Do Big-Four affilitates earn audit fee premiums in emerging markets?

Siddiqui, Javed, Zaman, Mahbub, & Khan, Arifur (2013) Do Big-Four affilitates earn audit fee premiums in emerging markets? Advances in Accounting, 29(2), pp. 332-342.

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Abstract

The paper investigates whether Big-Four affiliated (B4A) firms earn audit premiums in an emerging economy context, using Bangladesh as a case. The joint determination of audit and non-audit service fees is also examined using a sample of 122 companies listed in the Dhaka Stock Exchange. Our findings reveal that although the B4A firms do not generally earn a fee premiumin Bangladesh, they charge higher audit fees for clients not purchasing non-audit services. This suggests that the B4A firms may actually lower audit fees to attract non-audit services, and cross subsidizes audit fees through non-audit-services fees. The lack of a B4A premium implies that there is lack of quality audit in emerging markets. We also document that audit and non-audit service fees are jointly determined in Bangladesh. Thus, we provide evidence of joint determination of audit and non-audit service fees in an emerging economy context.

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ID Code: 79426
Item Type: Journal Article
Refereed: Yes
Additional URLs:
Keywords: Audit fees, non-audit fees, emerging markets, Big 4 premium
DOI: 10.1016/j.adiac.2013.09.007
ISSN: 0882-6110
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Copyright Owner: © 2013 Elsevier Ltd. All rights reserved.
Deposited On: 11 Dec 2014 22:54
Last Modified: 06 Jan 2015 01:38

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