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The pricing of audit services: evidence from Kuwait

The pricing of audit services: evidence from Kuwait Purpose – The main objective of this study is to investigate factors influencing the amount of external audit fees in Kuwait. Of particular interest is the examination of the potential effect of the client size, client complexity, client risk, and the size of the audit firm on external audit fees. Design/methodology/approach – An audit fee model is used to examine the effect of audit client size, client complexity, client risk, and the size of the audit firm on the amount of audit fees for a sample of audit engagements performed in the Kuwaiti audit market. Findings – The study's results indicate that the amount of external audit fees is significantly influenced by the audit client size, liquidity ratio, and profitability ratio. The results, however, do not provide evidence of a significant relation between audit fees and the number of audit locations, or the size of the audit firm. Originality/value – This study is original since it is the first to empirically investigate factors influencing the pricing of audit services in Kuwait. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Managerial Auditing Journal Emerald Publishing

The pricing of audit services: evidence from Kuwait

Managerial Auditing Journal , Volume 23 (7): 12 – Jul 25, 2008

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Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
0268-6902
DOI
10.1108/02686900810890643
Publisher site
See Article on Publisher Site

Abstract

Purpose – The main objective of this study is to investigate factors influencing the amount of external audit fees in Kuwait. Of particular interest is the examination of the potential effect of the client size, client complexity, client risk, and the size of the audit firm on external audit fees. Design/methodology/approach – An audit fee model is used to examine the effect of audit client size, client complexity, client risk, and the size of the audit firm on the amount of audit fees for a sample of audit engagements performed in the Kuwaiti audit market. Findings – The study's results indicate that the amount of external audit fees is significantly influenced by the audit client size, liquidity ratio, and profitability ratio. The results, however, do not provide evidence of a significant relation between audit fees and the number of audit locations, or the size of the audit firm. Originality/value – This study is original since it is the first to empirically investigate factors influencing the pricing of audit services in Kuwait.

Journal

Managerial Auditing JournalEmerald Publishing

Published: Jul 25, 2008

Keywords: Kuwait; Auditor's fees; External auditing; Auditors; Modelling

References