Auditor Selection, Ownership and Governance Structure and Audit Fees: The French Case

Abstract

Besides the size of the external auditor which is a major determinant, audit fees depend also on audit market characteristics, corporate governance and ownership. On the Basis of a sample of 130 French listed companies during the period 2004-2006, we present evidence of a « Big » auditor premium. The results highlight that the presence of a « Big » among auditors has a positive and significant effect of the level of audit fees. This impact is more important in the case of joint audit by two « Big » auditors. The choice of a « Major » auditor also increases the level of audit fees. Finally, we find that governance and ownership characteristics act in different ways on auditor’s selection involving complementarity or substitution with external audit.

Note: Downloadable document is in French.

Keywords: External auditor, Big Four, Majors, Audit fees, Governance, Ownership structure

JEL Classification: G30, M42