THE DETERMINANTS OF AUDIT FEES: AUSTRALIAN PERSPECTIVE Available to Purchase

In line with the guidelines suggested by the Australian Society of Certified Practising Accountants, a sample of 243 Australian listed companies was used in this study to investigate if the factors of auditee size, audit complexity, audit time, audit quality and audit risk could explain the variation of auditor fees. The model achieved a relatively high level of goodness‐of‐fit (adjusted R equals to 0.7631) and overall significance at p <0.001 (F‐ratio). Like most prior studies, auditee size appeared to be the most important factor explaining audit fee payments. However, adding a non‐audit fee variable provided little incremental explanatory power to the audit pricing model, indicating that providing audit and non‐audit services jointly may not create a “knowledge spillover” which is hypothesised to lead to economic rents.