Internal Auditing Outsourcing, Nonaudit Services, and Audit Fees


Abdul Wahab, Effiezal Aswadi and Gist, Willie. E. and Gul, Ferdinand A. and Mat Zain, Mazlina (2021) Internal Auditing Outsourcing, Nonaudit Services, and Audit Fees. AUDITING: A Journal of Practice & Theory, 40 (2). pp. 23-48. ISSN 0278-0380, 1558-7991

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This study examines the relationship between outsourced internal audits, nonaudit services, and audit fees. We use Malaysian data to show that client firms that outsource their internal auditing function (IAF) are associated with lower external audit fees than those with in-house IAF. Moreover, this negative relationship is significantly stronger for firms that purchase greater amounts of nonaudit services (NAS) from the auditor. The results suggest that an auditor who provides NAS to a client and thus earns additional overall revenue is willing to accept lower audit fees provided a high audit quality can be achieved through reliance on outsourced IAF.

Item Type: Article
Uncontrolled Keywords: Management audit
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28-70 Management. Industrial Management > HD58.7-58.95 Organizational behavior, change and effectiveness. Corporate culture
Divisions: Faculty of Management (FOM)
Depositing User: Ms Nurul Iqtiani Ahmad
Date Deposited: 30 Aug 2021 11:21
Last Modified: 30 Aug 2021 11:21


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