Audit fees and Book-Tax Differences
DOI:
https://doi.org/10.11606/rco.v11i31.134473Keywords:
Audit fees. Book-Tax Differences. Audit risks.Abstract
Differences between book and taxable income, internationally denominated Book-Tax Differences (BTD), can affect auditor’s risks and efforts, raising audit fees. Thus, this article aims research is to verify if there is a relationship between the BTD types and the audit fees that were paid by the Brazilian public companies in the period from 2010 to 2014. Different from the international studies, only positive BTD (book income greater than the taxable income) was related to audit fees. The higher level of earnings management and tax evasion, which generate positive BTD, historically present in civil law countries may justify this difference in results regarding other observed countries. Positive BTD can represent a "red flag" for auditors, investors, analysts, and regulators to assess the quality of accounting information. The article argues the relevance of enhance the analysis of audit fees and types of BTD, in different economic activities and countries’ legal origin.
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