On the Persistence and Dynamics of Big 4 Real Audit Fees : Evidence from the UK

Kacer, Marek and Peel, David Alan and Peel, Michael J. and Wilson, Nicholas (2018) On the Persistence and Dynamics of Big 4 Real Audit Fees : Evidence from the UK. Journal of Business Finance and Accounting, 45 (5-6). pp. 714-727. ISSN 0306-686X

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Despite the huge audit pricing literature, there is a dearth of evidence on the temporal dynamics of audit fee adjustments and the persistence of audit fees. Based on a sample of 76,867 panel observations for a sample of UK companies audited by the Big 4 over the period 1998 to 2012, we employ consistent lagged dependent variable panel estimators to provide new evidence on the persistence and dynamics of real Big 4 audit fees. Contrary to extant research, which assumes that audit fees adjust immediately in a single period, our empirical results indicate that Big 4 real audit fees are persistent, being partly dependent on their previous realisations. We conclude that static audit fee models omit a potentially important temporal dimension of audit pricing behaviour and that further research is warranted into dynamic audit fee models across other jurisdictions.

Item Type:
Journal Article
Journal or Publication Title:
Journal of Business Finance and Accounting
Additional Information:
This is the peer reviewed version of the following article: Kacer M, Peel DA, Peel MJ, Wilson N. On the persistence and dynamics of Big 4 real audit fees: Evidence from the UK. J Bus Fin Acc. 2018;45:714–727. https://doi.org/10.1111/jbfa.12310 which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1111/jbfa.12310/abstract This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
Uncontrolled Keywords:
?? adjustment speedbig 4ig 4 dyndynamic panel estimatesreal audit feeslisted and unlisted companiespartial adjustmentpersistencefinancebusiness, management and accounting (miscellaneous)accounting ??
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Deposited On:
26 Jan 2018 14:56
Last Modified:
17 Jul 2024 23:41