EconPapers    
Economics at your fingertips  
 

Audit pricing and auditor industry specialization in an emerging market: Evidence from China

Kun Wang, Sewon O and Zahid Iqbal

Journal of International Accounting, Auditing and Taxation, 2009, vol. 18, issue 1, 60-72

Abstract: In this paper we examine the determinants of audit fees by focusing on auditor industry specialization and second tier auditors in the Chinese market. We find evidence of Big 4 premiums for brand name as well as industry specialization in both the statutory and supplementary market. Big 4 industry specialists earn additional premiums in the statutory market as compared to non-industry specialists. We also find that market expansion did not provide the second tier auditors any price advantage. These auditors increased their market share mainly in the mid- and small-sized clienteles. Moreover, industry experience developed by the second tier firms may have helped them gain economy of scale and reduce service fees. This may be their strategy to win future clients that seek low-priced audits.

Keywords: Audit fee; Big 4 firms; Industry specialization; Emerging market (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1061951808000505
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jiaata:v:18:y:2009:i:1:p:60-72

DOI: 10.1016/j.intaccaudtax.2008.12.006

Access Statistics for this article

Journal of International Accounting, Auditing and Taxation is currently edited by R. Larson

More articles in Journal of International Accounting, Auditing and Taxation from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-05-02
Handle: RePEc:eee:jiaata:v:18:y:2009:i:1:p:60-72