The effect of accounting standards preparation approaches on the audit fees : an applied study

Abstract EN

The objective of this research is to measure the impact of the approaches to preparing accounting standards, accounting standards based on IFRS principles and accounting standards based on rules based on GAAP, on audit fees.

Whereas, International Financial Reporting Standards are principles-based standards developed by the International Accounting Standards Board (IASB) to promote consistency of accounting principles and reflect clear global accounting principles that aim to improve the quality of financial reporting, encourage international investment and promote global economic growth.

Where the researcher designed a survey list and distributed it to the research sample, which numbered (132), and the basic principle when designing the survey list was that it should be focused in order to obtain clear and sufficient responses.

After that, the data collected through the survey form were collected, unloaded and analyzed using the statistical program for social sciences (SPSS V26).

The results showed that IFRS and GAAP based accounting standards affect audit fees with a determination factor of 55% and 39% , respectively.

The results of the theoretical research indicated that IFRS-based accounting standards are more extensive and complex than GAAP-based accounting standards.

Therefore, the results of applied research support that the adoption of international financial reporting standards has an impact on the audit process fees, as auditors need increased efforts to provide their services to companies that International Financial Reporting Standards are used to reduce the risk of litigation.

Accordingly, this will result in increased audit fees as auditors are likely to charge a premium to their clients to reward efforts and complementary risks.