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Meshari O. Al-Hajri
67
SBE, Vol.20, No.1, 2017
ISSN 1818-1228
©Copyright 2017/College of Business and Economics,
Qatar University
shown in Table 3, the regression coefficient
of the IA variable is statistically significant
(p-value < .057), and has the expected negative
sign. This result provides support to the
research hypothesis that IA contribution in the
external audit work would be associated with a
reduction in the amount of external audit fees.
As for the other independent variables, except
for the SIZE variable, the coefficients of the
control variables included in the researchmodel
are statistically insignificant. In particular, the
regression results show that the coefficient of
the SIZE variable is statistically significant
((p-value < .006) and has the predicted positive
FEE = b0 + b1 IA + b2 SIZE + b3 LOCAT + b4 QUICK + b5 LEVER + b6 ROA + b7 NAS
+ b8 BIG4 + b9 TENURE
Variable
Predicted Sign
Estimated
Coefficient
t
-statistic
p
-value
VIF
Intercept
4.001
3.252
0.003
IA
-
-0.007
-1.997
0.057*
1.383
SIZE
+
0.22
2.985
0.006***
1.878
LOCAT
+
0.408
0.865
0.396
1.184
QUICK
-
0.037
0.728
0.473
1.188
LEVER
+
0.376
0.685
0.499
1.83
ROA
-
-0.028
-1.009
0.323
1.382
NAS
?
0.507
1.473
0.153
1.118
BIG4
+
-0.135
-0.402
0.691
2.543
TENURE
-
0.156
0.863
0.396
2.123
Table 3. Regression Results
Regression summary statistics:
n = 35
R-square = .539
F-statistics =3.244
***, **, * p-value of statistical significance at the 0.01, 0.05, and 0.10 levels, respectively.
Note:
FEE : the natural log of total audit fees;
IA : External auditor’s assessment of the percentage of external audit work
performed by the audit client’s internal audit staff.
SIZE : the natural log of the audit client’s total assets;
LOCAT : the natural log of the number of audit locations visited by the audit team;
QUICK : the audit client’s current assets minus inventories to current liabilities;
LEVER : ratio of client’s total long-term debt to the total Assets.
ROA : ratio of the audit client’s net income to total assets.
NAS : a dummy variable, taking the value of one if the audit firm provides non-audit
services to the audit client, and zero otherwise.
BIG4 : a dummy variable taking the value of one if the audit firm is EY, PWC, KPMG,
or Deloitte.
TENURE : the number of years the audit client is continuously auditing the audit client.