Audit fees in the mandatory joint audit setting: a comparative study between the European Union and the MENA region
Publication Name: Journal of Financial Reporting and Accounting
Publication Date: 2026-01-01
Volume: Unknown
Issue: Unknown
Page Range: 1-28
Description:
Purpose – This study aims to investigate audit fees for nonfinancial listed companies under mandatory joint audit regimes, comparing the effects of different joint audit pair compositions in France (EU) and Morocco (MENA region). Design/methodology/approach – Using a sample of 397 nonfinancial listed companies (349 French, 48 Moroccan) from 2014 to 2023 (3, 970 firm-year observations), this study uses multivariate regressions in Stata to examine audit fee variations across six joint audit pair types: B4B4 (two Big Four firms), B4S1 (one Big Four with one non-Big Four international), B4S2 (one Big Four with one local), S1S1 (two non-Big Four international), S1S2 (one non-Big Four international with one local) and S2S2 (two local). Findings – Results reveal significant differences in audit fees across joint audit pairs in both France and Morocco, regardless of pair type or firm size. Notably, fees are consistently higher in France, which has stronger investor protection, than in Morocco. In terms of pair ranking in France, B4B4FR commands the highest fees, followed by B4S1FR and B4S2FR. There is no significant fee difference between B4B4FR and B4S1FR, supporting the preference for joint Big Four pairs among large companies. By contrast, in Morocco, B4B4MO has the highest fees, followed by B4S2MO; B4S1MO has the lowest. Non-Big Four pairs (S1S1, S1S2 and S2S2) show no significant fee differences in either country, suggesting that medium-sized companies rationally select two non-Big Four international auditors. Further analysis shows that, in France, Big Four premiums and interpair fee gaps narrow as firm size increases. Conversely, in Morocco, B4B4MO and S1S1MO are more competitively priced for small firms, while B4S1MO targets larger firms. Regarding industry specialization, it generally raises fees – except in B4S2 and S1S1 pairs (no effect) and in B4S1FR, where it reduces fees. Practical implications – This study offers significant insights for investors, policymakers and companies involved in joint audit frameworks, as well as those considering implementing joint audits, through an in-depth analysis of a crucial issue in joint auditing. Originality/value – To the authors’ knowledge, this is the first comparative study of joint audit fees for nonfinancial companies in mandatory regimes across developed (France) and emerging (Morocco) markets. It classifies joint audit pairs into six categories and investigates the effects of company size and auditor industry specialization on these fees.
Open Access: Yes