Reasons for Low Audit Fees: Evidence from Bangladesh

Abstract

Law requires companies to have their accounts audited. The fee charged to an external auditor by organizations to conduct an audit is called audit fees. That form of fee is of concern to all auditors and their clients because it represents savings to businesses as well as it represents a reputation for audit service efficiency. It is evident from different studies that remuneration of auditors has a significant impact on the quality of audit performed by the auditors. In Bangladesh, audit fees are relatively poor in comparison to some other SAARC countries but independent auditors are rarely blamed for their poor quality of audit. During the study it was found that both the audit firms and the high officials of different companies have agreed at the point that the remuneration of the auditors should be as such that it can cover the cost of conducting a quality audit and at the same time act as financial motivation for the auditors. The study tried to find the intrinsic philosophy of the companies for neglecting the process of mandatory audit and hence offering poor remuneration to the auditors. Opinions of both auditors and companies have been considered here.