Audit Office Reputation Shocks from Gains and Losses of Major Industry Clients

Francis, JR; Mehta, MN; Zhao, W

Audit Office Reputation Shocks from Gains and Losses of Major Industry Clients

Francis, JR Mehta, MN Zhao, W

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Publication Type:: Journal Article
Citation:: Contemporary Accounting Research, 2017, 34 (4), pp. 1922 - 1974
Issue Date:: 2017-12-01

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Field	Value	Language
dc.contributor.author	Francis, JR	en_US
dc.contributor.author	Mehta, MN	en_US
dc.contributor.author	Zhao, W	en_US
dc.date.issued	2017-12-01	en_US
dc.identifier.citation	Contemporary Accounting Research, 2017, 34 (4), pp. 1922 - 1974	en_US
dc.identifier.issn	0823-9150	en_US
dc.identifier.uri	http://hdl.handle.net/10453/123568
dc.description.abstract	© CAAA Our study reports evidence on the dynamic effects of client switches on auditor reputations and fee premia. Offices of large accounting firms that lose (gain) major industry clients experience a reputation shock leading to more same-industry client losses (gains) over the next two years. There is also a shift in audit fees charged to other same-industry clients when a major client loss (gain) results in an audit office losing (gaining) city-level industry leadership. A major client loss or gain also creates a short-term capacity shock to an audit office's ability to supply high-quality audits. However, there is no evidence of reputation spillovers to other-industry clients in the audit office, or to clients in other offices of the accounting firm.	en_US
dc.relation.ispartof	Contemporary Accounting Research	en_US
dc.relation.isbasedon	10.1111/1911-3846.12328	en_US
dc.subject.classification	Accounting	en_US
dc.title	Audit Office Reputation Shocks from Gains and Losses of Major Industry Clients	en_US
dc.type	Journal Article
utslib.citation.volume	4	en_US
utslib.citation.volume	34	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
utslib.copyright.status	closed_access
pubs.issue	4	en_US
pubs.publication-status	Published	en_US
pubs.volume	34	en_US

Abstract:

© CAAA Our study reports evidence on the dynamic effects of client switches on auditor reputations and fee premia. Offices of large accounting firms that lose (gain) major industry clients experience a reputation shock leading to more same-industry client losses (gains) over the next two years. There is also a shift in audit fees charged to other same-industry clients when a major client loss (gain) results in an audit office losing (gaining) city-level industry leadership. A major client loss or gain also creates a short-term capacity shock to an audit office's ability to supply high-quality audits. However, there is no evidence of reputation spillovers to other-industry clients in the audit office, or to clients in other offices of the accounting firm.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/123568