Effect of Ownership Structure on External Audit Fees: Evidence from Jordan

Ja’afar Sulaiman Abuyahia, Ali Al- Thuneibat


The objective of this study is to investigate the effect of ownership structure of industrial and service companies listed in Amman Stock Exchange on audit fees. To measure the structure of ownership, the researchers used four variables; namely, foreign ownership, institutional ownership, managerial ownership and ownership concentration.
To collect the data of the study, a sample of (86) companies listed in Amman Stock Exchange during the period from (2010) to (2014) was used. The sample consisted of 43 companies from the industrial sector and 43 companies from the service sector. Multiple regression analysis was used to analyze data and test the study hypotheses.
The findings of the study show that there is a positive effect of both foreign ownership and institutional ownership on audit fees. These results indicate that institutional shareholders and foreign entities may tend to demand high-quality audit services to ensure the reliability of financial statements prepared by the management, which increases the audit fees .The results also show that there is a negative relationship between managerial ownership and audit fees; that is, a higher amount of company's shares owned by the management will reduce the conflict of interests between the management and the owners and as a result, audit risks and fees will be reduced. Moreover, the results show that there is no statistically significant relationship between ownership concentration and audit fees.
Based on the results of the study, the researchers recommend that there is a need for specific and fair mechanisms to determine audit fees and to take the ownership structure into consideration. It is important to ensure the commitment of companies to pay the minimum audit wages and emphasize the necessity for disclosing audit fees in the annual reports.


Ownership structure, External auditor fees, Amman Stock Exchange

Full Text:



  • There are currently no refbacks.