Audit Partner’s Portfolio Size and Audit Fees

• In Event: E E Gore and Partner Issues

Abstract

Prior studies have documented that audit firm size and local office size are positively related to audit fees paid by the client. However, audit engagements are administered by each individual partner in the local office. Whether the partner's portfolio size can also impact audit fees is not clear. Therefore, this study investigates whether engagement partners' portfolio size is associated with audit fees. We find that there is a positive relationship between engagement partners' portfolio size and audit fees paid by the client. Furthermore, we find engagement partners’ national industry specialization is valued by the market and allows them to earn an audit fees premium. Our findings indicate that engagement partners’ portfolio size is an important determinant along with audit firm size and audit office size.

Author

• Yun Cheng, University of West Georgia