Issue |
SHS Web Conf.
Volume 124, 2021
International Conference on Management, Social Sciences & Humanities (ICMeSH 2020)
|
|
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Article Number | 03004 | |
Number of page(s) | 9 | |
Section | Part 1 - Business and Economy for Sustainable Future | |
DOI | https://doi.org/10.1051/shsconf/202112403004 | |
Published online | 15 November 2021 |
Assessing audit fees: Turnover, inflation & minimum stipend rate
1 PhD scholar, Department of Management & Humanities, Universiti Teknologi PETRONAS, Perak, Malaysia
2 Chair, Department of Management & Humanities, Universiti Teknologi PETRONAS, Perak, Malaysia
3 Associate Professor, Department of Accounting, CEMIS College, University of Nizwa, Oman
4 Associate Professor, Department of Information Systems, Dean, CEMIS College, University of Nizwa, Oman
* Corresponding author: arockiasamy@unizwa.edu.om
Auditing firms rely on audit fees to generate revenue. The audit fee is generally agreed upon by auditee and auditor. For the calculation of audit fees, no standard formula exists. Pakistan's regulatory body for audit firms ‘ICAP' has imposed certain cost constraints on audit firms. As per the literature, stipend rates have been used rarely to determine audit fees. As a result, this paper examines audit fee determination using variables such as the company's assets, turnover, current ratio, inflation, and minimum stipend rate. These variables are especially influential in a developing country such as Pakistan. To determine audit fees, a panel regression model is being de-veloped. We used data from 40 publicly traded companies from 2014 to 2017 to regress on our model. After extensive testing with the Hausman and F-tests, the fixed effect model is finally applied. Empirically, it was discov-ered that the current ratio, the entity's turnover, and the stipend amount all have a significant positive effect on the calculation of audit fees. T The study's findings have significant implications not only for audit firms, but also for auditees in determining audit fees.
© The Authors, published by EDP Sciences, 2021
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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