Evaluation of Factors Determining Audit Fee in Quoted Nigerian Deposit Money Banks

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Department of Accounting University of Port Harcourt


With auditors mostly found wanting in corporate scandals, there is growing emphasis on the need for auditors of companies in highly regulated. sectors like banks to consider factors that are important to regulators. This study evaluates the determinants of audit fee based on variables that are peculiar to banking industry and considered salient to regula tars of banking services. It also examines the effect of IFRS adoption on audit fee of banks. Data were sourced from annual reports and accounts of 01/ the fifteen (15) quoted deposit money banks for the period covering 2006•2015 and were analysed USing descriptive statistics and inferential statistics. The result Of Hausman specification test favours random-effect over the fixed•effect models of panel least square regression. Findings of the study revealed that capital risk has negative Influence on audit fees at 10 level of Significance while credit risk shows positive influence at 1 level of significance. Also, complexity, IFRS adoption and size had Significant positive relationship with audit fees at 1, 10 and 5 levels Of significance respectively. However, management efficiency and profitability showed no significant relationship with audit fees. As regards variables considered important to regulators of banks, the study concludes that auditors do not seem to consider management efficiency In determination of audit fees. The study recommended amongst others that auditors of banks should further align the determination of their fees with factors that ore considered important to regulatory bad r to reduce costly litigation associated with audit failure.



Auditors, Audit fee pricing, Audit quality, Deposit Money Banks