Why Do Female Lead Auditors Charge a Fee Premium? Evidence from the UK Audit Market

Owusu, Andrews and O'Sullivan, Noel and Kwabi, Frank and Holmes, Mark (2024) Why Do Female Lead Auditors Charge a Fee Premium? Evidence from the UK Audit Market. Working Paper 26. Centre for Accountancy Finance and Economics (CAFE), Birmingham City Business School, Birmingham City University. (Submitted)

Owusu et al - CAFE WP26 - Why do Female Lead Auditors Charge a Fee Premium.pdf - Accepted Version

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Existing research documents a fee premium for female partner led audits (Ittonen & Peni, 2012; Hardies et al., 2015; Burke et al., 2019; Lee et al., 2019; Hardies et al., 2021). We take this work forward by investigating a possible justification for the observed premium by examining how auditor gender is related to audit report lag and whether the female partner audit fee premium is driven by audit report lag. We find that firms audited by a female lead auditor have a significantly shorter audit report lag but pay a significantly higher audit fee. In further analysis, we find that the fee premium for a female partner led audits is higher for clients receiving a more timely audit opinion. Our findingsare consistent with female lead auditors delivering more timely audits and audit clients being prepared to pay a premium for such timeliness. Our study extends our understanding of the importance of gender in the auditing process and the value clients see in audits led by female auditors. Given the relatively low proportion of female lead auditors, our findings should also encourage audit firms to appreciate the economic value of female lead auditors and to actively facilitate their progression to senior roles.

Item Type: Monograph (Working Paper)
Identification Number: 26
23 January 2024Accepted
Uncontrolled Keywords: female auditors, audit partners, audit report lag, audit fee premium, UK audit market,
Subjects: CAH15 - social sciences > CAH15-01 - sociology, social policy and anthropology > CAH15-01-03 - social policy
CAH17 - business and management > CAH17-01 - business and management > CAH17-01-08 - accounting
Divisions: Faculty of Business, Law and Social Sciences > Birmingham City Business School > Centre for Accountancy Finance and Economics
Depositing User: Mark Holmes
Date Deposited: 24 Jan 2024 10:59
Last Modified: 24 Jan 2024 10:59
URI: https://www.open-access.bcu.ac.uk/id/eprint/15160

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