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Who are Industry Specialist Auditors?

Author

Listed:
  • Like Jiang

    (ESSEC Business School)

  • Anne Jeny-Cazavan

    (ESSEC Business School)

  • Sophie Audousset-Coulier

    (Department of accounting - Concordia University [Montreal])

Abstract

The purpose of this paper is to analyze the effects of using several definitions and several measurements of auditor industry specialization in the empirical audit research. Industry specialist auditors are supposed to be able to provide better quality audits therefore, auditor industry specialization measures have been developed and used in the empirical audit research. In a first step, we empirically test whether different definitions of auditor industry specialist result in consistent designations of audit firms as specialists of a given industry and find that inconsistent industry specialist definitions lead to inconsistent designation of audit firms as industry specialists. In a second step, we test and demonstrate that these different auditor industry designations lead to inconsistent results in terms of magnitude and significance regarding the fee premium paid to auditor industry specialists. Such evidence raises an issue of whether the findings in prior studies are subject to measurement errors of audit industry specialists

Suggested Citation

  • Like Jiang & Anne Jeny-Cazavan & Sophie Audousset-Coulier, 2012. "Who are Industry Specialist Auditors?," Post-Print hal-00691057, HAL.
    • Handle: RePEc:hal:journl:hal-00691057
    Note: View the original document on HAL open archive server: https://hal.science/hal-00691057
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    File URL: https://hal.science/hal-00691057/document
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    References listed on IDEAS

    as
    1. Palmrose, Zv, 1986. "Audit Fees And Auditor Size - Further Evidence," Journal of Accounting Research, Wiley Blackwell, vol. 24(1), pages 97-110.
    2. Simunic, Da, 1980. "The Pricing Of Audit Services - Theory And Evidence," Journal of Accounting Research, Wiley Blackwell, vol. 18(1), pages 161-190.
    3. Seetharaman, Ananth & Gul, Ferdinand A. & Lynn, Stephen G., 2002. "Litigation risk and audit fees: evidence from UK firms cross-listed on US markets," Journal of Accounting and Economics, Elsevier, vol. 33(1), pages 91-115, February.
    4. Danos, P & Eichenseher, Jw, 1982. "Audit Industry Dynamics - Factors Affecting Changes In Client-Industry Market Shares," Journal of Accounting Research, Wiley Blackwell, vol. 20(2), pages 604-616.
    5. Gul, Ferdinand A. & Fung, Simon Yu Kit & Jaggi, Bikki, 2009. "Earnings quality: Some evidence on the role of auditor tenure and auditors' industry expertise," Journal of Accounting and Economics, Elsevier, vol. 47(3), pages 265-287, June.
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    Cited by:

    1. Helmi A. Boshnak, 2021. "The Impact of Audit Committee Characteristics on Audit Quality: Evidence from Saudi Arabia," International Review of Management and Marketing, Econjournals, vol. 11(4), pages 1-12.

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