Determinants of Audit Fees for Firms Listed at the Nairobi Securities Exchange

Abstract

The objective of the study was to find out the determinants of audit fees for firms listed in the NSE. The analysis revealed. that the audit market for listed firms is dominated by the Big 4 firms and most companies (72.9%) financial years end at December 31. The multiple linear regression results revealed that auditor experience; auditor reputation; client size; and client complexity had positive and significant relationships with audit fees for Kenyan firms. On the other hand, a negative relationship was documented with size of the audit firm and client profitability. The results, however, did not support any relationship between audit fees; client risk and the reporting season.

Keywords: Audit fees; Auditor characteristics; Auditee characteristics; Big 4