Total Fees Research Articles

Miner competition and transaction fees

In order to maintain the function of a decentralized financial system like Bitcoin, transaction fees are offered to engage miners in the transaction confirmation process. This paper investigates the effect of miner competition on the equilibrium transaction fees. We develop a game-theoretic model with costly entry into mining activities. We find that miners may strategically assemble fewer transactions into a block to reduce total fees, and as a result, to deter entry. Equilibrium transaction fees also depend on block rewards as a rise in total fees is accompanied by a drop in rewards. Our empirical analysis supports the model’s predictions. We provide evidence on the existence of excess capacity in a block, taking into account the random confirmation process. The empirical findings demonstrate that heightened competition tends to increase the block size and total fees. Furthermore, the halving of rewards correlates to a fee hike.

Pharmacy School Affordability for Pharmacy Technicians From 2004 to 2022

ObjectiveThis study aimed to evaluate the trends in pharmacy technician wages relative to pharmacy school tuition and fees for the first professional year (P1) from 2004 to 2022, and to assess the affordability of pharmacy education for those currently employed as technicians in a pharmacy. MethodsThis observational cross-sectional study used data from the United States Bureau of Labor Statistics to calculate median disposable incomes for pharmacy technicians and the American Association of Colleges of Pharmacy Tuition Trends Database to calculate cumulative sums of P1 in-state tuition and mandatory fees for pharmacy students. The primary outcome was the national change in the tuition affordability ratio, defined as the comparison of median disposable income with median total tuition and fees for P1. Changes in the tuition affordability ratio for the most affordable programs in each state were analyzed as a secondary outcome. ResultsThe study found that from 2004 to 2022, the median disposable income of pharmacy technicians nationally increased from $20,103 to $33,255, while median P1 tuition and fees rose from $13,223 to $36,183. The median tuition affordability ratio decreased from 1.52 in the 2004–2005 academic year to 0.92 in 2022–2023, indicating a 40% reduction in affordability. State-specific analysis revealed varying affordability ratios, with only Pennsylvania and Rhode Island showing an increase in affordability. ConclusionThe study highlights a significant decline in the affordability of pharmacy education, raising concerns about the economic barriers faced by prospective pharmacy students and calling for a reevaluation of financial strategies within the field.

The Impact of the COVID-19 Pandemic on the Cost of the Urology Application Process

ObjectiveTo review the self-reported costs of urology residency applications from 2019 to 2023 and examine the impact of Society of Academic Urologists (SAU) policy changes made during the COVID-19 pandemic on these costs. MethodsData from the Texas Seeking Transparency in Applications to Residency (STAR) survey was used to evaluate costs incurred by fourth-year urology residency applicants from U.S. medical schools. Outcomes included median total cost (mTC), interview costs, application fees, and other associated costs, alongside the number of interviews offered and match outcomes. Cost comparisons among surgical specialties were made. Simple linear regression was used to identify cost drivers and cost-outcome correlations. ResultsBetween 2019 and 2023, 522 urology residency applicants responded to the survey. The adoption of virtual interviews and discontinuation of in-person away rotations in the 2020-21 cycle led to a 79% reduction in mTC and a 92% reduction in interview costs. Key cost drivers were the number of away rotations and number of applications submitted. Each incremental away rotation is associated increased cost of $1,490. In the 2020-21 cycle, urology applicants spent on average $2,000 more than their general surgery counterparts. Urology shared the position of most expensive surgical specialty with thoracic surgery and ophthalmology in the 2021-22 match cycle. ConclusionPandemic-related policy changes significantly reduced the costs of urology residency applications, helping to reduce socio-economic barriers. The critical role of away rotations in securing match success, along with their associated costs, highlights equity concerns for students from institutions without home urology programs.

Does client importance affect key audit matters reporting? New Zealand evidence

PurposeThis study aims to examine the relation between a client’s relative economic importance to its auditor and the number of key audit matters (KAMs) reported in the expanded audit report.Design/methodology/approachThe authors measure a client’s economic importance at the audit firm level as well as the audit partner level using the ratio of a client’s total fees to an auditor’s total fees earned from its listed clients and the ratio of a client’s audit fees to an auditor’s total audit fees from its listed clients. The authors estimate a multivariate regression model using a sample of New Zealand-listed company-years from 2017 to 2019.FindingsResults reveal a positive relation between client importance to auditor and the number of KAMs disclosed. Furthermore, the positive association between client importance and the number of KAMs reported is more pronounced for clients audited by the Big 4 auditors and less experienced audit partners. These findings suggest that auditors’ incentive to protect against potential losses from important client engagements outweighs any impairment to auditor independence and leads to a higher number of KAMs reported for the economically more important clients. Overall, the results suggest that auditors report KAMs strategically to mitigate engagement risks.Originality/valueThis study provides the first evidence on how client economic importance relates to the disclosure in the expanded audit report and contributes to the dialogue on auditors’ reporting of KAMs in the Asia-Pacific region.

Sources of specialist physician fee variation: Evidence from Australian health insurance claims data

This study explores the variation in specialist physician fees and examines whether the variation can be attributed to patient risk factors, variation between physicians, medical specialties, or other factors. We use health insurance claims data from a large private health insurer in Australia. Although Australia has a publicly funded health system that provides universal health coverage, about 44 % of the population holds private health insurance. Specialist physician fees in the private sector are unregulated; physicians can charge any price they want, subject to market forces.We examine the variation in fees using two price measures: total fees charged and out-of- pocket payments. We follow a two-stage method of removing the influence of patient risk factors by computing risk-adjusted prices at patient-level, and aggregating the adjusted prices over all claims made by each physician to arrive at physician-level average prices. In the second stage, we use variance-component models to analyse the variation in the physician-level average prices.We find that patient risk factors account for a small portion of the variance in fees and out-of-pocket payments. Physician-specific variation accounts for the bulk of the vari- ance. The results underscore the importance of understanding physician characteristics in formulating policy efforts to reduce fee variation.

A Fair Investment Environment: The Impact of the Shadow Economy, the Harshness of the Courts Against Corrupt Officials, Tax Pressure and Restrictions on Business

Creating a fair investment environment is crucial for economic growth and attracting domestic and foreign investors. The purpose of this study is to find out how the shadow economy, harshness of courts against corrupt officials, tax pressure, and restrictions on business affect the fair investment environment. Therefore, two economic-mathematical models are built using multiple least squares regression analysis, in which the outcome variables are: in model 1 ‒ control over corruption, which is a component of the Global Governance Index; in model 2 ‒ the European Business Association’s Investment Attractiveness Index. The composition of the factor attributes in both models is the same: Corruption Perceptions Index by Transparency International; level of shadow economy according to the Ministry of Economy of Ukraine; the number of criminal cases in courts under the article “Acceptance of an offer, promise or receipt of an undue benefit by an official” using open data from the Unified State Register of Court Decisions; total tax and fee rate, which reflects taxes and mandatory payments as a percentage of commercial profit, determined by the World Bank Group methodology; assessment of “Starting Business” by Doing Business, according to the methodology of the World Bank Group. The modeling is based on the example of Ukraine for 2012‒2022. Calculations based on Model 1 show that restrictions on business have the greatest impact on the corruption control indicator (a 10% reduction in restrictions leads to a 3-point reduction in the need to control corruption), the shadow economy and tax pressure have an average impact (a one-point increase in them will increase the level of corruption by 0.4 points). The harshness of the courts against corrupt officials has the least impact (most corruption cases in Ukraine do not reach the courts). Calculations based on Model 2 show that the complexity of starting a business exerts the greatest impact on investment attractiveness (if it decreases by 15%, investment attractiveness will increase by almost 1 unit). The average impact is exerted by the increase in the shadow economy (a 10% increase in the shadow economy leads to a rise in investment attractiveness by 0.4 units). The insignificant impact is exerted by the tax burden and judicial punishment of corrupt officials.

Poster 396: Performing Sports Medicine Procedures in Ambulatory Surgery Centers Is More Cost Effective than Hospital Outpatient Departments for Medicare Recipients

Objectives: To compare the overall cost of sports medicine procedures for Medicare beneficiaries in both ambulatory surgery centers (ASC) and hospital outpatient department (HOPD) settings. Secondary aims were to compare facility fees, surgeon fees, Medicare payments, and patient payments between ASCs and HOPDs. Methods: Publicly available data from The Centers for Medicare & Medicaid Services (CMS) was accessed via the Medicare Procedure Price Lookup Tool. Current Procedural Terminology (CPT) codes were used to identify sports medicine procedures approved for the outpatient setting by CMS. Facility fees, surgeon fees, total costs, Medicare payment, and patient payment were extracted. Descriptive statistics were used to calculate means and standard deviations. Cost differences were analyzed using Mann Whitney U tests. Results: Sixty-two CPT codes were identified. Shoulder procedures (n=25) at ASCs had lower total costs (3,622±1,156 vs 6,262±1,759; p<0.001), facility fees (2,777±1,020 vs 5,416±1,606; p<0.001), Medicare payments (2,898±928 vs 5,009±1,407 p<0.001), and patient payments (724±232 vs 1,252±352; p<0.001) compared to HOPDs. Knee procedures (n=31) at ASCs had lower total costs (4,236±2,741 vs 6,668±3,341; p=0.006), facility fees (3,408±2,507 vs 5,840±3,116; p=0.006), Medicare payments (3,389±2,193 vs 5,458±2,955; p=0.006), and patient payments (847±548 vs 1,209±429; p=0.011). Hip procedures (n=6) at ASCs had lower total costs (3,583±698 vs 6,671±1,451; p=0.025), facility fees (2,725±6689 vs 5,813±1,431; p=0.025), Medicare payments (2,866±558 vs 5,336±1,161; p=0.025), and patient payments (716±139 vs 1,333±290; p=0.025). Conclusions: Sports medicine procedures performed at ASCs for Medicare recipients were found to have overall average total cost savings of 40% compared to those performed at HOPDs (42% savings for shoulder, 36% for knee, and 46% for hip procedures). ASC use conferred lower facility fees, patient payments, and Medicare payments in all cohorts. These results inform surgeons, patients, and insurance officials of the cost-effectiveness of outpatient surgical facilities for Medicare recipients undergoing sports medicine procedures.

ANALYSIS OF THE USE ACTIVITY BASED COSTING IN DETERMINING TUITION FEES

Numerous educational institutions in Indonesia suffer financial deficits, negatively impacting educational quality. This study aims to ascertain the Tuition Fees at Nurul Fajri Islamic Boarding School Majalengka utilizing the Activity-Based Costing (ABC) method. It investigates the application of the ABC method in determining Tuition Fees within educational foundation institutions, a novel approach, particularly for pesantren foundations. The research adopts a qualitative methodology with a problem-focused approach. Data collection involved interviews and an analysis of pertinent financial and operational documents. Cost activity data was processed using ABC costing, resulting in tuition fees calculations based on the ABC method. These calculations were then juxtaposed with the Tuition Fees established by the school administration. The analysis identified a cost discrepancy (undercharging), where the cost per student exceeded the total Tuition Fees income and School Operational Funds (SOF) or Government Subsidy. For junior high school grades 1, 2, and 3, the differences were Rp 68,092, Rp 65,877, and Rp 85,668, respectively. For high school levels 1, 2, and 3, the discrepancies were Rp 6,674, Rp 49,014, and Rp 51,354, respectively. The study recommends that the school increase the monthly tuition fees to adequately cover the actual costs of education.

Mutual fund liquidity management and family affiliation

The article investigates how fund family affiliation impacts the liquidity management of U.S. equity funds. We find that funds within large families use cash and sell their most liquid assets to meet redemption demand. In contrast, funds within small families maintain their cash balance and their most liquid assets. We also find that, in large fund families, funds with high (low) total fees tend to consume (preserve) liquidity. In contrast, in small fund families, funds implement similar liquidity strategies regardless their fee charges. These results are consistent with the fund family favoritism strategy documented in the mutual fund literature.

Parking recommendation with meta-heuristic algorithms

Due to the exponential growth of cars in urban areas, parking problems have become a significant concern. Addressing this issue requires efficient methods for locating available parking spaces, enhancing the overall experience for drivers. This paper introduces a parking lot recommendation model leveraging meta-heuristic algorithms to generate a list of potential parking locations based on the users travel destinations. The primary objectives of these algorithms include minimizing travel distance, reducing total parking fees, and selecting parking lots with ample available spaces. The proposed model incorporates bio-inspired algorithms, including simulated annealing, genetic algorithms, and their adaptive variants. Our evaluation compares the performance of these algorithms, highlighting the adaptive simulated annealings superior quality of solutions and robustness against local minima. However, it is important to note that this approach comes with a trade-off, requiring longer execution times. In summary, this research contributes a novel parking lot recommendation model that effectively addresses the challenges posed by urban parking. The performance evaluation underscores the efficacy of the adaptive simulated annealing approach, showcasing its potential for practical implementation despite its relatively longer execution time.

322 A Cost Analysis of Medical Students Applying to Neurological Surgery Residency: An Analysis of the Texas STAR Database

INTRODUCTION: Medical Students applying to competitive residencies such as neurosurgery incur substantial costs associated with interviews, away rotations, and application fees. Researchers in the past have examined the sources of expenses during the residency application cycle, but few studies have compared the expenses prior to and during the COVID-19 pandemic. METHODS: The TEXAS STAR database was surveyed for applicants of neurosurgical residency programs during the COVID-19 pandemic (2021) and post-pandemic (2022). In total, 66 applicants for the 2021 application cycle and 50 applicants for the 2022 application cycle completed the survey. We compared the application fees, away rotations cost, interview cost, and total expenses as reported by the neurosurgery applicants of the 2021 and 2022 application cycle. A Shapiro-Wilk test was used to test for data normality, and a Mann-Whitney U-Test was used to compare costs during the 2021 and 2022 neurosurgery application cycle. RESULTS: There was a statistically significant reduction in total expenses in 2021 vs 2022 ($3,934 vs $9,860). Interview expenses and away rotation expenses were also decreased in 2021 vs 2022 (interview expenses $786 vs $4511, away rotation $1,083 vs $3,000, p < 0.001). Application fee expenses were not different between the 2021 and 2022 application cycle. Regional stratification revealed the greatest reduction in cost, an $11,908 savings, in the South region for the year of 2021. CONCLUSIONS: Our study revealed that the COVID-19 pandemic caused a significant reduction in the total fees associated with the neurosurgical residency application. The use of virtual platforms in place of in-person interviews could lessen the financial burden on applicants and alleviate socioeconomic barriers in the neurosurgical application process even after COVID-19.

Bitcoin Ordinals: Determinants and impact on total transaction fees

Bitcoin Ordinals are on-chain non-fungible assets native to the Bitcoin blockchain. As the data is stored on-chain, by opposition to Ethereum-like NFTs, creating an ordinal (i.e. “inscribing” it) can be expensive. We analyze the initial wave of Ordinals from December 14th 2022 until April 16th 2023. We show that ordinal inscriptions tend to have a lower fee rate than regular transactions. We also show that a high average block transaction fee rate is associated with lower ordinal inscriptions. These effects are larger for large inscriptions. This suggests that ordinal users are careful when setting the fee rate of their inscriptions. We also show that both the transaction fee rate for non-inscription transactions and total block fees have increased with the popularity of Bitcoin Ordinals, increasing miners’ revenue.

The differential impact of distracted auditors in managing portfolio of financially distressed audit clients on audit quality: the role of professional skepticism

This study hypothesizes that distracted auditors affect audit quality. As a result of resources scarcity, auditors pay more attention to financially distressed audit clients rather than non-financially distressed audit clients at the same audit client portfolio which eventually leads to differences in audit quality. In this context, earnings restatement of audit clients is used as a distraction event of auditors. Distracted auditor is measured by the percentage of the audit fees of financially distressed audit clients to total audit fees and audit quality is proxied by total accruals. The data is obtained from firms listed on the US stock market over eleven years between 2010 and 2020. The results indicate that financially distressed audit clients of distracted auditors receive higher audit quality than non-financially distressed audit clients of the same audit client portfolio. Further analysis suggests that this difference in audit quality between financially distressed audit clients and non-financially distressed audit clients decreases with skeptical auditors. This study introduces a new comprehensive approach to measure professional skepticism using KAMs disclosure. The results are robust to different measurements of distracted auditors, audit quality and professional skepticism. Overall, the empirical analyses suggest that distracted auditors have a decreasing differential impact on audit quality by professional skepticism.

Impact of Intercompetitor Licensing on Remanufacturing Market Competition and Cooperation

This article investigates the impact of intercompetitor licensing between an original equipment manufacturer (OEM) and an independent remanufacturer (IR) on market competition between new and remanufactured products, the IR's remanufacturing strategy, and the IR's optimal quality choice for remanufactured products. In the considered supply chain, the OEM sells new products, and the IR collects used products and then sells remanufactured products to compete with the OEM. To produce remanufactured products, the IR can acquire remanufacturing technology either by paying a licensing fee to the OEM or self-developing it in-house by incurring a fixed research and development cost. We develop game-theoretic models to determine the optimal supply chain decisions concerning the royalty licensing fee, IR's remanufacturing strategy and production quality, and product sale prices. We find that a licensing contract will always induce the OEM and the IR to increase their sales price for new and remanufactured products. However, the OEM will always increase the sales price for new products to a larger degree than that of the IR. This can alleviate price competition between new and remanufactured products and make remanufactured products more competitive in the market. Under licensing cooperation, the IR will always remanufacture used products to a higher quality level that will intensify quality competition. No matter whether the royalty fee is exogenously or endogenously determined by the OEM, there exists a wide range of parameter regions such that a licensing contract will produce a win-win solution for the OEM and the IR. A licensing cooperation may be reached even when the unit royalty fee is at a relatively low level and the total royalty fee is higher than the self-development option.

Why do audit clients voluntarily disclose the compliance and planning components of auditor provided tax services?

Criticisms of audit firms marketing and devising tax avoidance strategies for their audit clients have led to calls from regulators, investors, and proxy advisors for more detailed disclosures on the composition of tax non-audit services (NAS). Using a hand-collected dataset, we examine the determinants of audit clients’ voluntary bifurcation of total tax NAS fees into the tax planning and compliance components, and the effect of these voluntary disclosures on firm value. We find that firms with higher levels of tax NAS are more likely to provide this disclosure, as well as firms that engage in higher levels of tax avoidance and have accounting experts serve on the audit committee. Using textual analysis, we find that among voluntary tax NAS fee breakdown disclosers, firms with higher total tax and, specifically, tax planning NAS fees have longer and less similar tax NAS fee disclosures relative to the prior period disclosure. Our firm value analyses indicate higher valuations for firms providing voluntary breakdown disclosures when these disclosures reveal high tax NAS fees generally, and high tax planning NAS fees specifically. The firm valuation effects are incrementally more pronounced when voluntary tax NAS fee breakdown firms report higher tax avoidance and expert audit committee oversight. Our results suggest that the voluntary disclosure of private information regarding the nature of tax NAS is one mechanism through which firms facing scrutiny over the implications of these services can alleviate information asymmetry and stakeholder skepticism of tax NAS.

General dental practitioners' fees for root canal treatment, coronal restorationand follow-on treatment in the adult population in Sweden: A 10-year follow-up of data from the Swedish Dental Register.

To analyze the accumulated fees connected with root filling, permanent coronal restoration and follow-on treatment charged by Swedish dentists over a 10-11-year follow-up period. Furthermore, analyzing these fees with reference to the type of restoration, tooth group, and the root-filled teeth which survived compared to those requiring extraction. In 2009, the data register of the Swedish Social Insurance Agency recorded a total of 215,611 teeth as root-filled. The accumulated fees for each tooth encompassed the following interventions: initial root filling, coronal restorations, and follow-up treatments during the designated period. The outcomes were analyzed using descriptive and analytic statistics, including ttests and one-way analysis of variance. The fees are presented in Euros (€1 = SEK 8.94). The total accumulated fees for root fillings amounted to 72 million Euros: the mean fee per root filled tooth was €333.6. The total mean fee over a 10-11-year period, comprising root canal treatment, coronal restorations, and any follow-up treatments, was €923.4. Root-filled teeth with indirect restorations presented a higher mean fee (€1 279.3) compared to those with direct restorations (€829.4) or those without specified restorations (€832.7; p < .001). Moreover, molars presented a significantly higher mean fee (€966.4) compared to premolars (€882.8) and anterior teeth (€891.3; p < .001). Lastly, the mean fee for extracted teeth was €1225.3, which was higher compared to those who survived the follow-up period (€848.0; p < .001). Fees charged by general dental practitioners for root-filled teeth accumulate over time, probably due to the need for further treatment of the tooth. The total mean fee was significantly higher for molars and root-filled teeth with indirect restorations. However, an analysis of the total costs would require prospective clinical cost-effectiveness studies.

Pollution load assessment in the form of TSS and COD emitted from an urbanized catchment in the aspect of administrative pollutant discharge fees on the example of the activity of the J1 CSO in Lodz (Poland)

The article presents the possibility of reducing fees for wastewater discharge from combined sewer overflows (CSOs) into the aquatic environment by minimizing the load emission of total suspended solids (TSS) and chemical oxygen demand (COD). The analysis was conducted based on limiting the wastewater volume discharged to the receiving water by one of the viable options, i.e., raising the overflow crest. The assessment was made on the example of the functioning J1 CSO in Lodz (in Polish: Łódź) in the years 2013–2015. An analysis of rainfall recorded in the J1 catchment area was also performed for this period. For the determination of the TSS and COD load emitted to the receiver, a predictive model based on rainfall parameters and the volume of discharged wastewater was used. To determine the wastewater volume emitted during individual activations of the J1 overflow, the model of the sewer network serving this catchment was calibrated in the EPA SWMM software. Simulations were conducted, considering different heights of the weir crest (static change). The results of the analyzes showed that raising the crest by 5 cm reduced the total fee for the J1 activity by 35% compared to its existing height in 2013 and about 40% for 2015. Raising the crest by 10 cm in 2015 enabled, for example, the J1 overflow activity to be in accordance with the applicable law. Reducing the amount of wastewater discharged to the receiver by using the overflow crest height adjustment method presented in the article may bring measurable financial and ecological benefits.

An Analytical Data Model to Improve Benefits of the Comprehensive Health Insurance System By Data Mining Techniques

Health insurance represents a crucial safeguard against the myriad risks associated with individual health conditions, covering expenses related to examinations, diagnosis and treatment, as well as providing psychological and physical support. Until mid-2019, Egypt implemented a social health insurance system, and then moved to a renewed framework known as the comprehensive health insurance system in the latter half of 2019. The research at hand focuses on exploring a new mechanism through develop a new model, it can be help the General Authority for Health Insurance to attainment of maximum benefits, whether in terms of individuals medical services or the enhancement of the nation's overall income return.&#x0D; The researcher depends on using the data mining technique to conduct specialized analyzes of big data for the new model, to offer the numerous advantages, including empowering decision-makers to make accurate decisions based on reliable information and proficient data analysis, Based on the new model for the health insurance system that was prepared and implemented using the Weka program, version 3.8.6, through the classifier scheme (classifiers.trees.J48 algorithm), the applied pattern was used:&#x0D; (Scheme:weka.classifiers.misc.InputMappedClassifier -I -trim -Wweka.classifiers.trees.J48 -- -C 0.25 -M 2), Through the Weka program, a new model was designed that contains two parts. The first part is to classify the insured into insurance categories according to their monthly salaries, and the second part is to predict the classification and distribution of employees among insurance packages according to the new health insurance model. The model was prepared using Weka.classifiers.trees.J48. software to analysis the dataset of 2781 employees.&#x0D; One of the significant outcomes that the researcher emphasizes from implementing the new model is the attainment of maximum benefits, whether in terms of individual medical services or the enhancement of the nation's overall income return. Under the existing health insurance law in Egypt, the monthly subscription fee is a flat 1% for all employees, without accounting for other factors. The results of applying the new model showed the effectiveness of the model through a comparison between the current subscription fees and the new health insurance model, developed using the same dataset of 2781 employees, reveals that the total monthly subscription fees under the current health insurance system amount to 153057.97 Egyptian Pounds (L.E.), whereas the total subscription fees under the new health insurance system model reach 365998.91 L.E., The financial benefits realized from the new model amount to 212940.94 L.E., representing a percentage increase of up to 139.12%. This demonstrates a considerable improvement in financial outcomes, and the potential advantages of transitioning to the new health insurance model.

Multihoming and Oligopolistic Platform Competition

We provide a general framework to analyze competition between any number of symmetric two-sided transaction platforms, in which buyers and sellers can multihome. We show how key primitives such as the number of platforms, the fraction of buyers that find multihoming costly, the value of transactions, and the degree of user heterogeneity jointly determine the level and structure of platform fees. Even though platform entry always reduces the total fee level, whether it shifts the fee structure in favor of buyers or sellers depends on whether most of the buyers are singlehoming or multihoming. (JEL D43, L11, L13, L40)

Audit committee characteristics as determinants of non-audit fees in UK FTSE 350 companies

Purpose This study aims to examine trends in audit committee characteristics of companies and associates characteristics subject to major change with a fee-based proxy for audit committee effectiveness. Design/methodology/approach The research adopts an empirical approach. Using descriptive and inferential statistics, observations for 253 Financial Times Stock Exchange 350 companies’ audit committee characteristics gathered from annual reports at the beginning and end of a five-year period are evaluated against averaged non-audit fees (NAF) as a proportion of total audit fees. Findings Audit committee composition shows an increased incidence of female membership and of members with previous audit experience. The increase in members with previous audit experience is more marked where this is gained with the incumbent auditor. An increase is also shown in chief financial officers with previous audit experience. Previous audit experience is associated with reduced NAF as a proportion of total fees. This is marked where audit experience has been gained with the incumbent auditor. These results suggest that the benefits of financial expertise gained from audit experience outweigh impairments to independence due to social ties. Nevertheless, other studies indicate concerns about independence are still well-founded. Originality/value This paper’s original contribution is to evaluate the potential effect of previous audit experience on those involved in audit committees in light of concerns raised in the literature and by regulators that external auditor independence should be maintained. The innovative fee-based proxy for audit committee effectiveness facilitates an evaluation as to which influence prevails.