An Analysis of Audit Fees Following the Passage of Sarbanes-Oxley

Asia-Pacific Journal of Accounting and Economics, Forthcoming

Posted: 16 May 2007

See all articles by Paul A. Griffin

Paul A. Griffin

University of California, Davis - Graduate School of Management

David H. Lont

University of Otago - Department of Accountancy and Finance

Abstract

This study analyzes audit fees following SOX, in particular, the residual increase in audit fees controlling for those factors predicted to change such fees but for the Act. We find significant relations between residual audit fees and incremental audit risk, audit effort, and auditor changes. These factors are noticeably more influential in the period following SOX that includes the implementation of section 404 on internal control. Our results imply that SOX most likely caused an increase in the auditing profession's share of the risk of defective financial statements and client companies' resources to audit a costlier accounting system.

Keywords: Sarbanes-Oxley, audit fees, SEC certification, section 404, internal control

JEL Classification: C30, K22, L80, M41, M49, G38

Suggested Citation

Griffin, Paul A. and Lont, David H., An Analysis of Audit Fees Following the Passage of Sarbanes-Oxley. Asia-Pacific Journal of Accounting and Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=986841

Paul A. Griffin

University of California, Davis - Graduate School of Management ( email )

3102 Gallahger Hall
Davis, CA 95616
United States
(530) 752-7372 (Phone)
(425) 799-4143 (Fax)

HOME PAGE: http://www.gsm.ucdavis.edu/griffin/

David H. Lont (Contact Author)

University of Otago - Department of Accountancy and Finance ( email )

Box 56
Dunedin, Otago 9054
New Zealand
+64 3 479 8119 (Phone)
+64 3 479 8171 (Fax)

HOME PAGE: http://www.business.otago.ac.nz/acty/

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