Rights statement: This is the peer reviewed version of the following article: Kacer M, Peel DA, Peel MJ, Wilson N. On the persistence and dynamics of Big 4 real audit fees: Evidence from the UK. J Bus Fin Acc. 2018;45:714–727. https://doi.org/10.1111/jbfa.12310 which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1111/jbfa.12310/abstract This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
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Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - On the Persistence and Dynamics of Big 4 Real Audit Fees
T2 - Evidence from the UK
AU - Kacer, Marek
AU - Peel, David Alan
AU - Peel, Michael J.
AU - Wilson, Nicholas
N1 - This is the peer reviewed version of the following article: Kacer M, Peel DA, Peel MJ, Wilson N. On the persistence and dynamics of Big 4 real audit fees: Evidence from the UK. J Bus Fin Acc. 2018;45:714–727. https://doi.org/10.1111/jbfa.12310 which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1111/jbfa.12310/abstract This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
PY - 2018/5
Y1 - 2018/5
N2 - Despite the huge audit pricing literature, there is a dearth of evidence on the temporal dynamics of audit fee adjustments and the persistence of audit fees. Based on a sample of 76,867 panel observations for a sample of UK companies audited by the Big 4 over the period 1998 to 2012, we employ consistent lagged dependent variable panel estimators to provide new evidence on the persistence and dynamics of real Big 4 audit fees. Contrary to extant research, which assumes that audit fees adjust immediately in a single period, our empirical results indicate that Big 4 real audit fees are persistent, being partly dependent on their previous realisations. We conclude that static audit fee models omit a potentially important temporal dimension of audit pricing behaviour and that further research is warranted into dynamic audit fee models across other jurisdictions.
AB - Despite the huge audit pricing literature, there is a dearth of evidence on the temporal dynamics of audit fee adjustments and the persistence of audit fees. Based on a sample of 76,867 panel observations for a sample of UK companies audited by the Big 4 over the period 1998 to 2012, we employ consistent lagged dependent variable panel estimators to provide new evidence on the persistence and dynamics of real Big 4 audit fees. Contrary to extant research, which assumes that audit fees adjust immediately in a single period, our empirical results indicate that Big 4 real audit fees are persistent, being partly dependent on their previous realisations. We conclude that static audit fee models omit a potentially important temporal dimension of audit pricing behaviour and that further research is warranted into dynamic audit fee models across other jurisdictions.
KW - adjustment speed
KW - Big 4ig 4 dyn
KW - dynamic panel estimates
KW - real audit fees
KW - listed and unlisted companies
KW - partial adjustment
KW - persistence
U2 - 10.1111/jbfa.12310
DO - 10.1111/jbfa.12310
M3 - Journal article
VL - 45
SP - 714
EP - 727
JO - Journal of Business Finance and Accounting
JF - Journal of Business Finance and Accounting
SN - 0306-686X
IS - 5-6
ER -