The pricing of audit and non-audit services in a regulated environment: a longitudinal study of the UK life insurance industry

Paul John Marcel Klumpes, Iliya Komarev, Konstantinos Eleftheriou

Research output: Contribution to journalJournal articleResearchpeer-review

7 Citations (Scopus)

Abstract

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 evidence
concerning the inter-temporal determination of audit fees.
Original languageEnglish
JournalAccounting and Business Research
Volume46
Issue number3
Pages (from-to)278-302
Number of pages15
ISSN0001-4788
DOIs
Publication statusPublished - 2016
Externally publishedYes

Keywords

  • life insurance
  • audit fees
  • actuarial fees
  • tax service fees
  • knowledge spillover
  • auditor independence
  • panel-data estimation methods

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