The Competitive Advantage of Audit Support Systems: The Relationship between Extent of Structure and Audit Pricing
Posted: 27 Sep 2012
Date Written: May 1, 2012
This study investigates if different audit support system designs provide firms with competitive advantages when competing in the market for audit services. We examine the association between the extent of structure a system imposes on the audit process and audit pricing. We find that audit firms with systems that impose more structure on the audit process compete as lower-cost producers in industries that suit a structured audit approach. However, when these audit firms are also national industry specialists, they retain a fee premium. This study provides evidence that audit support system design is associated with economic consequences for audit firms and clients. We include suggestions for future research.
Keywords: Audit Support Systems, Audit Fees, Audit Structure, Competitive Advantage
JEL Classification: M42, M15
Suggested Citation: Suggested Citation