinn et al , 1991; Chan et al , 1993; Brinn et al , 1994; Pong and Whittington, 1994; O'Sullivan and Diacon, 1994; Che Ahmed and Houghton, 1996; Gregory and Collier, 1996; Ezzamel et al , 1996; Iyer and Iyer, 1996; O'Sullivan, 2000; Peel and Clatworthy, 2001; Chung and Narasimhan, 2002; Ezzamel et al , 2002; Niemi, 2002; O'Sullivan and Diacon, 2002; Simon and Taylor, 2002).…”

Section: Introductionmentioning

confidence: 99%

Determinants of audit fees: empirical evidence from an emerging economy

Naser

Nuseibeh²

2007

International Journal of Commerce and Management

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PurposeThe study investigates the structure of audit fees in an emerging economy, Jordan.Design/methodology/approachThe following regression model will be tested: ADFEES = f (SIZE, AUST, COMP, INDS, PROF, RISK, YEND, TLAG). The model is tested by running a cross‐sectional linear ordinary least squares (OLS) regression of the audit fees on corporate size, the status of the audit firm, the degree of corporate complexity, profitability, risk, corporate accounting year end and the lag between the audit report and the end of the accounting year.FindingsThe results of the analysis revealed that corporate size, status of the audit firm, industry type, degree of corporate complexity and risk are the main determinants of audit fees. However, variables such as corporate profitability, corporate accounting year‐end (YEND) and time lag between YEND and the audit report date appeared to be insignificant determinants of audit fees.Research limitations/implicationsIn order to generalize the outcome of the study, the same study needs to be conducted over a long period of time (five years). Other variables such as the market share of the audit firm and the economic conditions of the country need to be included in the regression model in future research.Originality/valueThe outcome of the study can be used by audit firms to determine audit fees. Companies' management can also use the results of the study to predict the amount of audit fees that they will pay.

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Determinants of the External Audit Fee of UK Unquoted Companies — Some New Evidence

Cited by 3 publications

References 1 publication

Determinants of Audit Fees : Evidence from UK Alternative Investment Market

Determinants of Audit Fees : Evidence from UK Alternative Investment Market

The Relationship Between Governance Structure and Audit Fees Pre‐Cadbury: some empirical findings

Determinants of audit fees: empirical evidence from an emerging economy

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