We provide evidence that distinguishes between competing production cost-based explanations of how to interpret unusually high (or low) audit fees and their expected relation with accounting quality. Abnormally high or low fees are typically proxied by the residuals obtained from fee models....

The interim reporting process provides decision-useful information to investors and market participants. However the legal circumstances of external interim auditor reviews differ worldwide. A mandatory review rule in the US as opposed to a contrary decision of the German legislator raises the...

We examine the effect of interpretive accounting guidance on a direct and observable cost of financial reporting: audit fees. Many contend that U.S. GAAP has too much interpretive guidance, making it complex and difficult to assimilate. This effect would lead to higher audit effort and higher...