Audit Fees: A Meta-Analysis of the Effect of Supply and Demand Attributes
Posted: 14 Nov 2005
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. The perspective provided by the meta-analysis allows us to reconsider the anomalies, mixed results and gaps in audit fee research. 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 a loss by the client and leverage, which have become significant in comparatively recent studies; internal auditing and governance, both of which have mixed results; auditor specialization, regarding which there is still some uncertainty; and the audit opinion, which was a significant variable before 1990 but not in more recent studies.
Keywords: Auditing, Audit fee research, Meta-analysis, Supply and demand attributes
JEL Classification: M40, M49, G34, L84
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