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The provision of non-audit services, audit fees and auditor independence

Che Ahmad, Ayoib and Shafie, Rohami and Mohamad Yusof, Nor Zalina (2006) The provision of non-audit services, audit fees and auditor independence. Asian Academy of Management Journal of Accounting and Finance , 2 (1). pp. 21-40. ISSN 1823-4992

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The objectives of this study are to examine the effect of non-audit services on audit fees, to investigate the relationship between non-audit fees and the issuance of qualified audit opinion, and to analyse the proportion of non-audit fees to total fees paid by a client to its auditor. The regression analysis reveals a significant positive relationship between audit fees and non-audit fees, which is contrary to the theory available in the literature. Further tests are done and alternative explanations are provided. The results obtained from the t-test suggest a significant relationship between non-audit fees and qualified audit opinions. The outcomes indicate that on average audit opinions are dependent on the amount of non-audit fees. Finally, the descriptive analysis presents a worrying development about the ratio of non-audit fees to total fees. The study suggests ways to improve the independence issues in Malaysia.

Item Type: Article
Uncontrolled Keywords: non-audit services, audit fees, auditor independence, audit opinion
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Divisions: College of Business
Depositing User: Prof. Dr. Ayoib Che Ahmad
Date Deposited: 30 Jun 2010 08:51
Last Modified: 30 Jun 2010 08:51
URI: http://repo.uum.edu.my/id/eprint/74

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