Audit quality and fees: Evidence from Spain

Raja, Isidoro Guzmán; Sánchez, Mariano González; Rúa-Alonso-De-Corrales, Enrique; Sánchez-García, Juan-Francisco

doi:10.1080/02102412.2021.1919959

Cited by 3 publications

(4 citation statements)

References 53 publications

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“…Following prior research (e.g. Lai, 2019;Salehi et al, 2020;Guzm an-Raja et al, 2021), we also replace the measurement of audit fees and audit report lag with abnormal increase in audit fees and in audit report lag. The results of these new measures of our dependent variables, untabulated, suggest that both measures of KAM disclosure have quantitatively comparable results to those in Table 4.…”

Section: Further Analysis 71 Robust Analysesmentioning

confidence: 99%

“…, 2019; Minutti-Meza, 2021). The literature reports auditors reacting to changes in accounting or auditing regulations by adjusting their effort based on the risks associated with these changes (Guzmán-Raja et al. , 2021).…”

Section: Hypothesis Developmentmentioning

confidence: 99%

“…Lai, 2019; Salehi et al. , 2020; Guzmán-Raja et al. , 2021), we also replace the measurement of audit fees and audit report lag with abnormal increase in audit fees and in audit report lag.…”

Section: Further Analysismentioning

confidence: 99%

See 2 more Smart Citations

Does KAM disclosure make a difference in emerging markets? An investigation into audit fees and report lag

Baatwah

Almoataz

Omer

et al. 2022

IJOEM

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PurposeThis study investigates the consequences of the key audit matter (KAM) disclosure requirement by considering two salient audit proxies: audit fees and audit report lag. This investigation is relevant because most auditors worldwide are required to expand their audit report including discussion on key matters faced in the audit engagement. However, the emerging literature on the implications of KAM is inconclusive.Design/methodology/approachUsing a distinctive dataset of 601 year-observations for firms listed on the Omani capital market over 2012–2019, this study employs pooled panel data regression with robust standard error.FindingsResults indicate that auditors increased their fees considerably during the period of KAM but substantially shortened audit report lag. Conversely, using the KAM period as a sample, the authors find marginal or insignificant evidence for the effect of the number of KAM on both proxies. In additional analyses, this study shows that entity-level risk KAM is associated with higher fees and shorter audit report lag, while KAM related to account-level risk does not have the same effect. Interestingly, it is observed that KAM disclosure is strongly associated with higher fees and high-quality audit even when the auditors issue their report in a shorter time.Originality/valueThis study contributes to the limited research examining the consequences of KAM in emerging markets. It is also the first to show that KAM is associated with shorter audit report lag.

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Section: Further Analysis 71 Robust Analysesmentioning

confidence: 99%

Section: Hypothesis Developmentmentioning

confidence: 99%

See 1 more Smart Citation

Does KAM disclosure make a difference in emerging markets? An investigation into audit fees and report lag

Baatwah

Almoataz

Omer

et al. 2022

IJOEM

View full text Add to dashboard Cite

show abstract

“…Despite the significant academic literature devoted to audit firm rotation and audit fees, the impact of the introduction and enforcement of a mandatory audit firm rotation regulation on audit and non-audit fees needs to be studied in greater detail. In the Spanish case, Guzmán-Raja et al (2021) analyse audit quality and audit fees in Spain from 2013-2018, but they do not analyse either the possible effects of the regulatory change on audit fees or the evolution of non-audit fees and the NAF/AF relationship due to the new regulation. Garcia-Blandon et al (2021) study the 537/2014 regulation in Spain, but conduct their empirical analyses before its actual enforcement.…”

Section: Introductionmentioning

confidence: 99%

Implementing mandatory audit firm rotation: Effects on audit and non-audit fees

Basioudis,

Cuellar-Fernández,

Garcia-Lacalle

2024

Rev. contab.

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The 2014 reform of the European Union (EU) regulation on auditing includes mandatory audit firm rotation and a significant limitation of the provision of non-audit services by the audit firm to their existing clients. This paper analyses the changes in audit fees, and non-audit fees, as well as in their proportion, when there is a switch of audit firms, before and after the new regulation. The analysis is carried out for the Spanish-listed companies from 2011 to 2018 using two types of analyses, descriptive/comparative and multivariate, panel data, and regressions. As expected, the new EU regulation has resulted in a significant increase in audit firm switches. The results show that, when there is a change of audit firm, the incoming firm offers a significant discount to the new client with the outgoing firm. This is the case before and after the reform, and for both voluntary and mandatory switches after the reform. In addition, the reform has led to a reduction of non-audit fees, which is especially evident after a voluntary audit firm switch. We conclude that audit firms seem to be willing to take on the additional cost of auditing a new company to gain clients. La reforma de la normativa de la Unión Europea sobre auditoria de 2014 incluye la rotación obligatoria de la firma de auditoría y una importante limitación de trabajos distintos de auditoria por parte del auditor. Este trabajo analiza los cambios en los honorarios de auditoría, honorarios por otros servicios, así como la proporción entre ambos, cuando se produce un cambio de firma de auditoría, antes y tras la nueva normativa europea. El análisis se realiza para las entidades cotizadas en España durante los años 2011 a 2018 mediante de dos tipos de análisis, descriptivo/estadísticos y de regresiones de datos panel. La nueva regulación ha supuesto un aumento en los cambios de firmas de auditoría. Los resultados muestran que, cuando hay un cambio de firma de auditoría, la firma entrante ofrece un descuento significativo al nuevo cliente en comparación con la firma saliente. Esto es así antes y después de la reforma y, en este último caso, tanto para cambios voluntarios como obligatorios tras la misma. La reforma ha supuesto una reducción de los honorarios por servicios distintos de auditoría, que se manifiesta especialmente después de un cambio voluntario de firma de auditoría tras la reforma. Las firmas de auditoría parecen dispuestas a asumir el coste adicional de auditar a una nueva empresa con el objetivo de ganar clientes.

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Is there a gender gap in audit fees in Spain? Explaining the variables involved in audit fees

Mareque,

Escaloni

2024

South African Journal of Accounting Research

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Audit quality and fees: Evidence from Spain

Cited by 3 publications

References 53 publications

Does KAM disclosure make a difference in emerging markets? An investigation into audit fees and report lag

Does KAM disclosure make a difference in emerging markets? An investigation into audit fees and report lag

Implementing mandatory audit firm rotation: Effects on audit and non-audit fees

Is there a gender gap in audit fees in Spain? Explaining the variables involved in audit fees

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