An Analysis of the Development of Audit Fees in Malta

Peter J Baldacchino and Justin Borg

The IUP Journal of Accounting Research and Audit Practices, 2014, vol. XIII, issue 2, 27-52

Abstract: This paper seeks to assess the development of the pricing of statutory audits in Malta over time, with a view of changes in its determinants, the Global Financial Crisis (GFC) and other potentially significant events. The findings reveal that there seems to be a general difficulty in realigning the audit fee in response to variations in its drivers, with a degree of price rigidity or stickiness being attributed to elements of imperfect competition and imperfect information in the market. The study also suggests the prevalence of implicit contracts between audit firms other than the Big 4 and their audit clients in order to mitigate the increase in audit fees expected since the recent GFC from 2008. Such behavior needs to be studied more deeply to understand its pervasiveness across other microstates.

Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjar:v:13:y:2014:i:2:p:27-52

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