The relation between external audit fees, audit committee characteristics and internal audit

Jenny Goodwin-Stewart, Queensland University of Technology
Pamela Kent, Bond University

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Pre-publication print

Goodwin-Stewart, Jenny and Kent, Pamela (2006) Relation between external audit fees, audit committee characteristics and internal audit is published in Accounting and Finance, Volume 46, Issue 3, Page 387-404, September 2006.
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2006 HERDC submission

Abstract

This study examines the association between audit fees, an effective audit committee and internal audit in an Australian setting. We find significant positive associations between the level of audit fees and the existence of an audit committee, the use of internal audit, and audit committee meeting frequency. We also find a significant 3-way interaction between audit committee independence, expertise and meeting frequency. Additional analysis indicates that expertise is positively associated with audit fees only when meeting frequency and independence are low. This is consistent with audit committee members with accounting expertise demanding a higher level of assurance in these circumstances.