Work

Audit Committee Networks and Audit Fees: A European Analysis

Year: 2026

Type: article

Abstract: ABSTRACT This study investigates the association between audit committee member networks and audit fees in a sample of 225 publicly traded firms from eight European countries between 2005 and 2020. Using social network analysis, we find that director interconnections—established through overlapping board memberships—are associated with audit fees. Our findings reveal an extensive, yet fragmented director network, where higher centrality positions correlate with increased audit fees. This suggests that director connections strengthen the demand for audit effort, leading to higher audit fees. Furthermore, we show that director centrality moderates the positive relationship between firm complexity, financial risk, and board independence with audit fees.

Source: Accounting and Finance

DOI: 10.1111/acfi.70173

Authors: Ruth García‐Cobo, César Zarza Herranz, Félix J. López Iturriaga

Institutions: Universidad de Valladolid, Universidad de Alcalá

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,470

Funders: Banco Santander, Ministerio de Ciencia e Innovación