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Audit Committee Networks and Audit Fees: A European Analysis

Author

Listed:
  • Ruth García‐Cobo
  • César Zarza Herranz
  • Félix J. López Iturriaga

Abstract

This study investigates the association between audit committee member networks and audit fees in a sample of 225 publicly traded firms from eight European countries between 2005 and 2020. Using social network analysis, we find that director interconnections—established through overlapping board memberships—are associated with audit fees. Our findings reveal an extensive, yet fragmented director network, where higher centrality positions correlate with increased audit fees. This suggests that director connections strengthen the demand for audit effort, leading to higher audit fees. Furthermore, we show that director centrality moderates the positive relationship between firm complexity, financial risk, and board independence with audit fees.

Suggested Citation

  • Ruth García‐Cobo & César Zarza Herranz & Félix J. López Iturriaga, 2026. "Audit Committee Networks and Audit Fees: A European Analysis," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 66(2), pages 1369-1400, June.
    • Handle: RePEc:bla:acctfi:v:66:y:2026:i:2:p:1369-1400
    DOI: 10.1111/acfi.70173
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    References listed on IDEAS

    as
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