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Audit pricing in a reformed nonprofit market

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  • Verbruggen, Sandra

    (Hogeschool-Universiteit Brussel (HUB), Belgium)

  • Christiaens, Johan

    (Ghent University, Department of Accounting and Corporate Finance)

  • Reheul, Anne-Mie

    (Hogeschool-Universiteit Brussel (HUB), Belgium)

  • Van Caneghem, Tom

    (Hogeschool-Universiteit Brussel (HUB), Belgium)

Abstract

In contrast to the extant research on audit fees of for-profit companies, literature on non-profit audit fees is scant. In this paper, audit fee determinants of previous research are tested in a nonprofit market that is characterized by a relatively low dominance of Big4 auditors, low litigation risk, small nonprofit entities, high levels of subsidization and recent legislative reforms. Using OLS on a sample of nonprofit entities, we find that some known determinants such as auditor size and client complexity hold their ground. However, our findings on client profitability and auditor specialization show that refinements of audit fee models need to incorporate audit market characteristics, agency problems and signaling.

Suggested Citation

  • Verbruggen, Sandra & Christiaens, Johan & Reheul, Anne-Mie & Van Caneghem, Tom, 2011. "Audit pricing in a reformed nonprofit market," Working Papers 2011/29, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
    • Handle: RePEc:hub:wpecon:201129
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    References listed on IDEAS

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    1. Rewczuk Karol & Modzelewski Piotr, 2019. "Determinants of audit fees: Evidence from Poland," Central European Economic Journal, Sciendo, vol. 6(53), pages 323-336, January.
    2. Abdullah AL-Mutairi & Kamal Naser & Naser Al-Enazi, 2017. "An Empirical Investigation of Factors Affecting Audit Fees: Evidence from Kuwait," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 23(3), pages 333-347, August.

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