Abstract
The paper investigates whether Big-Four affiliated (B4A) firms earn audit premiums in an emerging economy context, using Bangladesh as a case. The joint determination of audit and non-audit service fees is also examined using a sample of 122 companies listed in the Dhaka Stock Exchange. Our findings reveal that although the B4A firms do not generally earn a fee premium in Bangladesh, they charge higher audit fees for clients not purchasing non-audit services. This suggests that the B4A firms may actually lower audit fees to attract non-audit services, and cross subsidizes audit fees through non-audit-services fees. The lack of a B4A premium implies that there is lack of quality audit in emerging markets. We also document that audit and non-audit service fees are jointly determined in Bangladesh. Thus, we provide evidence of joint determination of audit and non-audit service fees in an emerging economy context. © 2013 Elsevier Ltd.
Original language | English |
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Pages (from-to) | 332-342 |
Number of pages | 10 |
Journal | Advances in Accounting |
Volume | 29 |
Issue number | 2 |
DOIs | |
Publication status | Published - Dec 2013 |
Keywords
- Audit fees
- Big-4 premium
- Emerging markets
- Non-audit fees