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- Title
What matters in audit pricing: industry specialization or overall market leadership?
- Authors
Ferguson, Andrew C.; Francis, Jere R.; Stokes, Donald J.
- Abstract
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.
- Subjects
AUSTRALIA; PROFESSIONAL fees; AUDITORS; PRICE levels; MARKET share; ACCOUNTING firms; PRICING; BUSINESS research; ECONOMICS
- Publication
Accounting & Finance, 2006, Vol 46, Issue 1, p97
- ISSN
0810-5391
- Publication type
Article
- DOI
10.1111/j.1467-629X.2005.00152.x