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An Empirical Investigation of Factors Affecting Audit Fees: Evidence from Kuwait

Author

Listed:
  • Abdullah AL-Mutairi

    (Gulf University for Science and Technology)

  • Kamal Naser

    (Kuwait Fund)

  • Naser Al-Enazi

    (Public Authority for Applied Education and Training (PAAET))

Abstract

The paper examines the perception of a sample of Kuwaiti external auditors about the importance of various factors that may affect external audit fees. A questionnaire was distributed to 100 external auditors who work for different audit firms in Kuwait. They were asked to specify the level of importance they assign to factors expected to impact external audit fees. Eighty took part in the survey (80% usable response rate). Descriptive statistics were used to identify the most important factors that determine external audit fees in Kuwait. The Mann-Whitney U test was performed to detect possible variations in the participants’ opinions. Audit fees in Kuwait are determined by the size of the audited company, type of professional services provided by the audit firm, safety of the audited company’s internal control system, and affiliation of the audit firm to big four international audit firms. Factors such as the location of the audit firm and the location of the audited company, complexity of the audited company and type of reports required to be submitted by the audit firm were the least important factors. The main contribution of this study is that it covers a unique country like Kuwait and uses primary data to identify factors affecting external audit fees. This research could assist companies listed on the Kuwait Stock Exchange in determining external audit fees. The small size of the country and the low cost of transportation made determinants of audit fees in Kuwait different than other countries.

Suggested Citation

  • Abdullah AL-Mutairi & Kamal Naser & Naser Al-Enazi, 2017. "An Empirical Investigation of Factors Affecting Audit Fees: Evidence from Kuwait," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 23(3), pages 333-347, August.
    • Handle: RePEc:kap:iaecre:v:23:y:2017:i:3:d:10.1007_s11294-017-9649-5
    DOI: 10.1007/s11294-017-9649-5
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Audit fees; Audit firms; Kuwait;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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