The impact of audit quality reviews on audit fees of New Zealand listed companies
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Authors
Rainsbury, Liz
Van Dyk, D.
Hay, D.
Dassanayake, Wajira
Van Dyk, D.
Hay, D.
Dassanayake, Wajira
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Date
2019-07
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Conference Contribution - Paper in Published Proceedings
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Keyword
New Zealand
listed companies
Financial Markets Authority (FMA) of New Zealand
audit quality
audit fees
listed companies
Financial Markets Authority (FMA) of New Zealand
audit quality
audit fees
ANZSRC Field of Research Code (2020)
Citation
Rainsbury, L., Van Dyk, D., Hay, D., & Dassanayake, W. (2019). The Impact of Audit Quality Reviews on Audit fees of New Zealand Listed Companies. In AFAANZ 2019 Conference (Ed.), Brisbane, Queensland, Australia (pp. 1-35).
Abstract
This study examines the impact of audit quality reviews by the Financial Markets Authority (FMA) on audit fees of New Zealand listed companies. The FMA commenced audit quality reviews in 2013. This study examines audit fees from 2009 to 2016 and compares audit fees over the three years before and the four years after quality reviews began. We find that the mean constant annual compound growth rate in audit fees declined -1.6% over the 2009-2016 period indicating a very competitive audit market. Further analysis shows that audit fees of smaller listed companies increased by approximately 11% after the introduction of independent quality reviews. The results suggest that auditors of larger companies have been able to absorb additional costs associated with the reviews, while this has not been possible for smaller firms. In conclusion, the introduction of mandatory audit quality reviews has had greater economic consequences for smaller listed companies which have had a significant increase in audit fees.
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Accounting and Finance Association of Australia and New Zealand (AFAANZ)
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