The Association between Audit Committees and Audit Fees in the Public Sector

15 Pages Posted: 13 Oct 2011

See all articles by Nives Botica Redmayne

Nives Botica Redmayne

affiliation not provided to SSRN

Michael E. Bradbury

Massey University

Steven F. Cahan

University of Auckland Business School

Date Written: November 2011

Abstract

This study examines the association between the existence of an audit committee and audit fees. We adapt the model in Griffin et al. and include an interaction term to capture possible joint countervailing effects between the audit committee and audit risk. The sample comprises New Zealand public sector entities for the period 1998–2000, when audit committee formation was voluntary. For profit‐oriented public sector entities there is a positive association between audit committees and audit fees but no significant interaction terms. For public‐benefit entities, audit committees are associated with lower audit fees and interact with audit risk. The results are consistent with audit committees being a more important mechanism for public‐benefit entities.

Keywords: audit fee, audit committee, audit risk, public sector auditing

Suggested Citation

Redmayne, Nives Botica and Bradbury, Michael E. and Cahan, Steven F., The Association between Audit Committees and Audit Fees in the Public Sector (November 2011). International Journal of Auditing, Vol. 15, Issue 3, pp. 301-315, 2011. Available at SSRN: https://ssrn.com/abstract=1943331 or http://dx.doi.org/10.1111/j.1099-1123.2011.00436.x

Nives Botica Redmayne

affiliation not provided to SSRN

No Address Available

Michael E. Bradbury (Contact Author)

Massey University ( email )

School of Accountancy
Private Bag 102 904
Auckland
New Zealand
64 9 414 0800 (Phone)
64 9 441 8133 (Fax)

Steven F. Cahan

University of Auckland Business School ( email )

Faculty of Business & Economics
Private Bag 92019
Auckland
New Zealand

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