Audit Pricing: The Size Factor
27 Pages Posted: 19 Dec 2010 Last revised: 1 Mar 2011
Date Written: November 26, 2010
Abstract
Based on data from the German market, this study aims at adding further findings to international research in the field of audit pricing, which so far was mainly focused on the US and Australasian market. First, for Germany we can affirm past research that Big4 auditors earn a premium over other auditors. We can also affirm that providing non-audit services has a positive influence on the audit fees. Beyond these results, we can show that the market leader of our sample, KPMG, can even earn an audit fee premium over the remaining Big4 auditors. We can prove a positive effect of non-audit services on audit fees for Big4 audits only. Furthermore, we can show a significant influence of risk variables such as leverage or past losses for the small audit clients in our sample only. Finally, this study shows that using the logarithm of the number of employees instead of the logarithm of total assets is a good proxy for company size.
Keywords: Audit Fees, Company Size, Auditor Size
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Relation between Auditors' Fees for Non-Audit Services and Earnings Management
By Richard M. Frankel, Marilyn F. Johnson, ...
-
Do Non-Audit Service Fees Impair Auditor Independence? Evidence from Going-Concern Audit Opinions
By Mark L. Defond, Kannan Raghunandan, ...
-
By Rick Antle, Paul A. Griffin, ...
-
Evidence on the Joint Determination of Audit and Non-Audit Services
-
The Joint Determination of Audit Fees, Non-Audit Fees, And Abnormal Accruals
By Rick Antle, Elizabeth A. Gordon, ...
-
The Jointness of Audit Fees and Demand for MAS: A Self-Selection Analysis
-
Engagement Planning, Bid Pricing, and Client Response in the Market for Initial Attest Engagements
By Karla M. Zehms and Jean C. Bedard
-
Disclosure of Fees Paid to Auditors and the Market Valuation of Earnings Surprises
By Jere R. Francis and Bin Ke
-
Non-Audit Services and Earnings Conservatism: Is Auditor Independence Impaired?
By Caitlin M. S. Ruddock, Sarah J. Taylor, ...