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The Impact of Enhanced Communication Requirement and other Determinants on Audit Fees


Ishak, Zuaini and Abidin, Shamharir (2018) The Impact of Enhanced Communication Requirement and other Determinants on Audit Fees. In: Knowledge Management International Conference (KMICe) 2018, 25 –27 July 2018, Miri Sarawak, Malaysia.

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Abstract

Studies generally suggest the audit report is not an effective communication tool to inform the users of Financial Statements about the audit and its process.In a move to enhance the informative value of the auditor’s report, the International Auditing and Assurance Standard Board has approved a standard called for an enhanced auditors’ report. While the introduction of the new report is expected to result in better financial reporting and audit quality, it may also cause auditors to incur additional audit costs due to increased audit efforts as well as reporting cost. The present study examines this possibility and based on the analysis of 261 listed companies, our results suggest that the new reporting requirement does not cause auditors to increase audit fees. Additional, the study suggests that size of the company, poor performance and ability to meet short term obligation are important determinants of audit fees.Two highly reputable audit firms namely, PWC and KPMG, are found to charge higher fees than others. The present study provides knowledge to regulators on how the auditors respond to regulatory change in the term of production cost and subsequently, would provide insight on how the change would alter the quality of audit reporting.

Item Type: Conference or Workshop Item (Paper)
Additional Information: ISBN: 9789670910871 Organized by: School of Computing, College of Arts and Sciences, Universiti Utara Malaysia.
Uncontrolled Keywords: Key audit matters, audit fees, audit quality.
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions: School of Computing
Depositing User: Mrs. Norazmilah Yaakub
Date Deposited: 28 Nov 2018 00:12
Last Modified: 28 Nov 2018 00:12
URI: http://repo.uum.edu.my/id/eprint/25228

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