The Determinants of Audit Fees in Rural And Community Banks in Ghana: An Empirical Analysis
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| Title | The Determinants of Audit Fees in Rural And Community Banks in Ghana: An Empirical Analysis |
| Authors | |
| Abstract | In Ghana, non-bank financial institutions, community and rural banks have had their fair share of financial scandals. Presently, the Bank of Ghana has introduced a policy that makes it compulsory for the accounts of all community, rural and non-bank financial institutions in Ghana to be audited by a recognized auditing and accounting entity. Despite the fact that this initiative has consolidated investor confidence in community and rural banks in Ghana, it has also come with a significant burden on the finances of such entities since audit fees in Ghana appear to be on the higher side compared to those in other West African countries in Sub-Saharan Africa. This research examined the relationship between audit fees charged in community and rural banks and turnover, profit, total assets, employee number and auditor type on another hand. This study sampled data from 103 community and rural banks in Ghana with submitted audited accounts for the period 2012 to the ARB Apex Bank and the Bank of Ghana. The study findings suggest the existence of a significant relationship between the audit fees and all of the above factors but the direction of effect is not the same. An increase in total assets by one unit will increase the estimated audit fees while an increase in the employee number by one unit (one employee) will likewise increase the estimated audit fee. However, within the context of auditing in rural and community banks in Ghana an increase in the profit by one unit will decrease the estimated audit fees and then being audited by one of the Big four(4) auditing firms (namely PricewaterhouseCoopers, Deloitte & Touche Tohmatsu Limited, Ernst & Young (EY) and KPMG) will decrease the estimated audit fees. |
| Publisher | International Journal of Business and Social Research |
| Date | 2013-07-03 |
| Source | 2164-2540 |
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