The determinants of audit fees in the alternative investment market (Aim) in the UK: Evidence on the impact of risk, corporate governance and auditor size

IF 3.3 Q1 BUSINESS, FINANCE

Journal of International Accounting Auditing and Taxation Pub Date : 2023-03-01 DOI:10.1016/j.intaccaudtax.2023.100523

Bai Xue , Noel O'Sullivan

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引用次数: 2

Abstract

This study examines the determinants of audit fees for companies listed on the Alternative Investment Market (AIM) in the United Kingdom (UK), which is the secondary market of the London Stock Exchange for small and medium sized companies. AIM companies are expected to present different audit pricing challenges compared to fully listed firms. From an audit demand perspective, AIM companies exhibit different risk and governance characteristics while, from a supply perspective, the AIM is characterized by greater auditor choice than typically found in main markets. We find that audit fees in the AIM are negatively influenced by client liquidity and the length of listing. We also find that higher levels of audit committee disclosures are associated with higher fees, although there is no evidence that individual audit committee characteristics influence audit fees. After controlling for self-selection bias, we find that Big 4 auditors charge higher fees and this premium is especially pronounced for smaller firms. Our findings contribute to the audit pricing literature by illustrating that the determinants of audit fees depends on the institutional setting in which companies operate as well as highlighting the importance of specific risk measures and auditor size in the determination of audit fees for AIM companies.

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英国另类投资市场(Aim)审计费用的决定因素:风险、公司治理和审计师规模影响的证据

本研究考察了英国另类投资市场（AIM）上市公司审计费用的决定因素，AIM是伦敦证券交易所面向中小型公司的二级市场。与完全上市的公司相比，AIM公司预计将面临不同的审计定价挑战。从审计需求的角度来看，AIM公司表现出不同的风险和治理特征，而从供应的角度看，AIM的特点是比主要市场的审计师选择更多。我们发现AIM的审计费用受到客户流动性和上市时间的负面影响。我们还发现，审计委员会披露的信息水平越高，费用越高，尽管没有证据表明个别审计委员会的特征会影响审计费用。在控制了自我选择偏见后，我们发现四大会计师事务所收取的费用更高，而这种溢价对小公司来说尤其明显。我们的研究结果为审计定价文献做出了贡献，说明了审计费用的决定因素取决于公司运营的机构环境，并强调了特定风险措施和审计师规模在确定AIM公司审计费用方面的重要性。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of International Accounting Auditing and Taxation BUSINESS, FINANCE-

CiteScore

4.50

自引率

3.80%

发文量

期刊介绍： The Journal of International Accounting, Auditing and Taxation publishes articles which deal with most areas of international accounting including auditing, taxation and management accounting. The journal''s goal is to bridge the gap between academic researchers and practitioners by publishing papers that are relevant to the development of the field of accounting. Submissions are expected to make a contribution to the accounting literature, including as appropriate the international accounting literature typically found in JIAAT and other primary US-based international accounting journals as well as in leading European accounting journals. Applied research findings, critiques of current accounting practices and the measurement of their effects on business decisions, general purpose solutions to problems through models, and essays on world affairs which affect accounting practice are all within the scope of the journal.