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. Journal of International Accounting, Auditing and Taxation. ISSN 1061-9518 (In Press)

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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 findings are 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: Article
8 January 2024Accepted
Uncontrolled Keywords: Audit, Female audit partners, audit partners, audit report lag, audit fees
Subjects: CAH17 - business and management > CAH17-01 - business and management > CAH17-01-08 - accounting
Divisions: Faculty of Business, Law and Social Sciences > College of Accountancy, Finance and Economics > Centre for Accountancy Finance and Economics
Faculty of Business, Law and Social Sciences > College of Business, Digital Transformation & Entrepreneurship
Depositing User: Mark Holmes
Date Deposited: 26 Jan 2024 15:12
Last Modified: 20 Jun 2024 12:04
URI: https://www.open-access.bcu.ac.uk/id/eprint/15162

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