smaller firms. 2005 Lyon & Bribery scandals attract 82 companies Regression Auditors do allege Maher widespread media registered with model corporate misconduct attention and may harm the SEC in the as risky business, and the reputation of the U.S. in 1974 ask them for a higher audit firm. To cover audit fee, even though themselves in this the misconduct is not situation, auditors may illegal and does not need to spare more cause any financial efforts in their audit to misstatements. ensure their opinions about the company are correct. This consequently will drive up the audit fee. 2007 Carson & To test the assumption 1712 firm-years Regression The clients located in Fargher that larger clients between 1994 model the upper quintiles usually require more and 2004 from regarding to firm size specialists to complete Australia requires a significant an audit engagement obtained from higher audit fee. One consequently increase Who Audits explanation presented the audit fee since Australia by the authors was that previous studies have database. since their auditors are showed that a designated the industry specialization increases specialist larger clients the premium charged. are charged with a higher fee. Consequently, the result was in conformity with the prediction that the audit fees are positively correlated with the audit client size. 2013 Bills, Jeter, To confirm that auditor 23852 firm-year Regression Industry specialist & Stein industry specialization observation model requires a fee premium could lead to a decrease between fiscal for clients from in audit fee. years 2004 and 2009 industries, but charged an incrementally lower fee to clients from homogenous industries.
smaller firms. 2005 Lyon & Maher Bribery scandals attract widespread media attention and may harm the reputation of the audit firm. To cover themselves in this situation, auditors may need to spare more efforts in their audit to ensure their opinions about the company are correct. This consequently will drive up the audit fee. 82 companies registered with the SEC in the U.S. in 1974 Regression model Auditors do allege corporate misconduct as risky business, and ask them for a higher audit fee, even though the misconduct is not illegal and does not cause any financial misstatements. 2007 Carson & Fargher To test the assumption that larger clients usually require more specialists to complete an audit engagement consequently increase the audit fee since previous studies have showed that a specialization increases the premium charged. 1712 firm-years between 1994 and 2004 from Australia obtained from Who Audits Australia database. Regression model The clients located in the upper quintiles regarding to firm size requires a significant higher audit fee. One explanation presented by the authors was that since their auditors are designated the industry specialist larger clients are charged with a higher fee. Consequently, the result was in conformity with the prediction that the audit fees are positively correlated with the audit client size. 2013 Bills, Jeter, & Stein To confirm that auditor industry specialization could lead to a decrease in audit fee. 23852 firm-year observation between fiscal years 2004 and 2009 Regression model Industry specialist requires a fee premium for clients from industries, but charged an incrementally lower fee to clients from homogenous industries.