The Research On Determinants Of Internal Control Audit Fees

Our country has made mandatory regulation to internal control audit. But there is nounified standards for internal control audit fees. This paper studies the determinants of theinternal control audit fees to identify the influencing factors and provides theoretical basis forour country internal control audit pricing.In this paper I analyzed the influencing factors of the internal control auditing charge withGame theory, Principal-Agent theory, Market Supply and Demand theory and CostCompensation theory. The companies disclosed internal control auditing charge are theresearch samples, which were the2011domestic and overseas listed at the same time and theShanghai and Shenzhen two city Main Board listing in2012. Descriptive statistics was carriedout on the sample data in the first place. Then the company scale, corporate governance andthe complexity of the internal control, the risk for the failure of the company’s internal control,accounting firms’ reputation, areas of companies listed were carried on the multiple regressionanalysis. The results showed that, the bigger the companies, the more complex the company’sinternal control, the greater risk the internal control failure, the more the internal controlauditing fees; The better the public accounting firm reputation, the higher the brand value, themore the internal control audit fees. And the proportion of independent directors on behalf ofthe corporate governance is negatively related to the internal control audit fees, but notsignificantly. Possible reason is that the higher the proportion of independent directors cannotfully represent the high quality of the board of directors’ governance. The independence anddiligent degree of the independent directors can also play a role of the supervision, checks andbalances. The per capita net income of the location of listed company with the internal controlaudit fees is relevant, but not significantly. When measuring audit fee the Certified PublicAccountants must not be concerned about the level of economic development in the companylocation. May be they can also used local per capita disposable income of listed companies toexamine the influence of different area on the internal control audit fees. The variableselection is inappropriate and inaccurate.On the basis of the results, I put forward the relevantpolicy recommendations and further research directions.