Determinants of Audit fees in a Developing Economy: Evidence from Ghana
Journal Title: International Journal of Academic Research in Business and Social Sciences - Year 2017, Vol 7, Issue 11
Abstract
Audit fee studies, being a tool to assist negotiation between auditors and clients are regularly undertaken all over the world and essentially stem on the factors prevalent in the specific auditing/accounting environments. The purpose of the study was to examine the determinant of audit fee with empirical evidence from the Ghana stock exchange. Specifically, the study examined audit fee determinant which included the client size, profitability measured by ROA, LOSS, client risk measured by debt ratio, YEAR (season) and MNC. Using the Simunic (1980) model, this study reveals that client’s size of business, international recognition, affiliation of audit firms (Big four firms) and profitability are significant determinants of audit fee in Ghana. Results in study indicate that ignorance of risk factor by the auditors may pose serious threat to fame and reputation of audit firm along with indication of feeble legal regime in Ghana. The results of the study have significant implications for auditors and firms in negotiating audit fees in Ghana. The results of this study is unique as it is the first study that comprehensively examines determinants of audit fees on listed firms in Ghana
Authors and Affiliations
Alhassan Musah
Keywords
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- EP ID EP623841
- DOI 10.6007/IJARBSS/v7-i11/3510
- Views 148
- Downloads 0
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