Relation between External Audit Fees, Audit Committee Characteristics and Internal Audit

18 Pages Posted: 18 Aug 2006

See all articles by Jenny Stewart

Jenny Stewart

Griffith University - Griffith Business School

Pamela Kent

University of Queensland - Business School

Abstract

This study examines whether the existence of an audit committee, audit committee characteristics and the use of internal audit are associated with higher external audit fees. Higher audit fees imply increased audit testing and higher audit quality. We find that the existence of an audit committee, more frequent committee meetings and increased use of internal audit are related to higher audit fees. The expertise of audit committee members is associated with higher audit fees when meeting frequency and independence are low. These findings are consistent with an increased demand for higher quality auditing by audit committees, and by firms that make greater use of internal audit.

Suggested Citation

Stewart, Jenny and Kent, Pamela, Relation between External Audit Fees, Audit Committee Characteristics and Internal Audit. Accounting and Finance, Vol. 46, No. 3, pp. 387-404, September 2006, Available at SSRN: https://ssrn.com/abstract=925310 or http://dx.doi.org/10.1111/j.1467-629X.2006.00174.x

Jenny Stewart (Contact Author)

Griffith University - Griffith Business School ( email )

Brisbane, Queensland 4111
Australia

Pamela Kent

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia
+016 7 3365 6611 (Phone)
+016 7 3365 6788 (Fax)

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