Why do female lead auditors charge a fee premium? Evidence from the UK audit market
Journal article
Authors | Owusu, A., O'Sullivan, N., Kwabi, F. and Holmes, M. |
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Abstract | Existing research documents a fee premium for audits led by female partners (Ittonen & Peni, 2012; Hardies et al., 2015; Burke et al., 2019; Lee et al., 2019; Hardies et al., 2021). We take this work forward by investigating a possible justification for the observed premium by examining how auditor gender is related to audit report lag and whether the female partner audit fee premium is driven by audit report lag. We find that United Kingdom companies audited by a female lead auditor have a significantly shorter audit report lag but pay a significantly higher audit fee. In further analysis, we find that the fee premium for female partner–led audits is higher for clients receiving a more timely audit opinion. Our findings are consistent with female lead auditors delivering more timely audits and with audit clients being prepared to pay a premium for such timeliness. Our study extends our understanding of the importance of gender in the auditing process and the value clients see in audits led by female auditors. Given the relatively low proportion of female lead auditors, our findings should also encourage audit firms to appreciate the economic value of female lead auditors and to actively facilitate their progression to senior roles. |
Keywords | auditor gender; audit timeliness; audit fees |
Year | 2024 |
Journal | Journal of International Accounting, Auditing and Taxation |
Journal citation | 57, pp. 1-14 |
Publisher | Elseiver |
ISSN | 1879-1603 |
Digital Object Identifier (DOI) | https://doi.org/10.1016/j.intaccaudtax.2024.100650 |
Web address (URL) | https://www.sciencedirect.com/science/article/pii/S1061951824000569 |
Accepted author manuscript | License File Access Level Open |
Publisher's version | License File Access Level Open |
Output status | Published |
Publication dates | |
Online | 11 Sep 2024 |
Publication process dates | |
Accepted | 10 Sep 2024 |
Deposited | 03 Oct 2024 |
https://repository.derby.ac.uk/item/q98q0/why-do-female-lead-auditors-charge-a-fee-premium-evidence-from-the-uk-audit-market
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Accepted author manuscript
JIAAT - Accepted Manuscript.pdf | ||
License: CC BY 4.0 | ||
File access level: Open |
Publisher's version
1-s2.0-S1061951824000569-main.pdf | ||
License: CC BY 4.0 | ||
File access level: Open |
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