Relationship between the Components of Corporate Governance and Audit Fees of Listed Companies in the Stock Exchange of Thailand, sSET Index

Abstract

This study aimed to examine the relationship between corporate governance components and audit fees of listed companies in the Stock Exchange of Thailand's SET Index. The sample consisted of 83 companies, excluding those in the financial sector and those with incomplete data, covering the period from 2020 to 2023 (a total of 332 firm-years). Data were collected from annual reports (Form 56-1, one report). The independent variables were corporate governance components, while the dependent variable was audit fees. The data were analyzed using descriptive statistics, inferential statistics (correlation analysis), and multiple regression. The findings revealed that the proportion of independent directors was positively associated with audit fees, reflecting their role in demanding higher audit quality through the appointment of high-quality and independent auditors. Conversely, the size of the audit committee was negatively associated with audit fees, as larger audit committees tended to enhance internal control effectiveness and reduce audit risk, leading to reduced audit effort and lower audit fees. Additionally, audit firm size was positively related to audit fees, which reflected the reputation and quality of audit services provided by larger firms. Other variables such as board size, board meeting frequency, board compensation, and debt-to-asset ratio showed no significant relationship with audit fees. These findings have supported the principles of corporate governance, agency theory, and the audit risk model.