AUDIT FEES AND PROVISION FOR NAS ARE THREATS TO AUDITOR INDEPENDENCE?

Jeya Santhini Appannan; Nurakmar Mohamad Salleh; Annie Yong Ing Ing

Jeya Santhini Appannan Universiti Tunku Abdul Rahman, Malaysia
Nurakmar Mohamad Salleh Universiti Tunku Abdul Rahman, Malaysia
Annie Yong Ing Ing Universiti Tunku Abdul Rahman, Malaysia

Keywords: Auditors's independence; Audit fees; provision of non-audit services (NAS); Malaysia

Abstract

Auditor independence is expected to give an unbiased and honest professional opinion on the financial statements to the shareholders. Impairment of an auditor independence erodes public confidence in capital markets. Along this it will lead to an audit failure, diminish of credibility of the opinions and reports given by auditors in relation with financial audits. Our study enriches the literature by connecting between audit fees and provision for non- audit services (NAS) by examining its link on auditor independence. This study makes two contributions. First, the finding is expected to provide a guide to develop or modify the existing model of audit fee determinants in Malaysia and secondly provide suggestion for issues that may be addressed in future research on the topic.

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