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Determinants of Audit Fees among Public Listed Companies in Malaysia. A Theoretical Model

Kogilavani Apadore () and Thanaletchumi R. Letchumanan ()

International Journal of Academic Research in Accounting, Finance and Management Sciences, 2016, vol. 6, issue 2, 169-174

Abstract: The purpose of this study is to examine the determinants of audit fees among listed manufacturing companies in Malaysia. A theoretical framework was constructed to test the relationship between audit fee determinants and audit fees with the adoption of five independent variables which are profitability, corporate size, complexity, status of audit firm and audit client’s risk. The analysis is based on a sample of public listed manufacturing companies covering a time period of five years comprising of year 2009 to year 2015. Secondary data collection method will be employed in this study to obtain data from annual reports published by Bursa Malaysia. The data collected were subsequently used to analyze the relationship between the five selected independent variables and audit fees by conducting multiple regression analysis. This study is expected to provide important insights to listed manufacturing companies in Malaysia into the determinants which are significantly related to audit fees charged by the auditors and helps auditors in pricing the audit services appropriately. Besides this, regulatory bodies can use this research to regulate the practice of audit pricing. This study also contributes an improved research model that incorporates new variable (audit client risk) which is found to be significant associated with audit fees and the sample period covered will be after the implementation of GST and IFRS.

Keywords: Audit fees; profitability; organization size; Audit Client Risk; Status of Audit Firm and complexity (search for similar items in EconPapers)
Date: 2016
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Handle: RePEc:hur:ijaraf:v:6:y:2016:i:2:p:169-174