Determinants of audit fees: evidence from public-listed companies in Malaysia / Fariha Sobirah Abdullah Zawawi

Audit fees have been widely researched since past few decades and are still actively discussed until today. One of the areas still being researched on is the determinants of audit fees which emphasises on the factors that affect the decision of pricing of audit services. Prior studies have shown mixed results and findings on this issue. The objective of this paper is to investigate the determination of audit fees in the context of Malaysian public-listed companies. The determinants focused are profitability, audit client size, audit client complexity, audit client risks, and audit client fiscal year end. The secondary data have been obtained by gathering information from the audited annual reports of ten (10) industries by using proportionate stratified random sampling. The research has been based on 192 companies by using their audited annual reports for the year ended 2016. The analysis used to achieve the objectives of this study has been the multiple regression test. The average audit fee of the public- listed companies in Malaysia, based on this research, is RM439,490 in 2016. The findings have shown that from five (5) variables examined in this paper, only audit client size has a positive, significant relationship with audit fees. Meanwhile, the remaining four (4) variables, which are audit client profitability, audit client complexity, audit client risk, and fiscal year end, do not show any significant relationships with audit fees.