AUTOMATED ACCOUNTING SYSTEM AND EXTERNAL AUDIT FEES: EMPIRICAL EVIDENCE FROM NIGERIA
Abstract:The recent development in electronic accounting has had dramatic influence on every aspect of external audit process especially on audit fee. The study therefore aims to examine the effect of automated accounting system (AAS) audit fee with focus on common audit client’s characteristics. Descriptive research design was employed and a four Likert’s scale structured questionnaire was randomly distributed to five hundred and fourteen auditors in private practice while three hundred and eighty nine were returned but only three hundred and sixty two found valid and subjected to analysis. Multiple Least Square was applied to test the first three hypotheses while the last was subjected to Partial Lest Square - Structural Equation Model (PLS-SEM). The results revealed that AAS has positive and significant effect on audit fees in relation to client’s complexity, size and profitability while there is substantial, positive and significant effect of AAS on audit fee. The study therefore recommends that audit clients should brace up for higher audit fee in this era of accounting automation and in accordance with Social Exchange Theory, for to do otherwise will not only harm audit firms but also audit clients.