The Relationship between Financial Risk and Audit Fees of Firms Listed on the Stock Exchange of Thailand

Abstract

This study examines the relationship between financial risk and audit fees of firms listed on the Stock Exchange of Thailand. Financial risk is measured using the Piotroski F-Score, an accounting-based indicator of firms’ financial condition. The sample consists of 517 non-financial listed firms in 2024. Data are obtained from the SETSMART database and LSEG Data & Analytics. Multiple regression analysis is employed, with control variables including firm size, business complexity measured by the number of subsidiaries, auditor type (Big 4 versus non-Big 4), and corporate governance quality measured by CG Score. The results indicate that no statistically significant association is found between the Piotroski F-Score and audit fees. This finding may suggest that auditors primarily emphasize financial distress or going-concern-related risk when determining audit fees, rather than differences in firms’ general financial condition captured by the Piotroski F-Score. In contrast, firm size and the use of Big 4 auditors exhibit statistically significant positive relationships with audit fees. However, no statistically significant relationship was found between CG Score and audit fees. Overall, the findings provide empirical evidence on audit fee determinants and highlight the role of auditor risk assessment and corporate governance in audit pricing decisions within the Thai context