Audit fees, Non-audit fees and Coporate Performance

Cinderela Andrade dos Santos (), António Cerqueira () and Elísio Brandão ()
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Cinderela Andrade dos Santos: FEP-UP, School of Economics and Management, University of Porto
António Cerqueira: FEP-UP, School of Economics and Management, University of Porto
Elísio Brandão: FEP-UP, School of Economics and Management, University of Porto

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: Our research examines whether audit and non-audit fees are associated with firm performance, so, we study this relationship taking into account the impact of operating and corporate governance characteristics on firm performance. The sample in study is non-financial firms in S&P 500 covering the period from 2002 to 2014. We find a significant negative relationship between corporate performance and non-audit fees. This suggests that the increase (decrease) in corporate performance is related to the decrease (increase) in non-audit fees. The results add to the growing body of literature documenting relations between firm performance and remuneration of audit services, as well as to our understanding of the determinants of corporate performance. Furthermore, this study highlights the possible matter of providing non-audit services jointly with audit services, confine the functions of an auditor and consequently compromise the independence, that ultimately decrease the firm performance.

Keywords: Audit Fees; Non-Audit Fees; Corporate Performance; Corporate Governance (search for similar items in EconPapers)
JEL-codes: G30 M42 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2016-02
New Economics Papers: this item is included in nep-acc, nep-bec and nep-cfn
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Persistent link: https://EconPapers.repec.org/RePEc:por:fepwps:570

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