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The Provision of Non-audit Services and the Pricing of Audit Fees


  • Michael Firth

    (Lingnan College, Hong Kong)


There have been a number of studies examining audit fees and this research has covered various nations. Recent legislation in Norway requires a company to disclose information on the audit fee and the fees for non-audit services paid to its auditor. Using this data, models of audit fee structure are developed. As with other studies, the size of the company is a major determinant of the audit fee. Payments for non-audit services are positively and significantly associated with audit fees; this relationship is difficult to explain although it parallels some research in the United States. Overall, the models explain about 75 per cent of the variability in audit fees. Copyright Blackwell Publishers Ltd 1997.

Suggested Citation

  • Michael Firth, 1997. "The Provision of Non-audit Services and the Pricing of Audit Fees," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 24(3), pages 511-525.
  • Handle: RePEc:bla:jbfnac:v:24:y:1997-04:i:3:p:511-525

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    References listed on IDEAS

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    Cited by:

    1. Noel O'Sullivan, 2000. "The Determinants of Non-Executive Representation on the Boards of Large UK Companies," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 4(4), pages 283-297, December.
    2. Mark Clatworthy & Michael Peel, 2016. "The Timeliness of UK Private Company Financial Reporting: Regulatory and Economic Influences," Bristol Accounting and Finance Discussion Papers 16/3, School of Economics, Finance, and Management, University of Bristol, UK.
    3. Ball, Ray & Jayaraman, Sudarshan & Shivakumar, Lakshmanan, 2012. "Audited financial reporting and voluntary disclosure as complements: A test of the Confirmation Hypothesis," Journal of Accounting and Economics, Elsevier, vol. 53(1), pages 136-166.
    4. repec:kap:iaecre:v:23:y:2017:i:3:d:10.1007_s11294-017-9649-5 is not listed on IDEAS
    5. Arrunada, Benito, 1999. "The provision of non-audit services by auditors let the market evolve and decide," International Review of Law and Economics, Elsevier, vol. 19(4), pages 513-531, December.
    6. Thomas G. Calderon, 2008. "Determinants of client-initiated and auditor-initiated auditor changes," Managerial Auditing Journal, Emerald Group Publishing, vol. 23(1), pages 4-25, January.
    7. Noel O'Sullivan, 1999. "Board characteristics and audit pricing post-Cadbury: a research note," European Accounting Review, Taylor & Francis Journals, vol. 8(2), pages 253-263.
    8. Seetharaman, Ananth & Gul, Ferdinand A. & Lynn, Stephen G., 2002. "Litigation risk and audit fees: evidence from UK firms cross-listed on US markets," Journal of Accounting and Economics, Elsevier, vol. 33(1), pages 91-115, February.
    9. Segun Idowu Adeniyi, 2015. "The Effect of Audit Fees on Auditors Negligence," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 11(3), pages 120-126, June.
    10. Ilias G. Basioudis & Evangelos Papakonstantinou & Marshall A. Geiger, 2008. "Audit Fees, Non-Audit Fees and Auditor Going-Concern Reporting Decisions in the United Kingdom," Abacus, Accounting Foundation, University of Sydney, vol. 44(3), pages 284-309.
    11. Bremert, Michael & Voeller, Dennis & Zein, Nicole, 2007. "Interdependencies between Elements of Governance and Auditing : Evidence from Germany," Papers 07-76, Sonderforschungsbreich 504.
    12. repec:hur:ijarbs:v:7:y:2017:i:11:p:716-730 is not listed on IDEAS
    13. L. Van De Velde & I. De Beelde, 2009. "Audit- and non-audit fees and company characteristics in Belgium," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 09/589, Ghent University, Faculty of Economics and Business Administration.
    14. Sophie Audousset-Coulier, 2006. "L'influence du gouvernement d'entreprise et du co-commissariat aux comptes sur la détermination des honoraires d'audit des sociétés cotées françaises," Post-Print halshs-00548082, HAL.
    15. Niemi, Lasse, 2005. "Audit effort and fees under concentrated client ownership: Evidence from four international audit firms," The International Journal of Accounting, Elsevier, vol. 40(4), pages 303-323.
    16. Nathalie Gonthier-Besacier & Alain Schatt, 2006. "Determinants of Audit Fees for French Quoted Firms," Working Papers CREGO 1060301, Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations.

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