The impact of audit committee characteristics on audit fees : evidence from Ghana

The purpose of the study was to establish the impact of audit committee characteristics on audit fees from listed companies in Ghana. Audit committee size, gender diversity, meeting, and financial expertise were adopted to measure audit committee characteristics against the fees charged by the audit firms. The study utilized a different set of empirical specifications on standard panel data, particularly to address the endogeneity issues of the extant literature on the audit fees-audit committee characteristics nexus condone. Applying the IV-2SLS and two-step dynamic GMM estimators, which are robust to endogeneity issues, we present evidence that audit committee size, gender diversity, audit meetings, and financial expertise are associated with lower audit fees. We also find evidence that the magnitude of the impact of the audit committee characteristics on audit fees is more pronounced in financial firms than non-financial firms. We interpret this insight as suggesting that highly regulated firms such as financial firms with audit committees incur relatively lower audit costs.