<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Unlike many studies concerning audit fees in Western Europe or the United States, literature concerning this kind of research is very limited in Central and Eastern Europe. This study aimed to show what factors shape audit fees in Poland. It was conducted based on data collected from the financial statements of 111 companies listed on the Warsaw Stock Exchange in 2018. The study used a linear regression model to verify the determinants of audit fees. The research results indicate a positive relationship between audit fees and company size, measures of complexity (in addition to the ratio of inventories and receivables to total assets) and the fact that a company is audited by the ‘Big Four’ accounting firms.</p></abstract>

Unlike many studies concerning audit fees in Western Europe or the United States, literature concerning this kind of research is very limited in Central and Eastern Europe. This study aimed to show what factors shape audit fees in Poland. It was conducted based on data collected from the financial statements of 111 companies listed on the Warsaw Stock Exchange in 2018. The study used a linear regression model to verify the determinants of audit fees. The research results indicate a positive relationship between audit fees and company size, measures of complexity (in addition to the ratio of inventories and receivables to total assets) and the fact that a company is audited by the ‘Big Four’ accounting firms.

Determinants of audit fees: Evidence from Poland

Central European Economic Journal

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Determinants of audit fees: Evidence from Poland"}

Unlike many studies concerning audit fees in Western Europe or the United States, literature concerning this kind of research is very limited in Central and...

Variables	Expected impact	Description of the variable
lnAuditFee	N/A	Natural logarithm of the amount of audit fees for conducting a mandatory audit of an entity's financial statement in the period covered by the statement (including fees for reviews of financial statements)
lnTOTALASSETS	+	Natural logarithm of the total assets
BIG4	+	Discrete variable coded as 1 if a company's auditor is Deloitte, EY, KPMG or PwC, and 0 in other cases
MERGE	+	Discrete variable coded as 1 if there was a merger or acquisition of entities forming a corporate group during a financial year and 0 in other cases
LEVERAGE	+	Company's debt to total assets ratio
Complexity	+	A company's total short- and long-term receivables and inventories
Foreign	+	The ratio of the number of foreign companies in a corporate group to the number of all companies forming the corporate group
lnSales2018	+	Natural logarithm of sales volume in 2018

Variable	Mean	Standard deviation	Min	Max
AuditFee	598,957	1,028,801	16,000	5,881,000
TOTALASSETS	5,478,254,619	12,263,775,906	34,686,420	75,905,000,000
BIG4	0.6306306	0.4848229	0	1
MERGE	0.2432432	0.4309865	0	1
LEVERAGE	0.1638752	0.1459938	0	1
Complexity	0.3086383	0.2124534	0.0061615	0.8692479
Foreign	0.2534987	0.2651958	0	0.9545455
Sales2018	4,488,839,727	11,919,499,823	17,486,560	109,706,000,000

	lnTOTALASSETS	BIG4	MERGE	LEVERAGE	Complexity	Foreign	lnSales2018
lnTOTALASSETS	1
BIG4	0.4497^*	1
MERGE	0.1461		1
LEVERAGE	0.1153	0.3038^*	0.1318	1
Complexity	−0.1528	−0.2342^*	−0.097	0.3808^*	1
Foreign	−0.0311	0.0733	−0.0311	0.118	0.0544	1
lnSales2018	0.8593^*	0.3053^*	0.1612	0.2627^*	0.0893	−0.1229	1

Determinants of audit fees: Evidence from Poland

Published Online: Aug 26, 2020

Page range: 323 - 336

DOI: https://doi.org/10.2478/ceej-2019-0020

Keywords
audit fee, statutory auditor, accounting, Warsaw Stock Exchange

© 2019 Karol Rewczuk et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Final version of the linear regression model

Description of the variables used in the study

Basic characteristics of the variables (non-logarithmic values for the variables AuditFee, TOTALASSETS and Sales2018)

Correlation between variables

Determinants of audit fees: Evidence from Poland

Published Online: Aug 26, 2020

Page range: 323 - 336

DOI: https://doi.org/10.2478/ceej-2019-0020

Keywordsaudit fee, statutory auditor, accounting, Warsaw Stock Exchange

© 2019 Karol Rewczuk et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Final version of the linear regression model

Description of the variables used in the study

Basic characteristics of the variables (non-logarithmic values for the variables AuditFee, TOTALASSETS and Sales2018)

Correlation between variables

Keywords
audit fee, statutory auditor, accounting, Warsaw Stock Exchange