This paper identifies the statistically significant determinants for audit fees in the South African market by regressing audit fees against a selected set of determinant variables. This study is not the first investigating the South African market and so broadens the existing body of research both within the country as well as the global body of research. Determinant variables identified in prior research across the globe were used to establish the existence of a relationship in the local market. This study further extended the local body of research by considering the implication of audit timing and location on the audit fee as well as using more recent data. A positive statistically significant relationship was found between audit fees, asset value, proportion of assets held as inventory and accounts receivables and the number of subsidiaries. In contrast to prior local research, results showed that a large audit firm fee premium did not exist. This was shown to be due to the commoditisation of auditing, cost pressures from companies and increased competition within the audit market. Audits within the Gauteng region were priced at a premium to other provinces whilst the timing of the audit has a statistically significant impact on the audit fee. The validity of the model has improved in comparison to prior South African studies as a result of audit fees being further driven by audit complexity than by size of the auditee.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:uct/oai:localhost:11427/15474 |
| Date | January 2015 |
| Creators | Davidson, Dhanyal |
| Contributors | West, Darron |
| Publisher | University of Cape Town, Faculty of Commerce, Department of Finance and Tax |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Master Thesis, Masters, MCom |
| Format | application/pdf |
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