Audit Fee Determinants for SMEs - Evidence from Shen Zhen, China

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Kai, Zhu (2009) Audit Fee Determinants for SMEs - Evidence from Shen Zhen, China. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

The research on determinants of audit pricing has never stopped since the first study published in 1980. The surge of Chinese small and medium enterprises listing on Shen Zhen Stock Exchange and the lack of study of SMEs sector of Chinese audit market have inspired this work to determine the audit pricing models of these companies.

In present study, I attempted to create four 'first time's. Firstly, I originally developed an audit fee determinants model for small and medium auditee sector in China. Secondly, I tested audit fee change in Chinese SMEs market for the first time. Thirdly, I initiated industry influence test in audit pricing in China. Last but not the least, I summarized main literatures about audit pricing of Chinese market which were published after 2001 when reporting audit fees in annual report became a mandatory requirement of China Securities Regulatory Commission. Regression analysis was the main methodology and all the tests were conducted through statistical software StataSE10.

When testing audit pricing model, the results of regression strongly supported previously research by showing that log total assets and square root of total number of subsidiaries were significant across all groups. A key finding of this paper is that small and medium companies are willing to pay a premium to be audited by international Big4 auditors in the market under consideration. Further test on audit fee change indicates that change of asset and change of auditor were the two main reasons of audit fee change. Test of industry influence showed that there is no obvious difference among industries when pricing audit service fees in China.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 03 Feb 2010 14:13
Last Modified: 16 Feb 2018 22:40
URI: https://eprints.nottingham.ac.uk/id/eprint/23154

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