The Impact of IFRS Adoption on Audit Fees and the Industry Specialist Fee Premium: A New Zealand Study
Date Issued
2015
Date
2015
Author(s)
Hung, Chi-Wen
Abstract
In December 2002, the New Zealand Accounting Standards Review Board announced that New Zealand entities’ financial reports would have to comply with International Financial Reporting Standards (IFRS) from 1 January 2007. Prior literature has found an increase in audit fees after the adoption of IFRS in Australia, Malaysia and countries in the European Union. This paper extend these literatures by looking at the audit fee impact of IFRS adoption in New Zealand, a country rather unique and isolated from other countries. In addition, I analyze the impact of IFRS adoption on the industry specialist fee premium, a premium that audit firms receive for their expertise knowledge in an industry. This paper conducts the research over a five-year period, from 2006 to 2010, and finds that audit fees increased in the year of IFRS adoption as well as in the subsequent years. This paper also finds that an industry specialist fee premium exists at the national level in New Zealand. Additionally, the adoption of IFRS increased the industry specialist fee premium.
Subjects
audit fees
industry specialist fee premium
IFRS adoption
New Zealand
Type
thesis
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