The Big Four Premium: Are Audit Fees a Matter of Size, Reputation, or Complexity?
Emmanouil Taxiarchis Gazilas (),
Nicholas Belesis and
Christos Kampouris
MPRA Paper from University Library of Munich, Germany
Abstract:
With an emphasis on the influence of Big Four auditors in the US between 2000 and 2024, this paper explores the factors that influence audit fees and associated non-audit fees. We examine trends in audit, tax-related, and miscellaneous fees using a dataset that includes 1,187 auditors and 13,822 distinct entities across 1,315 sectors. In order to determine if the Big Four auditors—Deloitte, PwC, EY, and KPMG—command a higher cost for their services, we examine how firm-specific factors like revenue, assets, book value, and earnings affect fee structures. This study looks at both linear and non-linear associations using advanced econometric methods, such as multiple regression analysis and non-parametric Wilcoxon rank-sum tests. It additionally incorporates interaction variables to account for differences between Big Four and non-Big Four auditors. The findings reveal that companies audited by Big Four auditors pay significantly more, which is symptomatic of their perceived market dominance and audit quality. While non-audit fees demonstrate clear trends impacted by auditor type, larger businesses with higher revenues and assets are also linked to higher rates.
Keywords: Audit Fees; Big Four Auditors; Audit Quality; Corporate Governance; United States of America. (search for similar items in EconPapers)
JEL-codes: M41 M42 (search for similar items in EconPapers)
Date: 2025-01
New Economics Papers: this item is included in nep-acc and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/123383/1/MPRA_paper_123383.pdf original version (application/pdf)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:123383
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().