Are Audit Fees Discounted in Initial Year Audit Engagements? Further Evidence From U.S.-Traded Foreign Companies

Authors

• Ting Chiao Huang, Monash University
• Hua Wei Huang, National Cheng Kung University
• Stephanie Hairston, Georgia Southern University

Document Type

Article

Publication Date

2-5-2026

Publication Title

Journal of Accounting, Auditing and Finance

DOI

10.1177/0148558X261422898

Abstract

This paper investigates whether initial-year audit fee discounting occurs in U.S.-traded foreign companies. Using a sample of 5,568 company-years from 2007 to 2018, we find evidence of fee discounting after accounting for measurement bias identified by Barua et al. (2020). Our analysis also suggests that the extent of discounting varies based on regulatory environments and the economic significance of these companies to their auditors, including both audit and nonaudit services. However, we find mixed evidence on whether fee discounting impacts audit quality.

Comments

Publisher Copyright: © The Author(s) 2026

Recommended Citation

Huang, Ting Chiao, Hua Wei Huang, Stephanie Hairston. 2026. "Are Audit Fees Discounted in Initial Year Audit Engagements? Further Evidence From U.S.-Traded Foreign Companies." Journal of Accounting, Auditing and Finance. doi: 10.1177/0148558X261422898
https://digitalcommons.georgiasouthern.edu/account-facpubs/188

Copyright

Publisher Copyright: © The Author(s) 2026