Who are Industry Specialist Auditors?

41 Pages Posted: 14 Jan 2012

See all articles by Like Jiang

Like Jiang

University of Melbourne - Faculty of Business and Economics

Anne Jeny

ESSEC Business School; ESSEC Business School - Department of Accounting and Management Control

Sophie Audousset-Coulier

Concordia University, Quebec - John Molson School of Business

Date Written: January 10, 2012

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.

Keywords: Auditor industry specialists, audit fees

Suggested Citation

Jiang, Like and Jeny, Anne and Audousset-Coulier, Sophie, Who are Industry Specialist Auditors? (January 10, 2012). CAAA Annual Conference 2012. Available at SSRN: https://ssrn.com/abstract=1984960 or http://dx.doi.org/10.2139/ssrn.1984960

Like Jiang

University of Melbourne - Faculty of Business and Economics ( email )

Victoria, 3010
Australia

Anne Jeny

ESSEC Business School ( email )

Av Bernard Hirsch
BP 50105
Cergy-Pontoise, 95021
France

ESSEC Business School - Department of Accounting and Management Control ( email )

Av Bernard Hirsch
BP 50105
Cergy-Pontoise, 95021
France

Sophie Audousset-Coulier (Contact Author)

Concordia University, Quebec - John Molson School of Business ( email )

Montreal, Quebec H3G 1M8
Canada
001 514 848 2424 ext 2021 (Phone)

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