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Quality, Size, and Performance of Audit Firms

The International Journal of Business and Finance Research, v. 7 (5) p. 89-105

17 Pages Posted: 5 Sep 2013  

Yahn-Shir Chen

National Yunlin University of Science and Technology

Joseph C. S. Hsu

National Yunlin University of Science and Technology

Mei-Ting Huang

National Yunlin University of Science and Technology, Taiwan

Ping-Sen Yang

National Yunlin University of Science and Technology

Date Written: 2013

Abstract

This study examines the relations between audit quality, audit firm size, and financial performance. This study estimates audit quality of audit firms from human capital-related factors, such as educational level of auditors, work experience of auditors, and professional training. From the perspective of market segmentation, the sample is divided into three categories: national, regional, and local firms. Empirical results report a positive association between audit firm size and audit quality for the three categories of audit firms. The positive relationship of national audit firms is higher than that of regional and local audit firms. The relationship between audit quality and financial performance is positive. The positive relationship of national audit firms is higher than that of regional and local audit firms.

Keywords: Audit quality, Audit firm size, Audit firms

JEL Classification: M42

Suggested Citation

Chen, Yahn-Shir and Hsu, Joseph C. S. and Huang, Mei-Ting and Yang, Ping-Sen, Quality, Size, and Performance of Audit Firms (2013). The International Journal of Business and Finance Research, v. 7 (5) p. 89-105. Available at SSRN: https://ssrn.com/abstract=2262503

Yahn-Shir Chen (Contact Author)

National Yunlin University of Science and Technology ( email )

123, University Rd. Sec 3
Touliu, Youlin 640, Yunlin 64002
Taiwan

Joseph C. S. Hsu

National Yunlin University of Science and Technology ( email )

123, Section 3, University Road,
Douliu, Yunlin 64002
Taiwan

Mei-Ting Huang

National Yunlin University of Science and Technology, Taiwan ( email )

Taiwan

Ping-Sen Yang

National Yunlin University of Science and Technology ( email )

Taiwan

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