TY - JOUR
T1 - The pricing of audit and non-audit services in a regulated environment: a longitudinal study of the UK life insurance industry
AU - Klumpes, Paul John Marcel
AU - Komarev, Iliya
AU - Eleftheriou, Konstantinos
PY - 2016
Y1 - 2016
N2 - This paper studies the relationship between audit and non-audit service fees paid to the statutory auditor by UK life insurance firms, utilising an extensive panel-data sample set for the period 1999–2009. Consistent with a knowledge spillover (impairment of independence) hypothesis, we predict and find that audit fees are positively (negatively) associated with actuarial (tax service) fees. Additionally, our results indicate that regulatory changes enforced after 2004 deterred UK life insurance firms from purchasing non-audit services that are perceived to impair auditor independence. Finally, we find evidenceconcerning the inter-temporal determination of audit fees.
AB - This paper studies the relationship between audit and non-audit service fees paid to the statutory auditor by UK life insurance firms, utilising an extensive panel-data sample set for the period 1999–2009. Consistent with a knowledge spillover (impairment of independence) hypothesis, we predict and find that audit fees are positively (negatively) associated with actuarial (tax service) fees. Additionally, our results indicate that regulatory changes enforced after 2004 deterred UK life insurance firms from purchasing non-audit services that are perceived to impair auditor independence. Finally, we find evidenceconcerning the inter-temporal determination of audit fees.
KW - life insurance
KW - audit fees
KW - actuarial fees
KW - tax service fees
KW - knowledge spillover
KW - auditor independence
KW - panel-data estimation methods
U2 - 10.1080/00014788.2015.1056719
DO - 10.1080/00014788.2015.1056719
M3 - Journal article
SN - 0001-4788
VL - 46
SP - 278
EP - 302
JO - Accounting and Business Research
JF - Accounting and Business Research
IS - 3
ER -