24 February, 2021

Audit fees increase when foreign investors become majority owners

European study finds that audit fees are 10.5% higher where the largest owner is foreign rather than domestic.

Image: Rawpixel.com/Shutterstock

While there is much attention on audit and whether it's working, there has been less focus on fees. Researchers investigating the cost of audit in Europe believe the price tag rises when foreign investors come on board. Academics in France and Germany looked at what happened to audit costs when European companies saw foreign investors become their largest owners. They found that fees were 10.5% higher where the largest owner is foreign rather than domestic. The study, by Paul Pronobus of ESCP Business School and Jonas Schaeuble of the Magdeburg-Stendal University, concludes that higher audit costs reflect foreign investors seeking high-

Want to read more? Register with a few details to continue reading this article or log in.

For thoughtful journalism, expert insights on corporate governance and an extensive library of reports, guides and tools to help boards and directors navigate the complexities of their roles, subscribe to Board Agenda

audit, corporate governance, Europe, foreign investment, investors, research