Managing the impact of international financial reporting standards on audit and non-audit fees: Some empirical findings and ethical discussions

The aim of this study is to examine the association between IFRS adoption (in the context of Malaysia, MASB aligns its standards substantially with the IFRS requirements and called the standards as MFRS) and audit and non-audit fees paid to external auditors in Malaysia. The sample companies are 166...

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Main Authors:	Abdul Rashid, Hafiz Majdi, Wan Lokman, Wan Abdul Wahid, Annuar, Hairul Azlan, Hamdan, Hamdino
Format:	Article
Language:	English
Published:	Universiti Tenaga Nasional. 2017
Subjects:	HF5601 Accounting. Bookkeeping
Online Access:	http://irep.iium.edu.my/63821/ http://irep.iium.edu.my/63821/ http://irep.iium.edu.my/63821/7/63821%20Managing%20the%20Impact%20of%20International%20Financial%20Reporting%20Standards.pdf

id	iium-63821
recordtype	eprints
spelling	iium-638212018-05-24T02:02:54Z http://irep.iium.edu.my/63821/ Managing the impact of international financial reporting standards on audit and non-audit fees: Some empirical findings and ethical discussions Abdul Rashid, Hafiz Majdi Wan Lokman, Wan Abdul Wahid Annuar, Hairul Azlan Hamdan, Hamdino HF5601 Accounting. Bookkeeping The aim of this study is to examine the association between IFRS adoption (in the context of Malaysia, MASB aligns its standards substantially with the IFRS requirements and called the standards as MFRS) and audit and non-audit fees paid to external auditors in Malaysia. The sample companies are 166 companies listed on Bursa Malaysia for the financial year ended 2006 (i.e. the first year which the MASB converged its standards to IFRS). The results reveal that IFRS adoption is positively and significantly associated with statutory audit fees. The results are consistent with the literature which suggests IFRS adoption will result in increased scope of work and responsibility of the external auditors, which finally entails additional costs. However, there is no evidence to support the hypothesis that non-audit fees are positively and significantly associated with IFRS adoption. Therefore, the suspected ethical dilemma on auditor independence in the case of IFRS adoption is not supported by the empirical results. Hence, in order to control the potential increase in audit fees charged, the accounting regulators such as Malaysia Institute of Accountants (MIA) and Malaysia Accounting Standard Board (MASB) should provide clearer guidelines in interpreting and understanding the newly adopted IFRS. Universiti Tenaga Nasional. 2017 Article PeerReviewed application/pdf en http://irep.iium.edu.my/63821/7/63821%20Managing%20the%20Impact%20of%20International%20Financial%20Reporting%20Standards.pdf Abdul Rashid, Hafiz Majdi and Wan Lokman, Wan Abdul Wahid and Annuar, Hairul Azlan and Hamdan, Hamdino (2017) Managing the impact of international financial reporting standards on audit and non-audit fees: Some empirical findings and ethical discussions. International Journal Business Management, 2 (2). pp. 1-17. ISSN 0127-9815 E-ISSN 0127-9890 http://www.uniten.edu.my/ijbm/Journals/IJBM%20Volume%202%20Issue%202%202017/1%20Managing%20the%20Impact%20of%20International%20Financial%20Reporting%20Standards.pdf
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HF5601 Accounting. Bookkeeping
spellingShingle	HF5601 Accounting. Bookkeeping Abdul Rashid, Hafiz Majdi Wan Lokman, Wan Abdul Wahid Annuar, Hairul Azlan Hamdan, Hamdino Managing the impact of international financial reporting standards on audit and non-audit fees: Some empirical findings and ethical discussions
description	The aim of this study is to examine the association between IFRS adoption (in the context of Malaysia, MASB aligns its standards substantially with the IFRS requirements and called the standards as MFRS) and audit and non-audit fees paid to external auditors in Malaysia. The sample companies are 166 companies listed on Bursa Malaysia for the financial year ended 2006 (i.e. the first year which the MASB converged its standards to IFRS). The results reveal that IFRS adoption is positively and significantly associated with statutory audit fees. The results are consistent with the literature which suggests IFRS adoption will result in increased scope of work and responsibility of the external auditors, which finally entails additional costs. However, there is no evidence to support the hypothesis that non-audit fees are positively and significantly associated with IFRS adoption. Therefore, the suspected ethical dilemma on auditor independence in the case of IFRS adoption is not supported by the empirical results. Hence, in order to control the potential increase in audit fees charged, the accounting regulators such as Malaysia Institute of Accountants (MIA) and Malaysia Accounting Standard Board (MASB) should provide clearer guidelines in interpreting and understanding the newly adopted IFRS.
format	Article
author	Abdul Rashid, Hafiz Majdi Wan Lokman, Wan Abdul Wahid Annuar, Hairul Azlan Hamdan, Hamdino
author_facet	Abdul Rashid, Hafiz Majdi Wan Lokman, Wan Abdul Wahid Annuar, Hairul Azlan Hamdan, Hamdino
author_sort	Abdul Rashid, Hafiz Majdi
title	Managing the impact of international financial reporting standards on audit and non-audit fees: Some empirical findings and ethical discussions
title_short	Managing the impact of international financial reporting standards on audit and non-audit fees: Some empirical findings and ethical discussions
title_full	Managing the impact of international financial reporting standards on audit and non-audit fees: Some empirical findings and ethical discussions
title_fullStr	Managing the impact of international financial reporting standards on audit and non-audit fees: Some empirical findings and ethical discussions
title_full_unstemmed	Managing the impact of international financial reporting standards on audit and non-audit fees: Some empirical findings and ethical discussions
title_sort	managing the impact of international financial reporting standards on audit and non-audit fees: some empirical findings and ethical discussions
publisher	Universiti Tenaga Nasional.
publishDate	2017
url	http://irep.iium.edu.my/63821/ http://irep.iium.edu.my/63821/ http://irep.iium.edu.my/63821/7/63821%20Managing%20the%20Impact%20of%20International%20Financial%20Reporting%20Standards.pdf
first_indexed	2023-09-18T21:30:31Z
last_indexed	2023-09-18T21:30:31Z
_version_	1777412479773573120

Managing the impact of international financial reporting standards on audit and non-audit fees: Some empirical findings and ethical discussions

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