The impact of corporate tax risk on audit pricing

Auditors use several factors for pricing of audit services. Theoretically, risk and complexity of the corporate are the main factors affecting audit fees. The purpose of this study is to evaluate the impact of corporate tax risk on audit fees. This risk is Quantificated through the Company's effective tax rate. In this regard, if the effective tax rate is lower, tax avoidance is considered higher. For this purpose, a sample of 62 companies listed in TSE from 2009 to 2014 is selected. Hypotheses have been examined using regression analysis. Results show that a significant negative (positive) correlation exists between effective tax rate (corporate tax risk) and audit fees. In other words, if the corporate tax risk is higher, audit fee will be more. Furthermore the results reveal a significant positive relationship between firm size and reported loss with the audit fees and Negative significant relationship between financial leverage and unqualified audit opinion with the audit fees.