Authors: Jihong Liu
Addresses: School of Management, Huazhong University of Science and Technology, 1037 Luoyu Road, Wuhan, 430074, PR China
Abstract: Developing audit-pricing models is useful to regulators, practitioners, and researchers for understanding the basis and rationale for audit pricing or audit fee. Previous studies have been carried out to investigate the determinants of audit fee, but endogenous nature of the regressors and multicollinearity cause that many important determinants of audit pricing have been omitted because almost all of them use Ordinary Least Square to build their models. Therefore, this study uses the sample of Market A of China to empirically research audit-pricing. The empirical results show that Wold|s Partial Least Squares can build a better audit-pricing model.
Keywords: audit pricing; audit fee; determinants; partial least squares; PLS; China; public accounting.
International Journal of Services, Economics and Management, 2007 Vol.1 No.1, pp.36 - 54
Published online: 07 Jan 2008 *Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article