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Differences in audit pricing between voluntary and mandatory audits

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Differences in audit pricing between voluntary and mandatory audits

dc.contributor.author	Gandía, Juan L.
dc.contributor.author	Huguet, David
dc.date.accessioned	2023-11-23T16:42:33Z
dc.date.available	2023-11-23T16:42:33Z
dc.date.issued	2018
dc.identifier.issn	1012-8255
dc.identifier.uri	https://hdl.handle.net/10550/91394
dc.description.abstract	Purpose Despite the extensive research on the determinants of audit pricing in both public and private settings, there is a lack of research about the differences in audit fees between voluntary audits and mandatory audits. This study addresses this gap. Design/methodology/approach Firstly, a theoretical framework is developed to justify differences in audit pricing between voluntary and mandatory audits. Next, using a sample of Spanish private SMEs1 running from 2009 to 2014, we empirically test whether the fees charged for voluntary audits differ from those charged for mandatory ones. We also examine whether the premium observed among large auditors is persistent in the SME setting, and whether this premium differs depending on whether the audits are voluntary or mandatory. Findings Although a preliminary analysis does not report significant differences in pricing between voluntary and mandatory audits, additional analyses using samples restricted by company size show that voluntary audits are charged with a premium. We observe a premium related to large auditors, and find no significant differences in the audit pricing of Big 4 auditors depending on the mandatory/voluntary nature of the audit, b ut the premium associated with Middle-Tier auditors disappears in the voluntary setting. Originality/value This paper contributes to the previous literature by introducing the examination of differences in audit pricing between voluntary and mandatory audits. As far as we know, this is the first study to examine the differences in audit pricing between voluntary and mandatory audits. It also elaborates on studies on audit pricing in SMEs.
dc.language.iso	eng
dc.relation.ispartof	Academia-Revista Latinoamericana de Administracion, 2018, vol. 31, num. 2, p. 336-359
dc.source	Gandía, J.L. and Huguet, D. (2018), "Differences in audit pricing between voluntary and mandatory audits", Academia Revista Latinoamericana de Administración, Vol. 31 No. 2, pp. 336-359. https://doi.org/10.1108/ARLA-01-2016-0007
dc.subject	auditoria fiscal
dc.subject	economia
dc.subject	economia d'empresa
dc.title	Differences in audit pricing between voluntary and mandatory audits
dc.type	journal article
dc.date.updated	2023-11-23T16:42:33Z
dc.identifier.doi	10.1108/ARLA-01-2016-0007
dc.identifier.idgrec	120205
dc.rights.accessRights	open access