Demand and Supply of Auditing in Ipos - an Empirical Analysis of the Quebec Market

Posted: 2 Dec 2000

See all articles by Jean Bédard

Jean Bédard

Université Laval - École de comptabilité

Daniel Coulombe

Université Laval - Département des Sciences Comptables

Lucie Courteau

Free University of Bozen-Bolzano - Faculty of Economics and Management

Abstract

This study examines the factors affecting the demand for higher-quality auditors at the time of an initial public offering in a small market characterized by low-litigation risk, government subsidies for companies going public, and the presence of large non-Big Six auditors, namely, the Canadian province of Quebec. Our results, from an analysis of for 212 Quebec IPOs between 1983 and 1997, indicate that the choice of an auditor at the time of an IPO is significantly affected by the company's risk, size, and geographical dispersion. They also suggest that the Quebec audit market is segmented between three types of service providers: the Big Six, the National firms and the Local firms. Local firms audit small local companies with low risk, National firms audit large local companies with moderate risk, and Big Six audit large geographically dispersed companies with high risk.

JEL Classification: M40, G24

Suggested Citation

Bédard, Jean and Coulombe, Daniel and Courteau, Lucie, Demand and Supply of Auditing in Ipos - an Empirical Analysis of the Quebec Market. Available at SSRN: https://ssrn.com/abstract=246516

Jean Bédard (Contact Author)

Université Laval - École de comptabilité ( email )

2325, rue de la Terrasse
Québec, Québec G1V 0A6
Canada
418-656-7055 (Phone)
418-656-2624 (Fax)

Daniel Coulombe

Université Laval - Département des Sciences Comptables ( email )

Ste-Foy, Quebec G1K 7P4
Canada
418-656-2827 (Phone)
418-656-2624 (Fax)

Lucie Courteau

Free University of Bozen-Bolzano - Faculty of Economics and Management ( email )

Faculty of Economics and Management
Piazza Università 1
39100 Bozen-Bolzano (BZ), Bozen 39100
Italy

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