Meta-Regression in Auditing Research: Evaluating the Evidence on the Big Firm Premium

63 Pages Posted: 12 Sep 2010 Last revised: 12 Sep 2014

See all articles by David Hay

David Hay

University of Auckland - Business School

Date Written: September 1, 2014

Abstract

This paper applies meta-regression analysis to take stock of the results of auditing research examining the premium charged by the Big audit firms. The Big firm premium is overstated in research taken as a whole, as a result of publication bias, but publication bias is not so strong as to completely eliminate evidence of a remaining premium. While the mean of the reported results is more than 23%, after eliminating publication bias the result is closer to 13%. The premium is significant in the United States listed companies, but not in other settings around the world. The study examines variables related to the publication process and the researchers, finding that, while there is no evidence that researchers with Big firm affiliations are subject to greater publication bias, the status of the journal and the researcher does make a difference. Meta-regression analysis has potential to lead to revised views of many areas of accounting and auditing research.

Keywords: auditing, audit fee research, meta-analysis, big 4, audit quality

JEL Classification: L13, L84, M40, M42

Suggested Citation

Hay, David, Meta-Regression in Auditing Research: Evaluating the Evidence on the Big Firm Premium (September 1, 2014). Available at SSRN: https://ssrn.com/abstract=1675605 or http://dx.doi.org/10.2139/ssrn.1675605

David Hay (Contact Author)

University of Auckland - Business School ( email )

12 Grafton Rd
Auckland, 1010
New Zealand

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