Big Six Audit Fees and Client Satisfaction

Posted: 16 Sep 1998

See all articles by Bruce K. Behn

Bruce K. Behn

University of Tennessee, Knoxville - College of Business Administration

Joseph V. Carcello

University of Tennessee

Dana R. Hermanson

Kennesaw State University - Department of Accounting

Roger H. Hermanson

affiliation not provided to SSRN

Abstract

This study examines whether client satisfaction can help to explain cross-sectional variations in Big 6 audit fees. After controlling for other factors related to audit fees, overall client satisfaction and satisfaction with the audit team are positively associated with audit fees. There is weak evidence that satisfaction with the audit firm is associated with fees. The results are consistent with the view of a Big 6 audit as a service that is differentiable in the eyes of client management. An interpretation is that client satisfaction differences are costly to produce and are impounded into the price of the audit.

JEL Classification: M49

Suggested Citation

Behn, Bruce K. and Carcello, Joseph V. and Hermanson, Dana R. and Hermanson, Roger H., Big Six Audit Fees and Client Satisfaction. Available at SSRN: https://ssrn.com/abstract=127788

Bruce K. Behn

University of Tennessee, Knoxville - College of Business Administration ( email )

453 Haslam Business Building
Knoxville, TN 37996
United States
865-974-1760 (Phone)
865-974-4631 (Fax)

Joseph V. Carcello

University of Tennessee ( email )

Department of Accounting & Information Management
629 Stokely Management Center
Knoxville, TN 37996-0560
United States
865-974-1757 (Phone)
865-974-4631 (Fax)

Dana R. Hermanson (Contact Author)

Kennesaw State University - Department of Accounting ( email )

1000 Chastain Road
Kennesaw, GA 30144
United States
770-423-6077 (Phone)
770-499-3420 (Fax)

Roger H. Hermanson

affiliation not provided to SSRN

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