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The Provision of Non‐audit Services and the Pricing of Audit Fees

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  • Michael Firth

Abstract

There have been a number of studies examining audit fees and this research has covered various nations. Recent legislation in Norway requires a company to disclose information on the audit fee and the fees for non‐audit services paid to its auditor. Using this data, models of audit fee structure are developed. As with other studies, the size of the company is a major determinant of the audit fee. Payments for non‐audit services are positively and significantly associated with audit fees; this relationship is difficult to explain although it parallels some research in the United States. Overall, the models explain about 75 per cent of the variability in audit fees.

Suggested Citation

  • Michael Firth, 1997. "The Provision of Non‐audit Services and the Pricing of Audit Fees," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 24(3), pages 511-525, April.
    • Handle: RePEc:bla:jbfnac:v:24:y:1997:i:3:p:511-525
    DOI: 10.1111/1468-5957.00118
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    Cited by:

    1. Portilla, Yolanda, 2009. "Audit contracts and reputation," UC3M Working papers. Economics we091308, Universidad Carlos III de Madrid. Departamento de Economía.
    2. Khan, Arifur & Muttakin, Mohammad Badrul & Siddiqui, Javed, 2015. "Audit fees, auditor choice and stakeholder influence: Evidence from a family-firm dominated economy," The British Accounting Review, Elsevier, vol. 47(3), pages 304-320.
    3. Juan L. Gandía & David Huguet, 2021. "Combined Effects of Auditing and Discretionary Accruals on the Cost of Debt: Evidence From Spanish SMEs," SAGE Open, , vol. 11(4), pages 21582440211, October.
    4. Ho, Nam, 2023. "Local competition and auditors' provision of non-audit services," Advances in accounting, Elsevier, vol. 63(C).
    5. Reshma Kumari Tiwari & Jasojit Debnath, 2021. "Joint Provision of Non-audit Services to Audit Clients: Empirical Evidences from India," Vikalpa: The Journal for Decision Makers, , vol. 46(3), pages 153-165, September.
    6. Markus Widmann & Florian Follert & Matthias Wolz, 2021. "What is it going to cost? Empirical evidence from a systematic literature review of audit fee determinants," Management Review Quarterly, Springer, vol. 71(2), pages 455-489, April.
    7. Mansour Saaydah, 2021. "Factors Causing Discretionary Auditor Change in the Insurance Industry: Evidence from Jordan," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 344-362.
    8. Geiger, Marshall A. & Basioudis, Ilias G. & DeLange, Paul, 2022. "The effect of non-audit fees and industry specialization on the prevalence and accuracy of auditor’s going-concern reporting decisions," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 47(C).
    9. Juan Monterrey Mayoral & Amparo Sánchez-Segura, 2007. "Rotación y dependencia económica de los auditores: sus efectos sobre la calidad del resultado en las compañías cotizadas españolas," Investigaciones Economicas, Fundación SEPI, vol. 31(1), pages 119-159, January.
    10. Clatworthy, Mark A. & Peel, Michael J., 2016. "The timeliness of UK private company financial reporting: Regulatory and economic influences," The British Accounting Review, Elsevier, vol. 48(3), pages 297-315.

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