Auditor attributes and their association with audit fees in Australia: an empirical study

This study investigates the existence of cartel pricing and anticompetitive behavior by the Big4 international providers of auditing services (resulting from the halving in the number of such providers from the Big8 to Big4). Increased audit market concentration, both globally and in Australia, together with the focus by the Big4 in servicing primarily large clients, raises concern about a lessening of competition in the audit marketplace. Using both a composite and dis-aggregated measure for auditor attributes (namely, auditor reputation, industry specialization, provision of non-audit services and auditor tenure), this study provides a comprehensive analysis of the association between four pivotal auditor attributes and the quantum of audit fees and changes in audit fees paid by Australian publicly listed firms during a five-year time frame.