The determinants of audit fees in the alternative investment market (Aim) in the UK: Evidence on the impact of risk, corporate governance and auditor size

This study examines the determinants of audit fees for companies listed on Alternative Investment Market (AIM) in United Kingdom (UK), which is secondary market London Stock Exchange small and medium sized companies. AIM are expected to present different pricing challenges compared fully firms. From an demand perspective, exhibit risk governance characteristics while, from a supply characterized by greater auditor choice than typically found main markets. We find that negatively influenced client liquidity length listing. also higher levels committee disclosures associated with fees, although there no evidence individual influence fees. After controlling self-selection bias, we Big 4 auditors charge this premium especially pronounced smaller Our findings contribute literature illustrating depends institutional setting operate as well highlighting importance specific measures size determination