What matters in audit pricing: industry specialization or overall market leadership?
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. Copyright The AuthorsJournal compilation (c) 2006 AFAANZ.
Year of publication: |
2006
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Authors: | Ferguson, Andrew C. ; Francis, Jere R. ; Stokes, Donald J. |
Published in: |
Accounting and Finance. - Accounting and Finance Association of Australia and New Zealand - AFAANZ, ISSN 0810-5391. - Vol. 46.2006, 1, p. 97-106
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Publisher: |
Accounting and Finance Association of Australia and New Zealand - AFAANZ |
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