Further Evidence from Meta-Analysis of Audit Fee Research

Abstract

This paper examines the accumulated weight of evidence in audit fee research. Research on factors related to audit fees has become more widespread in recent years, and there was a considerable upsurge in audit fee papers published subsequent to the data used in a recent meta-analysis. In this paper I use meta-analysis to accumulate statistical results from more recent published studies as well as the earlier studies and revisit the overall conclusions about the issues that are examined in audit fee research. The addition of audit fee studies from the more recent period shows that there is now evidence that audit fees are positively associated with internal control and with corporate governance. Evidence from previous studies regarding the audit fee premiums for Big 4 firms and industry specialist auditors, and about the positive relationship between non-audit services and audit fees is reinforced, although in each case there are issues regarding the underlying research that need to be addressed in future studies. The analysis also shows that longer audit tenure is associated with higher fees. The paper concludes with suggestions for future research.