IFRS adoption and the effect it has on auditor fees and auditor choice

Abstract

Our study contributes to the understanding of IFRS adoption by examining the effect it has on audit fees and auditor choice in Norway. Using a regression model, we first analyze the effects that transitioning from NGAAP to IFRS will have on audit fees. Secondly, we use the Heckman two-stage model method to examine the effects on auditor choice. Our findings show a decrease in audit fees upon transitioning from NGAAP to IFRS, followed by an increase in audit fees in the subsequent years. Additionally, we find that the transition to IFRS leads to a higher likelihood of choosing a Big 5 auditor.