Mohammad Ebrahim Nawaiseh, Ayman Bader, Hala Nour Nawaiseh
This paper empirically looks at the effect of ownership structure on audit fees in developing economies using all the national twelve banks in Jordan as a case ; the study uses published annual data ranging from 2008 to 2015. Those banks include (10) conventional and the (2) Islamic banks. The Jordan banking sector is dominated by a high institutional ownership concentration; this is followed by family and government ownership. We find a significantly positive (insignificantly negative) effect of both family and institutional (Government) ownership on audit fees regarding of conventional banks; which means, it is possible that owners ask the auditors to provide high quality service which in turn results on high audit fees. We further document that our results show insignificantly negative effect of controlled family and institutional ownership of Islamic banks on audit fees. Finally, we do not, however, find evidence of any effect of government ownership for both banking systems on audit fees. This shows that in Jordan, conventional banks truly pay higher audit fees when these are controlled by family or institutional shareholders and pay lower fees if dominated by government ownership, these results explain the mixed effects of the nature of family and institutional ownership on audit fees. Based on these results; we suggest that ownership variable constitutes a key determinant of audit fees.