What matters in audit pricing: Industry specialization or overall market leadership?

Publication Type:
Journal Article
Citation:
Accounting and Finance, 2006, 46 (1), pp. 97 - 106
Issue Date:
2006-03-01
Full metadata record
Ferguson et al. (2003) report that audit industry fee premia primarily reside with joint national and city-specific industry leadership as opposed to merely firm-wide (national) industry expertise, suggesting auditor choice among the Big 5 is best conceptualized on joint industry specialization in city-specific markets and nationally. The present study examines whether the prior results could be confounded by the presence of city-specific overall market leadership effects. Our findings reaffirm that joint local and national auditor industry expertise is valued by audit clients. Furthermore, overall city-specific leadership, by itself, also matters in fee determination and results in higher fees, although at a slightly weaker level of statistical significance. © 2006 AFAANZ.
Please use this identifier to cite or link to this item: