What is the Impact of Corruption on Audit Fees?

Public Money & Management

24 Pages Posted: 6 Dec 2016 Last revised: 19 Dec 2017

See all articles by Noor Houqe

Noor Houqe

School of Accountancy

Tony van Zijl

Victoria University of Wellington - Faculty of Commerce and Administration

A.K.M. Waresul Karim

Saint Mary's College of California - Graduate Business Programs

Andrew Mahoney

Independent

Date Written: September 18, 2017

Abstract

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

Houqe, Muhammad Nurul and van Zijl, Tony and Karim, A.K.M. Waresul and Mahoney, Andrew, What is the Impact of Corruption on Audit Fees? (September 18, 2017). Public Money & Management. Available at SSRN: https://ssrn.com/abstract=2880077 or http://dx.doi.org/10.2139/ssrn.2880077

Muhammad Nurul Houqe (Contact Author)

School of Accountancy ( email )

New Zealand

Tony Van Zijl

Victoria University of Wellington - Faculty of Commerce and Administration ( email )

RH 606, Pipitea Campus, 6th Floor, Rutherford Hous
23 Lambton Quay
Wellington
Australia

A.K.M. Waresul Karim

Saint Mary's College of California - Graduate Business Programs ( email )

United States

Andrew Mahoney

Independent ( email )

No Address Available
United States

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