all the three years by an audit client are taken into consideration to assign an audit firm that the audit fees do not fluctuate much within a period. Tenure is a dummy variable, because a company can be only in one auditor tenure group. Because tenure is a dummy variable, TENURE3 is excluded from the model. Auditor tenure period 3 is the control group. Any significant findings for TENURE1 and TENURE2 indicate differences in the audit fees in the first or the second auditor tenure period compared to the audit fees in the third auditor tenure period. In addition, because industry is a dummy variable one industry group has to be removed to compare the audit fee of an industry group to the audit fee of the excluded industry group. The industry group BANK is excluded from the model by SPSS. Compared to a bank in the third auditor tenure period, the next regression model is developed: All the variables have the same descriptions and predicted signs as provided in chapter 5. This model does not have multicollinearity. Detailed information of the results of the regression including the multicollinearity test is provided in Appendix 4. Additional checks The last checks performed before starting the regression analysis are to check whether the third and the fourth conditions are met to generalize the results. The third condition is that the residuals are normally distributed. Normal distributed residuals indicate that the error term of the regression is zero . The standardized residuals were saved when running the regression in SPSS. The saved standardized residuals were tested for normality . Results show that the standardized residuals are normally distributed, with a P-value of Kolmogorov-Smirnov 0,200, and a P-value of Shapiro-Wilk 0,129. Finally, the fourth condition was checked. To test the homoscedasticity the standardized residuals as observed and predicted are plotted so it is able to check if no pattern is observed. Homoscedasticity indicates that the variance of the dependent variable is the same . It can be concluded that the homoscedasticity condition is met. Appendix 4 provides the results of both checks.
all the three years by an audit client are taken into consideration to assign an audit firm that the audit fees do not fluctuate much within a period. Tenure is a dummy variable, because a company can be only in one auditor tenure group. Because tenure is a dummy variable, TENURE3 is excluded from the model. Auditor tenure period 3 is the control group. Any significant findings for TENURE1 and TENURE2 indicate differences in the audit fees in the first or the second auditor tenure period compared to the audit fees in the third auditor tenure period. In addition, because industry is a dummy variable one industry group has to be removed to compare the audit fee of an industry group to the audit fee of the excluded industry group. The industry group BANK is excluded from the model by SPSS. Compared to a bank in the third auditor tenure period, the next regression model is developed: All the variables have the same descriptions and predicted signs as provided in chapter 5. This model does not have multicollinearity. Detailed information of the results of the regression including the multicollinearity test is provided in Appendix 4. Additional checks The last checks performed before starting the regression analysis are to check whether the third and the fourth conditions are met to generalize the results. The third condition is that the residuals are normally distributed. Normal distributed residuals indicate that the error term of the regression is zero . The standardized residuals were saved when running the regression in SPSS. The saved standardized residuals were tested for normality . Results show that the standardized residuals are normally distributed, with a P-value of Kolmogorov-Smirnov 0,200, and a P-value of Shapiro-Wilk 0,129. Finally, the fourth condition was checked. To test the homoscedasticity the standardized residuals as observed and predicted are plotted so it is able to check if no pattern is observed. Homoscedasticity indicates that the variance of the dependent variable is the same . It can be concluded that the homoscedasticity condition is met. Appendix 4 provides the results of both checks.