Does the impact of IFRS on audit fees differ between early and late adopters?

Abstract

Purpose This study aims to examine whether the impact of international financial reporting standards (IFRS) on audit fees differs between early and late adopters. Design/methodology/approach The authors use robust econometric estimation on a sample of 314 firms from both early and late IFRS adopting countries. Findings The authors find that IFRS is positively and significantly associated with an increase in audit fees for early adopters, but the impact is very weak for late adopters and insignificant in some cases. The results on auditing time suggest that increase in audit fees around IFRS adoption is due to an increase in audit reporting lags. After accounting for pre- and post-years, the authors find that the relationship between IFRS and audit fees, as well as audit time for late adopters, is significant only in the adoption year. However, early adopters experience a significant increase in audit fees and audit time in the transition year to one-year post-adoption. Practical implications The findings imply that countries that are yet to adopt IFRS are less likely to experience a significant increase in audit fees audit time. Hence, is probable that the benefit of IFRS will outweigh the cost. Originality/value The results, therefore, suggest that early adopters paid a premium for been the first users of IFRS, which is consistent with any innovation. The study provides new insights by demonstrating that the consequences of IFRS differ between early and late adopters.

The effect of IFRS convergence on risk disclosure: an investigation into the Indian accounting system

“…Similarly, the variable AuditFee has mean values of 2.33 and 2.60 before and after IFRS convergence, respectively. These findings indicate that, on average, there is a substantial increase in the cost of equity and audit fees after IFRS convergence, which is consistent with the findings of previous research (Bansal, 2022;Tawiah, 2022). In terms of control variables, Table 2 reveals that, during the post-IFRS period, firms are generally larger in terms of size (Size), with higher stock beta (FirmBeta), return volatility (ReturnVolitility) and trading volume (Volume), more institutional ownership (InstOwn), increased sales (Sales) and a higher current ratio (CurrentRatio).…”

A bibliometric review of IFRS adoption and compliance research in Africa

“…Furthermore, they observed that Anglophone and common law African countries are more prone to adopting IFRS compared to Francophone countries. Tawiah (2022) assessed whether the effects of audit fees differ between early adopters and late adopters of IFRS. The study revealed a positive association between IFRS and increased audit fees among early adopters, while the impact on late adopters was found to be weak.…”

“…The map shows citation trends as research continues in the domain. For instance, links existed between Tawiah (2022) and Agyei-Boapeah et al (2020), Boolaky et al (2020), Coffie and Bedi (2019) and Tawiah and Boolaky (2019) representing cited papers. Tawiah (2022) focused on whether the impact of IFRS on audit fees differs between early and late adopters.…”

Türki̇ye’deki̇ Bağimsiz Deneti̇m Ücretleri̇ne İli̇şki̇n İlk Bulgular: Bi̇st-100 Şi̇rketleri̇nde Bi̇r Araştirma

“…Ülkelerdeki yasal düzenlemeler ve yeni muhasebe uygulamaları, denetim ücretlerini etkilemektedir. Örneğin; UFRS'nin ilk uygulama yıllarında denetim ücretlerinde anlamlı bir artış tespit edilirken (Shan ve Troshani, 2016;Tawiah, 2021), bu etkinin ileriki yıllarda da sürdüğü gözlemlenmiştir (El Guindy ve Trabelsi, 2020).…”