Literature Review on Influencing Factors of Audit Fees

Xin Ye

doi:10.4236/me.2020.112022

Abstract

Audit fee refers to the remuneration obtained by accounting firms and auditors for providing professional services. The determination of audit fees requires mutual consultation between audited units and accounting firms. In order to ensure the quality of the audit report, as an important part of the auditor incentive mechanism, the establishment of reasonable audit fees is a necessary condition to ensure that the certified public accountants perform the normal information assurance function and ensure the effective operation of the audit work. Audit fee is the price of audit report. As the supplier of audit report and the demander of audit report, the relationship between supply and demand of both parties will inevitably affect audit fee. Therefore, this paper mainly from two aspects—from the perspective of accounting firms to investigate the impact of audit fees and the impact of customers’ perspective on audit fees to sort out the relevant literature on audit fees in these two aspects, hoping to provide reference value for the study of audit fees.

Highlights

Audit fee refers to the remuneration obtained by accounting firms and auditors for providing professional services
In order to ensure the quality of the audit report, as an important part of the auditor incentive mechanism, the establishment of reasonable audit fees is a necessary condition to ensure that the certified public accountants perform the normal information assurance function and ensure the effective operation of the audit work
Liu et al take the data of Listed Companies in Shanghai and Shenzhen in 2001 as the research object, and find that there is no significant difference between large-scale accounting firms in China and small-scale accounting firms in charging audit fees, which is not the same as the results of foreign research, and draw the conclusion that the audit provided by large-scale accounting firms in China The audit quality is not necessarily better than that provided by local small-scale accounting firms (Liu, Ye, & Liao, 2003)

Summary

Introduction

Audit fee refers to the remuneration obtained by accounting firms and auditors for providing professional services. The determination of audit cost requires mutual consultation between the audited unit and the accounting firm. In order to ensure the quality of the audit report, as an important part of the auditor incentive mechanism, the establishment of reasonable audit fees is a necessary condition to ensure that the certified public accountants perform the normal information assurance function and ensure the effective operation of the audit work. Scientific and reasonable audit fees can encourage auditors to cor-

Ye DOI

The Impact of Accounting Firms on Audit Fees

The Impact of Customers on Audit Fees

Findings

Conclusion