An Empirical Investigation of the Determinants of Audit Fee Structures in Large Public Companies

Posted: Sep 26, 2022

• Jacob Harris
• Jacob Rivera
• Jacob Roberts

Abstract

The determination of audit fee structures represents a critical aspect of corporate governance and financial reporting quality in large public companies. While extensive research has examined traditional determinants of audit fees, the rapidly evolving business landscape characterized by digital transformation, heightened cybersecurity concerns, and increasing sustainability reporting requirements necessitates a comprehensive re-examination of audit pricing models. This study addresses significant gaps in the existing literature by investigating both established and emerging determinants through an innovative methodological framework that captures the complex interplay of factors influencing contemporary audit fee structures. Traditional audit fee research has predominantly focused on factors such as company size, operational complexity, and inherent risk profiles. However, the digital transformation of business operations, the proliferation of complex cybersecurity frameworks, and the growing emphasis on environmental, social, and governance reporting have introduced new dimensions to the audit process that remain underexplored in current literature. This research aims to bridge this gap by developing a comprehensive model that incorporates these emerging factors.