Audit fee research David Hay Professor of Auditing University of Auckland
David Hay Professor of Auditing, University of Auckland, New Zealand
Overview and findings Level of audit fees Size of fees and dependence Ratio of non-audit to audit fees Audit services by firms that have non-audit service business And Perspectives of stakeholders Processes implemented by firms
Project timeline 2 Jun 11 Jul 12 Aug 7 Sept 29 Sept 5 Oct 7 Nov 12 Dec
Issue 1: Level of audit fees Level of audit fees for individual audit engagements Includes Level: The overall level of fees or fee increases in a country Share: Market share of audit firms in a country Determinants: Analysis of factors impacting audit fees
Issue 2: Relative size of fees and dependence Important clients: more work, better quality Important clients: risk of loss of independence Evidence of both effects depending on time and place Partner income is related to clients gained or lost, audit failures
Issue 3: Ratio of non-audit to audit fees Extensive audit fee research Earlier: Frankel et al. (2002) study showed concerns Other studies challenged Frankel et al. (2002) More current studies show some concerns
Issue 4: Audit services by firms that have non-audit service business Issues why companies purchase NAS (instead of using in-house management) why companies purchase NAS from their auditors Not widely examined
Summary Issues: Uncertainties: Competition NAS and audit quality NAS and independence in appearance Uncertainties: High fees and dependence Firms that have non-audit service businesses
Summary table