Evolution of Audit Fees - Perspective on Auditors` Risks

Abstract

Audit fees are among the essential concerns of audit firms and regulators. The paper's objective is to analyze the evolution of audit fees collected by auditors. Based on the data included in the Audit Analytics database, a sample of 1927 distinct companies was selected. 24921 observations were reported, representing audit fees from 2009 to 2020. The research showed that the audit market was concentrated around Big4 auditors, whose number increased directly to the number of issued reports. Most of the audited companies were in the field of Finance, insurance, and real estate (28%) and in the field of Production (32%), the majority being headquartered in the United Kingdom and France. The evolution of audit fees fluctuated during the analyzed period, but the trend of the average fee was decreasing. The share of fees was 58.6% for performing audit missions and 40.4% for non- audit services. The evolution of the average fee was inversely proportional to the value of the declared income and assets and the audit fees collected by the auditors. Therefore, the level of fees should be correlated with the volume of auditors' activity, the industries' complexity and the financial performance of the companies.