The Accounting Review Vol. 80 No. 1 2005
The Pricing of National and City-Specific Reputations for Industry Expertise in the U.S. Audit Market
Abstract
The pricing of Big 5 industry leadership in the U.S. audit market is investigated using audit fee disclosures for the 2000–2001 fiscal years and the joint nationalcity framework in Ferguson et al. (2003). There is a significant fee premium of 19 percent on those engagements where Big 5 auditors are both the nationally top-ranked auditor and the city-level industry leader in the city where the client is headquartered, indicating that national and city-specific industry leadership jointly affect auditor reputation and pricing. However, there is never a premium in any tests for auditors that are national industry leaders alone without also being city-specific industry leaders, indicating that national leadership by itself does not result in a premium. The evidence is mixed with respect to city-specific industry leaders alone that are not also national industry leaders. While there is a premium of 8 percent in the primary tests, this result is inconclusive as it does not hold in all sensitivity analyses.
- DOI
- 10.2308/accr.2005.80.1.113
- Volume
- 80
- Issue
- 1
- Pages
- 113-136
- Language
- en
- Sources
- openalex bibtex:phds-export.bib crossref