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Board monitoring and audit fees: the moderating role of CEO/chair dual roles

Mohammad Jizi (Lebanese American University, Beirut, Lebanon)
Rabih Nehme (Lebanese American University, Beirut, Lebanon)

Managerial Auditing Journal

ISSN: 0268-6902

Article publication date: 7 March 2018

Issue publication date: 12 March 2018



This paper aims to examine whether CEO/chair dual roles influence board monitoring-audit fees nexus. The impact of corporate governance on audit fees literature is lacking in the banking sector, which is subject to different regulations and reporting requirements to other sectors. The level and quality of external audit services are important not only to shareholders and customers but also for regulators’ reputations and public confidence.


Examining a sample of the US national commercial banks, this study fills the gap by empirically examining whether the attributes of internal corporate governance mechanisms, proxied by boards of directors and audit committee characteristics, are related to audit fees. We introduce two interaction variables to understand whether chief executive officer (CEO)/chair dual roles influence the relationships between board independence and audit fees on the one hand and between the audit committee and audit fees on the other hand.


We find that audit fees are positively associated with board independence, board size, CEO/chair dual role and audit committee financial experts. The results of the interaction variables indicate that boards with higher independence and more effective audit committees tend to demand higher audit quality, and consequently, pay higher audit fees to protect shareholders’ interests from potential power abuse by CEOs who also chair boards.


This study contributes to the literature by providing extensive understanding of the influence on audit fees of the independence of the board of directors and the effectiveness of the audit committees. The authors first examine the impact of each individual governance variable separately and then introduce two interaction variables. This study provides policymakers with insights into the existing relationships between audit fees and the banking sector governance structure.



Jizi, M. and Nehme, R. (2018), "Board monitoring and audit fees: the moderating role of CEO/chair dual roles", Managerial Auditing Journal, Vol. 33 No. 2, pp. 217-243.



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