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

Posted: 14 Nov 2005

See all articles by David Hay

David Hay

University of Auckland - Business School

W. Robert Knechel

University of Florida - Fisher School of Accounting

Norman Wong

University of Auckland Business School

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. 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

Suggested Citation

Hay, David and Knechel, W. Robert and Wong, Norman, Audit Fees: A Meta-Analysis of the Effect of Supply and Demand Attributes. Contemporary Accounting Research, Vol. 23, No. 1, Spring 2006, Available at SSRN: https://ssrn.com/abstract=845147

David Hay (Contact Author)

University of Auckland - Business School ( email )

12 Grafton Rd
Auckland, 1010
New Zealand

W. Robert Knechel

University of Florida - Fisher School of Accounting ( email )

Warrington College of Business
PO Box 117166
Gainesville, FL 32611-7166
United States

Norman Wong

University of Auckland Business School ( email )

Private Bag 92019
Auckland, 1001
New Zealand
(64 9) 3737599 Ext. 87098 (Phone)
(64 9) 373 7406 (Fax)

HOME PAGE: http://www.business.auckland.ac.nz

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