publication . Other literature type . Article . 2014

Audit Fees and IAS/IFRS Adoption: Evidence from the Banking Industry

Pietro Perotti; Mara Cameran;
Open Access
  • Published: 01 Jul 2014
  • Publisher: Wiley
  • Country: United Kingdom
Abstract
The adoption of International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) has two opposite effects on audit fees: on the one hand, greater effort is required from auditors, which is likely to be reflected by higher fees; on the other hand, if IAS/IFRS improve the quality of financial reporting, expected liability costs could decrease and lower fees may be demanded. We consider a large sample of Italian banks and we examine the effect of IAS/IFRS adoption on audit fees. The results show that higher fees (19.29 per cent in real terms) are paid after the switch to the new standards. Using a standard earnings management model, we do n...
Subjects
free text keywords: Accounting, General Economics, Econometrics and Finance, business.industry, business, Hedge (finance), Banking industry, International Financial Reporting Standards, Earnings management, Hedge accounting, Liability, Derivative (finance), Audit
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