Audit, Non-Audit and Information Technology Fees: Some Empirical Evidence

20 Pages Posted: 16 Apr 2001

See all articles by Lawrence J. Abbott

Lawrence J. Abbott

University of Memphis

Susan Parker

Santa Clara University

Gary F. Peters

University of Arkansas at Fayetteville

Dasaratha V. Rama

Florida International University (FIU)

Date Written: April 2001


This study examines the purchase of non-audit services by SEC audit clients. Effective February 5, 2001, the SEC has required the disclosure and description of audit, non-audit and information technology fees paid to the incumbent auditor. The SEC enacted this rule due to concerns over auditor independence. Our study reviews these disclosed fees contained in the proxy statements of 265 firms since the effective date of the new SEC disclosure rules. The results indicate that the actual incidence and magnitude of non-audit fees is much greater than the information relied upon during the SEC rulemaking deliberations. Consequently, our study calls into question the data used during SEC rule-making process, as well as the clarity of the current audit and non-audit service distinctions. Our results also suggest that the non-audit service landscape has changed dramatically since the last period of publicly available audit fee data (1978-1981). Finally, our results indicate a need for additional research regarding the provision of non-audit services.

Keywords: Audit fees; Non-audit fees; Disclosure

JEL Classification: M40, M49, G18

Suggested Citation

Abbott, Lawrence J. and Parker, Susan and Peters, Gary F. and Rama, Dasaratha, Audit, Non-Audit and Information Technology Fees: Some Empirical Evidence (April 2001). Available at SSRN: or

Lawrence J. Abbott (Contact Author)

University of Memphis ( email )

Department of Accounting
Memphis, TN 38152
United States
901-678-4576 (Phone)
901-678-2685 (Fax)

Susan Parker

Santa Clara University ( email )

Leavey School of Business 500 El Camino Real
Santa Clara, CA 95053
United States
(408) 554-4899 (Phone)
(408) 554-5193 (Fax)

Gary F. Peters

University of Arkansas at Fayetteville ( email )

Sam M. Walton College of Business
Department of Accounting
Fayetteville, AR 72701

Dasaratha Rama

Florida International University (FIU) ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

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