IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2311.08250.html
   My bibliography  Save this paper

Audit fees in auditor switching

Author

Listed:
  • Sarit Agami

Abstract

The auditor work is examining that a company's financial statements faithfully reflect its financial situation. His wage, the audit fees, are not fixed among all companies, but can be affected by the financial and structural characteristics of the company, as well as the characteristics of the firm he belongs to. Another factor that may affect his wage in an auditor switching, which can be resulted from changes in the company that may influence the fees. This paper examines the effect nature of the auditor switching on his wage, and the factors of the company characteristics and the economy data which determine the wage at switching. A product of the research are tools for predicting and evaluating the auditor wage at switching. These tools are important for the auditor himself, but also for the company manager to correctly determine the wage due to the possibility that the quality of the audit work depends on its fees. Two main results are obtained. First, the direction of the wage change in the switching year depends on the economic stability of the economy. Second, the switching effect on the direction and the change size in wage depends on the change size in the company characteristics before and after switching - a large change versus a stable one. We get that forecasting the change size in wage for companies with a larger change is their characteristics is paralleled to forecasting a wage increasing. And vice versa, forecasting the change size in wage for companies with a stable change in their characteristics is paralleled to forecasting a wage decreasing. But, whereas the former can be achieved based on the company characteristics and macroeconomics factors, the predictably of these characteristics and factors is negligible for the letter.

Suggested Citation

  • Sarit Agami, 2023. "Audit fees in auditor switching," Papers 2311.08250, arXiv.org.
    • Handle: RePEc:arx:papers:2311.08250
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2311.08250
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kamal Naser & Yousef Mohammad Hassan, 2016. "Factors influencing external audit fees of companies listed on Dubai Financial Market," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 9(3), pages 346-363, August.
    2. Johnson, W. Bruce & Lys, Thomas, 1990. "The market for audit services : Evidence from voluntary auditor changes," Journal of Accounting and Economics, Elsevier, vol. 12(1-3), pages 281-308, January.
    3. Maretno Agus Harjoto & Indrarini Laksmana & Robert Lee, 2015. "The impact of demographic characteristics of CEOs and directors on audit fees and audit delay," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 30(8/9), pages 963-997, October.
    4. Kamal Naser & Yousef Mohammad Hassan, 2016. "Factors influencing external audit fees of companies listed on Dubai Financial Market," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 9(3), pages 346-363, August.
    5. Ruth O. Urhoghide Ph.D & Prof. F. O. I. Izedonmi, 2015. "An Empirical Investigation of Audit Fee Determinants in Nigeria," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 5(8), pages 48-58, August.
    6. Alhassan Musah, 2017. "Determinants of Audit fees in a Developing Economy: Evidence from Ghana," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(11), pages 716-730, November.
    7. Ruth O. Urhoghide Ph.D & Prof. F. O. I. Izedonmi, 2015. "An Empirical Investigation of Audit Fee Determinants in Nigeria," International Journal of Business and Social Research, LAR Center Press, vol. 5(8), pages 48-58, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Roselyn Afor, Haruna, & Awogbade, Adefisayo, & Karimu Moses, Ibrahim,, 2021. "Forensic Accounting Techniques And Fraud Prevention In Listed Insurance Companies In Nigeria," Journal of Forensic Accounting & Fraud Investigation (JFAFI), Association of Forensic Accounting Researchers (AFAR), vol. 6(1), pages 56-82, January-J.
    2. Osaro Favour , Atu Osaro Favour & Osahenoma Wisdom, Atu, & Sandra Ese, Atu, 2021. "Effect Of Firm Size In Corporate Social Responsibility In Nigeria," Journal of Forensic Accounting & Fraud Investigation (JFAFI), Association of Forensic Accounting Researchers (AFAR), vol. 6(1), pages 121-135, January-J.
    3. Roselyn Afor, Haruna & Akwu-Odo Salihu , Aruwa Suleiman & Eni-Itan Titilayo, Fowokan & Karimu Moses, Ibrahim, 2021. "Forensic Accounting Techniques And Fraudulent Practices In Nigerian Public Sector," Journal of Forensic Accounting & Fraud Investigation (JFAFI), Association of Forensic Accounting Researchers (AFAR), vol. 6(1), pages 1-22, January-J.
    4. Samuel Chukwuka , Aliagu, & Osaretin Kingsley, Atu, Omimi-Ejoor & Uzochukwuamaka, Aliagu, & Sandra Ese, Atu, 2021. "Corporate Governance And Ethical Tax Behaviour: A Discuss," Journal of Forensic Accounting & Fraud Investigation (JFAFI), Association of Forensic Accounting Researchers (AFAR), vol. 6(1), pages 155-168, January-J.
    5. Nze Kingsley , Ashibogwu, & Rasheed Olawale, Olawoyin,, 2021. "Forensic Accounting Techniques: Tools For Fraud Mitigation," Journal of Forensic Accounting & Fraud Investigation (JFAFI), Association of Forensic Accounting Researchers (AFAR), vol. 6(1), pages 23-35, January-J.
    6. Bright Inuaghata , Omoruyi, & Josiah, Mary, & Jim Onaiwu, Uzamere,, 2021. "Determinants Of Corporate Tax Aggressiveness In Nigeria Manufacturing Sector," Journal of Forensic Accounting & Fraud Investigation (JFAFI), Association of Forensic Accounting Researchers (AFAR), vol. 6(1), pages 192-209, January -.
    7. Samson Adebolu, Adegbite, & Rebecca Deborah, Benjamin, & Patrick, Enyi, Prof. Enyi,, 2021. "Application Of Ethical Culture As Forensic Accounting Tool For Fraud Prevention And Detection In Public Universities In South West Nigeria," Journal of Forensic Accounting & Fraud Investigation (JFAFI), Association of Forensic Accounting Researchers (AFAR), vol. 6(1), pages 36-55, January-J.
    8. Ogheneovo Helen, Ovedje, & Josiah , Mary, & Tessy Ejuno, Egot,, 2021. "Auditor-Client Relationship And Audit Quality: Evidence From Publicly Quoted Nigeria Companies," Journal of Forensic Accounting & Fraud Investigation (JFAFI), Association of Forensic Accounting Researchers (AFAR), vol. 6(1), pages 230-246, January -.
    9. Bala Zakari, Yakubu, & Godwin Emmanuel, Oyedokun,, 2021. "Enhancing Public Confidence In Audit Report Of Listed Companies In Nigeria Through Forensic Audit," Journal of Forensic Accounting & Fraud Investigation (JFAFI), Association of Forensic Accounting Researchers (AFAR), vol. 6(1), pages 83-103, January-J.
    10. Rachael Modupe Gbadamosi & Ezekiel Alade, 2024. "Auditors’ Characteristics and Timeliness of Listed Family-Owned Firms in Nigeria," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 23(1), pages 215-236, January.
    11. E. A. Onatuyeh & I. Ukolobi, 2020. "Tax Aggressiveness, Corporate Governance and Audit Fees: A Study of Listed Firms in Nigeria," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(6), pages 278-295, December.
    12. Lawal , Sagir & Suleiman Ilu , Alawiyya & Musibau Lanre, Olasukanmi, 2021. "Political And Environmental Factors As Determinants Of The Applicability Of Forensic Accounting In Northwestern States Of Nigeria," Journal of Forensic Accounting & Fraud Investigation (JFAFI), Association of Forensic Accounting Researchers (AFAR), vol. 6(1), pages 210-229, January-J.
    13. Efosa Collins , Atu, & Innocent Sunny, Agbo, & Osaro Favour, Atu,, 2021. "Evaluating Acccounting And Auditing Services For Non-Profit Making Organization In Benin City, Edo State," Journal of Forensic Accounting & Fraud Investigation (JFAFI), Association of Forensic Accounting Researchers (AFAR), vol. 6(1), pages 136-154, January-J.
    14. Promise Akor, Ordu, & Unity Natarman, Abowei-Afagha,, 2021. "Forensic Accounting, Electronic Accounting And Fraud Checkmating By Financial Professionals: A Critical Review," Journal of Forensic Accounting & Fraud Investigation (JFAFI), Association of Forensic Accounting Researchers (AFAR), vol. 6(1), pages 104-120, January-J.
    15. Uyi Augustine , Igbineweka, & E. Ozele , Clement, & Osahenoma Wisdom, Atu,, 2021. "A Pre And Post Ifrs Analysis Of Corporate Governance And Firm Performance In Nigeria," Journal of Forensic Accounting & Fraud Investigation (JFAFI), Association of Forensic Accounting Researchers (AFAR), vol. 6(1), pages 169-191, January-J.
    16. Sellers, R. Drew & Fogarty, Timothy J. & Jadallah, Jadallah, 2020. "Has the new world order taught the big four to manage client portfolio risk? Examining extreme loss occurrences before and after Sarbanes Oxley," Advances in accounting, Elsevier, vol. 51(C).
    17. Kristian D. Allee & Daniel D. Wangerin, 2018. "Auditor monitoring and verification in financial contracts: evidence from earnouts and SFAS 141(R)," Review of Accounting Studies, Springer, vol. 23(4), pages 1629-1664, December.
    18. Pan, Yue & Shroff, Nemit & Zhang, Pengdong, 2023. "The dark side of audit market competition," Journal of Accounting and Economics, Elsevier, vol. 75(1).
    19. Panagiotis Dimitropoulos, 2016. "Audit Selection in the European Football Industry under Union of European Football Associations Financial Fair Play," International Journal of Economics and Financial Issues, Econjournals, vol. 6(3), pages 901-906.
    20. Benoît Pigé, 2000. "Audit quality and Corporate governance : an analysis of French audit regulations [Qualité de l'audit et gouvernement d'entreprise : le rôle et les limites de la concurrence sur le marché de l'audit," Post-Print halshs-03425760, HAL.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2311.08250. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.