Audit Fees after IFRS Adoption: Evidence from Malaysia

The new IFRS demand detailed disclosure, which requires more effort and time to conduct an audit engagement. Moreover, the report by the Institute of Chartered Accountants in England and Wales highlights that among the major IFRS related costs is the increment in auditing costs. Thus, the question o...

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Bibliographic Details
Published in:Eurasian business review 2012-06, Vol.2 (1), p.31-46
Main Authors: Yaacob, Najihah Marha, Che-Ahmad, Ayoib
Format: Article
Language:English
Subjects:
Audit engagements
Audit fees
Audit risk
Audited financial statements
Auditing
Auditors
Business and Management
Chartered accountants
Costs
Data analysis
Economic reform
Emerging Markets/Globalization
Entrepreneurship
Innovation/Technology Management
International accounting standards
International Financial Reporting Standards
Liability
Longitudinal studies
Professional fees
Quality standards
Regulation
Stock exchanges
Stockholders
Studies
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Summary:The new IFRS demand detailed disclosure, which requires more effort and time to conduct an audit engagement. Moreover, the report by the Institute of Chartered Accountants in England and Wales highlights that among the major IFRS related costs is the increment in auditing costs. Thus, the question of whether IFRS adoption in Malaysia would affect audit fees is questionable. An advanced data structure, panel data analysis, for a 5-year period (2004–2008) was utilized. The panel data regression results revealed a significant increase in the audit fees in the post-IFRS adoption period. This study provides evidence concerning the complexity of the new and amended IFRS, which results in auditors having to increase audit pricing to compensate for the increased audit effort.
ISSN:1309-4297
2147-4281
DOI:10.14208/BF03353806