City-level auditor industry specialization, economies of scale, and audit pricing
Data(s) |
01/07/2012
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Resumo |
We examine the effects of city-level auditor industry specialization and scale economies on audit pricing in the United States. Using a sample of Big N clients for the 2000-2007 period, and a scale measure based on percentile rankings of the number of audit clients at the city-industry level, we document significant specialization premiums and scale discounts in both the pre- and post-Sarbanes-Oxley Act (SOX) periods. However, the effects of industry specialization and scale economies on audit pricing are highly interactive. The negative effect of city-industry scale on audit fees obtains only for clients of specialist auditors. By contrast, clients of non-specialist auditors obtain scale discounts only when they enjoy strong bargaining power, suggesting that auditors are "forced" to pass on scale economies to clients with greater bargaining power. |
Identificador | |
Publicador |
American Accounting Association |
Relação |
http://dro.deakin.edu.au/eserv/DU:30080011/gul-citylevelauditor-2012.pdf http://www.dx.doi.org/10.2308/accr-10275 |
Palavras-Chave | #industry specilization #scale economies #audit pricing #client bargaining power #Social Sciences #Business, Finance #Business & Economics #industry specialization #SARBANES-OXLEY ACT #BIG 6 MERGERS #OFFICE SIZE #FEES #MARKET #QUALITY #PREMIUMS #DIFFERENTIATION #REPUTATIONS |
Tipo |
Journal Article |
Idioma(s) |
eng |
Direitos |
2012, American Accounting Association |