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Audit Pricing: The Size Factor

27 Pages Posted: 19 Dec 2010 Last revised: 1 Mar 2011

Rouven Fleischer

Catholic University of Eichstaett-Ingolstadt

Max Goettsche

University of Regensburg, Faculty of Economics

Date Written: November 26, 2010


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

Fleischer, Rouven and Goettsche, Max, Audit Pricing: The Size Factor (November 26, 2010). Available at SSRN: or

Rouven Fleischer (Contact Author)

Catholic University of Eichstaett-Ingolstadt ( email )

Auf der Schanz 49
Ingolstadt, D-85049

Max Goettsche

University of Regensburg, Faculty of Economics ( email )

93040 Regensburg
D-93040 Regensburg, 93053
00499419432707 (Phone)

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