2026-09-22

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Audit Fees Comparison Between Designated and Free-Engaged Auditors

A recent study investigates the differences in audit fees between designated auditors and those engaged freely, as well as the key factors influencing designated audit fees. The research, conducted by…

RESEARCH: Audit Fees Comparison Between Designated and Free-Engaged Auditors

Summary

A recent study investigates the differences in audit fees between designated auditors and those engaged freely, as well as the key factors influencing designated audit fees. The research, conducted by 신용준 and 김은 from 건국대학교, examines the endogeneity between audit fees and audit hours and finds that designated auditors charge higher fees on average, with audit hours being the primary determinant of these fees over firm asset size.

Key Developments

  • 2010-03-?? — It was found that designated auditors' audit fees are higher than those of free-engaged auditors on average. This result persisted even after controlling for endogeneity using 2SLS analysis. Korean Open Access Journals
  • 2010-03-?? — No significant difference in audit fees was observed between BIG4 and NonBIG4 auditors for designated audits, contrary to expectations based on reputation differences. Korean Open Access Journals
  • 2010-03-?? — Designated auditors set higher fees for firms with high audit risk due to accounting issues, receiving more compensation for these high-risk firms. This finding held after controlling for endogeneity. Korean Open Access Journals
  • 2010-03-?? — Audit fees increased with audit hours, even after accounting for endogeneity. Korean Open Access Journals
  • 2010-03-?? — Audit hours were identified as the most critical factor in determining designated audit fees, surpassing firm asset size as the key determinant. Korean Open Access Journals

Sources