The Female Audit Fee Premium

Abstract:     
This study investigates the existence of a female audit fee premium. The existence of such a premium has recently been suggested on theoretical grounds and evidenced by some preliminary empirical findings. Using a large set of Belgian archival data, we find that client firms indeed pay higher audit fees (by about 7 percent) to female auditors. Importantly, our results also show that the fee premium increases from about 7 percent to about 9 percent for female auditors from Big 4 firms. This observation suggests that the existence of the premium is not being driven by differences in audit effort (which would reduce the magnitude of the effect when comparing female and male auditors from Big 4 firms). The results of this study suggest that the premium earned by female auditors is rather attributable to differences in billing rates.

Number of Pages in PDF File: 43

Keywords: audit quality, audit fees, audit engagement partner, sex, gender

JEL Classification: M42, J16

working papers series