This study investigates the impact of testing internal control over Financial Reporting (ICFR) under SOX 404(b) on audit and consulting-like (non-audit) service fees changes over the 2000-2016 period, after controlling for factors including risk, operations, governance, gender, finances and firm size.Our findings indicate that ICFR 404(b) accounts for 30% of the increase in audit fees, and that accelerated filers' larger firms pay higher fees compared to non-accelerated filers' smaller firms.Auditors are paid for completing additional tests of internal controls, implying an improvement in the quality of internal audit control.A 19% reduction in non-audit fees was also observed, exerting pressure on external auditors to be less independent.Reduced risks and tightened governance policies indicate that increased audit fees are driven by
Elfakhani et al. (Wed,) studied this question.