IDEAS home Printed from https://ideas.repec.org/p/hhs/sdueko/2010_003.html
   My bibliography  Save this paper

Audit fees and IFRS accounting - Is information costly?

Author

Listed:

Abstract

Since 2005 companies with equity instruments traded on regulated markets in the European Economic Area have prepared their financial reports in accordance with accounting standards issued by the IASB. A survey conducted in 2007 indicated that most of the EU companies that changed from local to IFRS rules incurred additional costs in connection with the transition. Also, companies expected additional future costs from using IFRS. Although the main part of these stemmed from the companies’ internal work on IFRS statements, additional costs for external auditing and other external services were identified as substantial but independent of company size. We analyze whether the application of IFRS standards has increased Danish companies’ cost of auditing. Our study is based on a sample of financial reports from large Danish companies from 2002 to 2008. Controlling for a number of general audit fee driving aspects, we find that overall, audit fees have not increased significantly for companies using IFRS rules. However, when combining IFRS with company size and complexity, we find that large and complex companies using IFRS pay a heavy audit fee premium compared to small and less complex companies that also use IFRS. Our results for nonaudit fees are less conclusive.

Suggested Citation

  • Friis, Ole & Nielsen, Mogens, 2010. "Audit fees and IFRS accounting - Is information costly?," Discussion Papers of Business and Economics 3/2010, University of Southern Denmark, Department of Business and Economics.
  • Handle: RePEc:hhs:sdueko:2010_003
    as

    Download full text from publisher

    File URL: https://www.sdu.dk/-/media/files/om_sdu/institutter/ivoe/disc_papers/disc_2010/dpbe3_2010.pdf
    File Function: Full text
    Download Restriction: no

    More about this item

    Keywords

    Audit fees; non audit fees; IFRS; transition of accounting regime; empirical study;

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

    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:hhs:sdueko:2010_003. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lene Holbæk). General contact details of provider: http://edirc.repec.org/data/okioudk.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.