This paper examines the audit fee structure in Bahrain for 38 companies listed on the Bahrain Stock Exchange (BSE). Data was collected from the BSE Directory and also from the listed companies. The study also provides data on the audit firms operating and listed with clients in Bahrain. Five variables, namely total assets (size), risk, complexity, timing of audit, and profitability were examined in relation to audit fees. A regression model was developed of the determinants of audit fees. The study strongly confirms that most of the previous research findings are also applicable to the Bahrain market, and that audit fees are significantly associated with the size, risk, profitability and complexity of the client operations. The model shows that 60 percent of the variation in audit fees is explained by the variation of these four factors. The importance of the non-audit services, and stability of audit fees, extent of market concentration, and audit services in the non-listed sector, are some subjects recommended for future research. This paper expands upon previous research into the market for audit services by providing a study of the market for audit services in Many studies have been conducted on the market for audit services in Anglo-Saxon countries, but, to-date, none of them have focused on the Middle Eastern countries. This paper examines the audit fee structure in Bahrain for 38 companies listed on the Bahrain Stock Exchange (BSE). By analyzing the data concerning a number of variables representing size, risk, complexity, timing of audit, and profitability, a model is developed of the determinants of audit fees. The study strongly confirms that most of the previous research findings are also applicable to the Bahrain market, and that audit fees are significantly associated with the size, risk, profitability and complexity of the client operations. The study also suggests that other important issues be considered, such as non-audit services, the extent of market concentration, and audit services in the unregulated market.
