Determinants of Audit Fees in Malaysia's Top 100 Listed Companies: An Empirical Study

This paper examines the determinants of audit fees in a sample of top 100 companies listed in Bursa Stock Exchange in Malaysia; market capitalization of these companies is about 85% of the total market capitalization at the end of 2012. The authors collected data from the annual reports of the companies for the year 2012, and analyzed it using a multiple regression model. The authors report that firm size, profitability, and ownership structure are the main determinants of audit fees in Malaysia. Additionally, profitability shows a negative and significant relationship, which is also in line with findings of the most recent studies. The results also indicate that there is no Big 4 premium in audit fees in Malaysia; interestingly, the relationship though insignificant is negative. The adjusted R square is approximately 47% and there were no multicollinearity issues among the variables. The study makes an incremental contribution to the literature on audit fees in the Malaysian context.