An empirical investigation of audit fees in the us for-profit healthcare sector

Abstract

The purpose of this paper is to analyze the market for audit services for publicly traded companies operating in the US for-profit (FP) healthcare sector. Complex national and local healthcare laws and regulations suggest the importance of assessing fee effects of joint nationallevel and city-specific expertise among auditors. Using cross-sectional OLS regression analysis, we find that joint expertise significantly affects audit pricing in the healthcare sector. We find a fee premium of 33.6 percent on engagements where auditors are both national and city-specific specialists. We also find that Big-4 auditor reputation is significantly priced over and above the effects of joint auditor expertise, and a significant positive association exists between audit and non-audit service fees-indicating the presence of knowledge spillover effects among healthcare company auditors.

Citation

(Charlie) Yuan, X., López, D.M. and Forgione, D.A. (2012), "An empirical investigation of audit fees in the us for-profit healthcare sector", Journal of Public Budgeting, Accounting & Financial Management, Vol. 24 No. 4, pp. 639-652. https://doi.org/10.1108/JPBAFM-24-04-2012-B006