Auditor brand name reputations and industry specializations

Auditor brand name reputations and industry specializations The development of both brand name reputation and industry specialization by Big 8 auditors is argued to be costly and therefore to increase audit fees. For a sample of 1484 Australian publicly listed companies we estimate audit fee premia for Big 8 auditors. On average, industry specialist Big 8 auditors earn a 34% premium over nonspecialist Big 8 auditors, and the Big 8 brand name premium over non-Big 8 auditors averages around 30%. These results support that industry expertise is a dimension of the demand for higher quality Big 8 audits and a basis for within Big 8 product differentiation. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Accounting and Economics Elsevier

Auditor brand name reputations and industry specializations

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Publisher
Elsevier
Copyright
Copyright © 1995 Elsevier Ltd
ISSN
0165-4101
DOI
10.1016/0165-4101(95)00403-3
Publisher site
See Article on Publisher Site

Abstract

The development of both brand name reputation and industry specialization by Big 8 auditors is argued to be costly and therefore to increase audit fees. For a sample of 1484 Australian publicly listed companies we estimate audit fee premia for Big 8 auditors. On average, industry specialist Big 8 auditors earn a 34% premium over nonspecialist Big 8 auditors, and the Big 8 brand name premium over non-Big 8 auditors averages around 30%. These results support that industry expertise is a dimension of the demand for higher quality Big 8 audits and a basis for within Big 8 product differentiation.

Journal

Journal of Accounting and EconomicsElsevier

Published: Dec 1, 1995

References

  • Determinants of audit fees for quoted UK companies
    Chan, P; Ezzamel, M; Gwilliam, D
  • A note on the association between audit firm size and audit quality
    Davidson, R; Neu, D
  • Competition in the market for audit services: The effect of supplier concentration on audit fees
    Pearson, T; Trompeter, G

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