An audit is a process in which the auditor collects audit evidence and expresses an audit opinion to obtain reasonable assurance. Here, the auditor's level of reasonable assurance is the output of the audit, and the resources expended by the auditor are the inputs. The effort and resources invested by the auditor represent audit costs, and the most representative measure of these costs is audit hours. Therefore, identifying the determinants of audit hours enables the inference of the production function of audit services, which can also be applied to the determination of audit fees. This study investigated the relationship between auditors' audit hours and the characteristics of auditee companies. According to the research findings, among auditee characteristics, firm size was the most important determinant of audit hours, followed by the proportion of overseas sales, the number of business locations, listing status, and industry characteristics as significant determinants. In the analysis of audit hours by auditor rank, during initial audits, the audit hours of staff-level auditors increased, but the audit hours of managers and seniors/staff did not increase significantly. When the proportion of overseas sales was high, the audit hours of seniors/staff increased relative to those of staff-level auditors and managers. In the comparison between Big 6-affiliated firms and domestic firms, Big 6-affiliated firms clearly differentiated their audit hours by industry, whereas domestic firms did not show notable differences except in the leasing industry. In Korea, audit fees had been uniformly regulated by the Financial Supervisory Service, so the characteristics of auditee companies were not rationally reflected in the determination of audit fees. Applying the results of this study would reveal which auditee characteristics should be considered in determining audit fees, as well as the irrationalities of the external audit fee regulations that had been in effect. Recently, external audit fee regulations were abolished at the request of the International Monetary Fund (IMF) and the World Bank (IBRD). With the elimination of external audit fee regulations, audit fees will be determined between auditors and auditees through market principles. In this case, while audit fees will be determined by various factors, the most fundamental criterion will inevitably be audit input hours. Therefore, this study will serve as a valuable reference for determining audit fees even under a liberalized fee system.