Determinants of audit fees: a study in the companies listed on the BMFBOVESPA, Brazil

This paper analyzes the determinants of audit fees paid by companies listed on the BM&FBOVESPA. Data referring to listed companies for 2012 show a positive relationship between fees and the variables size, client's complexity, and Big N auditors. The risk perceived by the auditor demonstrat...

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Bibliographic Details
Published in:Revista contabilidade & finanças 2015-09, Vol.26 (69), p.261
Main Authors: Castro, Walther Bottaro de Lima, Peleias, Ivam Ricardo, Silva, Glauco Peres da
Format: Article
Language:eng ; spa
Subjects:
Accounting
Audit fees
Auditing
Auditing procedures
Auditors
Audits
Competitive advantage
Corporate governance
Fees & charges
Financial statements
Legal fees
Studies
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Summary:This paper analyzes the determinants of audit fees paid by companies listed on the BM&FBOVESPA. Data referring to listed companies for 2012 show a positive relationship between fees and the variables size, client's complexity, and Big N auditors. The risk perceived by the auditor demonstrated to affect the values of fees differently in larger and smaller clients. In smaller clients, the results suggest that the auditor charges lower fees to more leveraged and riskier clients, contrary to the hypothesis that the auditor might charge higher fees as a reward for his risk. In turn, in larger clients, the results demonstrate that clients with higher risk, as measured by liquidity and leverage, or those having stronger governance practices, tend to spend more on auditing. As for changing the auditor, the results pointed out that larger clients pay less in the first year of audit. These results qualify the findings of Hallak and Silva (2012), suggesting the need for further research with temporally more extensive bases.
ISSN:1519-7077
1808-057X
DOI:10.1590/1808-057x201501560