Abstract
The Sarbanes-Oxley Act of 2002 (SOX) permits the provision of tax services by auditors and restricts other major non-audit services previously provided by auditors for their audit clients. This paper examines the relation between auditor-provided tax fees and audit fees after SOX. The results, using a tax fee model and an audit fee model with a larger set of non-overlapping independent variables in both models, show a positive relationship between tax and audit fees, after controlling for factors that could drive both fees. An additional test shows that firms that employ (do not employ) their incumbent auditors also for tax service are likely to pay higher (lower) audit fees than in the case when they only (also) employ their auditors for audit service. The results of other tests are also consistent with the suggestion that auditors cross-sell their non-audit services to their audit clients.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
