Non-Audit Services and Auditor Independence in the 2007 Italian Regulatory Environment

This paper analyzes the first-time application of mandatory disclosure in annual reports of audit and non-audit fees in the Italian context. This information can give the readers of financial statements an indication of auditor independence (in appearance). An empirical analysis is conducted on year 2007 annual reports of 239 Italian listed companies. The main research objectives are as follows: (1) to provide a comprehensive description of the relative level of non-audit fees; and (2) to investigate the relation between non-audit services (NAS) and the opinion expressed in the audit report.