An Empirical Investigation of Audit Fee Determinants in Nigeria


  • Ruth Osaretin Urhoghide
  • Prof. F. O. I. Izedonmi Department of Accounting, Faculty of Management Sciences, University of Benin, Benin City, Edo State, Nigeria



Audit client, Audit firm, Corporate Governance, panel data regression.


This study examines the effects of audit client characteristics, audit firm characteristics, corporate governance variables on audit fee in Nigeria. Several studies have been conducted in the unraveling the determinants of audit fees in other countries. Nigeria is not comparable with other countries, where the Nigerian audit and business environment, regulatory framework, culture, technology, legal and business sizes differ very significantly across the globe. The study used secondary data obtained from the published annual accounts and reports of one hundred and fifty three (153) companies from eleven (11) sectors of companies quoted on the Nigerian stock exchange from 2007-2012. The variables were analyzed using descriptive and correlation analysis. Thereafter, multiple regression analysis was conducted using pooled ordinary least squares and the panel estimated generalized least squares. Consistent with other prior research, the results for audit client characteristics revealed that audit client size and complexity have a positive and significant impact on audit fee while profitability, fiscal year end and industry have a negative and significant influence on audit fee. For corporate governance variables, board diligence, board expertise, board size, board independence, and audit committee independence, all have a positive and significant impact on audit fee. For audit firm characteristics, audit firm type, and international linkage have a positive and significant impact on audit fee while audit firm tenure has a negative and significant impact on audit fee. It is recommended that auditors should have a better understanding of these factors and their relative importance and how the factors might be built into an audit fee model.


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