What is the Impact of Corruption on Audit Fees?
Public Money & Management
24 Pages Posted: 6 Dec 2016 Last revised: 19 Dec 2017
Date Written: September 18, 2017
This study examines the impact of country level corruption on audit fees. Using a sample of 102,934 firm year observations on companies from 48 countries over the period 1998-2014, we find that audit fees are positively associated with higher levels of corruption. We also find that corruption adds a significant margin to the large premium paid to BIG_4 auditors. The study opens up a new line of research and adds to the literature on the BIG_4 audit premium.
Keywords: Audit Fees, Big-4 Premium, Corruption
JEL Classification: M41, M42, M48
Suggested Citation: Suggested Citation