Research about the Correlation among Nonaudit Service Pricing, Audit Fee and Audit Independence - Coming from the Empirical Data in the Stock Market of China

Abstract

People have paid close attention to the correlation among nonaudit service pricing, audit fee and audit independence. Taking listed companies (issuing A share) that disclosed audit fee and nonaudit fee in annual report during the period from 2001 to 2004 as the object of study, and using audit opinion and tenure as the substitution variables of audit independence, we firstly approach the correlation among nonaudit service pricing, audit fee and audit independence. The conclusion of empirical research shows: the significantly positive correlation between audit fee and nonaudit fee, the negative correlation between nonaudit fee and audit tenure, and the positive correlation between nonaudit fee and standard audit opinion which have no statistical significance. No evidence shows that audit independence has the significant effect on nonaudit service pricing.