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Governance regulatory changes, International Financial Reporting Standards adoption, and New Zealand audit and non-audit fees: empirical evidence
Paul A. Griffin,
David H. Lont,
Yuan Sun,
Paul A. Griffin
Graduate School of Management, University of California, Davis, Davis, CA 95616, USA
Search for more papers by this authorDavid H. Lont
School of Business, University of Otago, Dunedin, 9054, New Zealand
Search for more papers by this authorYuan Sun
Haas School of Business, University of California Berkeley, Berkeley, CA 94720-1900, USA
Search for more papers by this authorPaul A. Griffin,
David H. Lont,
Yuan Sun,
Paul A. Griffin
Graduate School of Management, University of California, Davis, Davis, CA 95616, USA
Search for more papers by this authorDavid H. Lont
School of Business, University of Otago, Dunedin, 9054, New Zealand
Search for more papers by this authorYuan Sun
Haas School of Business, University of California Berkeley, Berkeley, CA 94720-1900, USA
Search for more papers by this authorWe thank two anonymous Accounting & Finance reviewers, David Hay, Gary Monroe, Paul Theivananthampillai, Ros Whiting, and Roger Willett for their useful comments and suggestions. We also thank participants at the presentations at the University of Otago (Dunedin, New Zealand, 2 July 2008) and the 2008 Accounting and Finance Association of Australia and New Zealand (AFAANZ) conference (Sydney, NSW, 7 July 2008). Any errors and omissions remain the responsibility of the authors. We thank the New Zealand Institute of Chartered Accountants for a travel grant to attend the 2008 AFAANZ conference.
Abstract
This study examines the association between overseas and New Zealand governance regulatory reforms and New Zealand companies’ audit and non-audit fees. Our models use temporal and International Financial Reporting Standards (IFRS) indicator variables to relate the timing of the fee changes to the incidence of the overseas and local reforms. We find that audit fees increased in New Zealand over 2002–2006. Such increases associate reliably with the transition to and adoption of NZ IFRS and not with earlier overseas governance reforms. Our study also documents a decrease in non-audit fees over the same period, but we find no IFRS effect for non-audit fees.
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