The Effect Of Client Characteristics on Audit Fee: Evidence From Nigeria

The broad objective of the study was to examine the impact of audit client attributes and variables on audit fee in Nigeria. Specifically, the study examined if client size, Profitability, Complexity, Fiscal Year end and Industry exert a significant effect on audit fees in Nigeria. The population of the study covered all quoted companies on the Nigerian Stock Exchange (NSE) from 2007-2011. The study used secondary data obtained from the published annual accounts and reports of one hundred and fifty three (153} companies from eleven (11} sectors quoted on the Nigerian stock exchange from 2007-2011. The simple random sampling technique was used in the selection of companies from the population. The variables were analyzed using descriptive and correlation analysis. Thereafter, fixed effects regression analysis was conducted. The results showed that client size, Profitability, Complexity, Fiscal Year end and Industry exert a significant effect on audit fees in Nigeria. The results seem robust despite controlling for industry of operation of the firms using dummies. The study recommended that there is the need for effective regulation of audit pricing as market framework for determining the audit fees may not readily suffice as an advantage for the fostering of auditor dependence