ABSTRACT
Corporate managements induce auditors through fees to alter the financial performance and position of their entities. These practices led to the studies on the determinants of audit fees in developed and developing economies. This study examined the determinants of audit fees of listed food and beverages firms in Nigeria. Correlational research design was employed on a sample of nine (9) listed food and beverages firms in Nigeria for a period of ten (10) years (2004-2013). Panel regression techniques of estimation were used in the analysis.
The study found after controlling for firm profitability a significant positive relationship between audit firm size, auditor tenure, firm size and audit fees of listed food and beverages companies in Nigeria during the period covered by the study. The study in particular found that audit firm size has significant positive impact on audit fees of listed food and beverages firms in Nigeria. The study also found that auditor tenure has significant positive influence on audit fees. Moreover, the study found that client firm size has a significant positive impact on the audit fees of listed food and beverages firms in Nigeria.
While firm complexity is found to be positive but statistically insignificant. The study concludes that audit firm size, auditor tenure and client firm size are significant determinants of auditor fees in the Nigerian food and beverages sector. The study, therefore, recommends that the regulators of the food and beverages firms in Nigeria should improve the guidelines for employing the services of external auditors and their remuneration, and consider firm size, auditor size and tenure as well as the firm profitability among the factors in the determination of auditors' fees.
