The investigation of the relationship between agency cost and auditing fees

This study has investigated the effect of general factors and agency cost indexes on auditing fees.Multivariate regression model was used for testing. Independent variables include percent ownership of the first major stockholder, percent ownership of the state institution, total liabilities and assets ratio and non duty members of the board and all members of the board ratio as agency cost indexes. The control variables are log total accounts receivable and operational revenue, total account receivable and assets ratio, pre- tax and interest income and assets ratio and the end of fiscal year thataffect on auditing fees as a dependent variable. The main hypothesis investigates existence of a significant relationship between agency cost indexes and auditing fees. The needed information of study and correlation test for dependent and independent variables collected from firms listedin Tehran exchange for the period of 2006 – 2010. The results of study indicate that there is a significant relationship between agency cost indexes and auditing fees.