Are joint audits associated with higher audit fees?

Paul André, Géraldine Broye, Christopher Pong, Alain Schatt

Research output: Contribution to journalArticle

Abstract

In its October 2010 Green Paper on audit policy, the European Commission suggested that joint audits might be a way of improving the audit market in Europe. However, some parties consider that a joint audit system is not an efficient solution because the perceived improvements in audit quality, if any, are not commensurate with the significant increase in audit fees. We compare audit fees paid during the years 2007–2011 by listed companies in France, where joint audits are mandatory, with those paid by British and Italian companies. Theory suggests that audit fees in countries with high investor protection, such as the UK, are likely to be greater than those in countries with lower investor protection, such as France and Italy, ceteris paribus. However, we find significantly higher audit fees in France after controlling for well-documented auditor, client, and engagement attributes, which vary across countries. Furthermore, since we do not find statistically significant differences in the magnitude of abnormal accruals, the higher audit fees observed in France do not appear to be associated with higher audit quality.

Original languageEnglish
Pages (from-to)245-274
Number of pages30
JournalEuropean Accounting Review
Volume25
Issue number2
Early online date21 Jan 2015
DOIs
StatePublished - 2016

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André, Paul; Broye, Géraldine; Pong, Christopher; Schatt, Alain / Are joint audits associated with higher audit fees?

In: European Accounting Review, Vol. 25, No. 2, 2016, p. 245-274.

Research output: Contribution to journalArticle

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André, P, Broye, G, Pong, C & Schatt, A 2016, 'Are joint audits associated with higher audit fees?' European Accounting Review, vol 25, no. 2, pp. 245-274. DOI: 10.1080/09638180.2014.998016

Are joint audits associated with higher audit fees? / André, Paul; Broye, Géraldine; Pong, Christopher; Schatt, Alain.

In: European Accounting Review, Vol. 25, No. 2, 2016, p. 245-274.

Research output: Contribution to journalArticle

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