Audit Fees: A Meta-Analysis of the Effect of Supply and Demand Attributes

Abstract

We evaluate and summarize the large body of audit fee research, and use meta-analysis to test the combined effect of the most commonly used independent variables. We find that, while many independent variables have very consistent results, there are also several where there is no clear pattern to the results and others where significant results have been found only in certain periods or particular countries. These variables include leverage and the audit opinion. The perspective provided by the meta-analysis allows us to reconsider the anomalies, mixed results and gaps in audit fee research. We suggest that research into the effects on audit fees of company ownership, internal control, governance, auditor quality, and non-audit services is necessary.

Keywords: Auditing, audit fees

JEL Classification: M49, G34