Publication Type
Journal Article
Version
acceptedVersion
Publication Date
2-2026
Abstract
Using audit hours from firms listed on the Korea Exchange as a direct proxy for audit effort, this study examines whether non-audit services (NAS) purchased from audit firms improve audit efficiency. Our results reveal that the ratio of NAS fees to total fees paid to audit firms is associated with lower audit hours and audit fees, but it is not significantly related to audit billing rates. The reduction in audit effort associated with NAS is more pronounced when NAS provided are audit-related, and for clients who hire Big 4 auditors, have short-tenured auditors, and report a profit. Further, using path analysis and multiple audit quality proxies, we find no evidence that NAS adversely affect audit quality, either directly or indirectly via their impact on audit effort. Collectively, our evidence supports the view that the joint provision of NAS and audit services enhances audit efficiency without compromising audit quality.
Keywords
Audit efficiency, audit hours, billing rates, knowledge spillover, non-audit services
Discipline
Accounting | Corporate Finance
Research Areas
Corporate Governance, Auditing and Risk Management
Publication
European Accounting Review
ISSN
0963-8180
Identifier
10.1080/09638180.2026.2632607
Publisher
Taylor and Francis Group
Citation
YU, Jaeyoon; YUN, Yongsuk; and ZANG, Yoonseok.
Non-audit services and knowledge spillover: Evidence from audit hours and billing rates. (2026). European Accounting Review.
Available at: https://ink.library.smu.edu.sg/soa_research/2111
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1080/09638180.2026.2632607