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Auditor independence, audit fees Lowballing, and non - audit services: evidence from Fiji

Patel, Arvind and Prasad, Pranil (2013) Auditor independence, audit fees Lowballing, and non - audit services: evidence from Fiji. Accounting and Taxation, 5 (2). pp. 103-120. ISSN 1944-529X

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Abstract

This study empirically examines the supply side of the market for non-audit services. In particular, a model for the supply side of the market for non-audit services is developed. This model is then tested using audit and non-audit fee data from Fijian listed companies from the year 1980 to 2010. We find that audit fee low-balling leads to increased supply of non-audit services. This result is statistically significant. We also find that Big 4 auditors supply less non-audit services compared to non-Big 4 auditors. Finally, we find that the longer the auditor tenure the lower the supply of non-audit services. However, both these results are statistically insignificant. This leads to a conclusion that non-audit services are being supplied for opportunistic reasons as opposed to efficiency reasons. Our results are robust to a number of sensitivity checks.

Item Type: Journal Article
Subjects: H Social Sciences > HJ Public Finance
Divisions: Faculty of Business and Economics (FBE) > School of Accounting and Finance
Depositing User: Pranil Prasad
Date Deposited: 23 Apr 2014 17:05
Last Modified: 06 Jul 2016 11:21
URI: http://repository.usp.ac.fj/id/eprint/7257
UNSPECIFIED

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