“…We estimate the level of unexpected fees as the residuals of a model where auditor fees are regressed on a set of firm characteristics as indicated in the model in Equation (2). The model is derived from Fields et al (), Kanagaretnam et al (), and Campa and Donnelly () and reflects the fact that, in accordance with previous research, auditor fees are related to audit complexity ( MTB , GROWTH ), audit risk ( LOSS , RESTAT , ROA , CGSCORE ) (Ashbaugh et al, ; Firth, ), client size ( SIZE ), bank's credit risk ( SNPL , SLCO ), operating risk ( EFFICIENCY ), liquidity risk ( SECURITIES ), and capital risk ( INTANG , CAPRATIO ). It also includes country and year fixed effects.…”