Are Client-Perceived Audit Firm Reputation and Audit Team Attributes Associated with Bign Audit Fees?

34 Pages Posted: 15 May 2004

See all articles by El'fred Boo

El'fred Boo

Nanyang Business School, Nanyang Technological University

Hian Chye Koh

SIM University (UniSIM)

Date Written: April 2004

Abstract

This study examines whether client-perceived audit firm reputation and audit team attributes are associated with audit fees of 213 BigN clients. After controlling for auditor industry specialization and other factors related to audit fees, client-perceived audit firm reputation are positively associated with audit fees. This suggests BigN firms do derive fee premium from differentiation dimensions other than industry specialization (Chan, Ferguson, Simunic and Stokes 2001; Gramling and Stone 2001; Mayhew and Wilkins 2003). Among client-perceived audit team attributes, only auditing expertise is significantly and negatively associated with audit fees. We conclude that BigN firms can exploit client-perceived firm reputation to earn a fee premium vis-a-vis other BigN firms.

Keywords: Differentiation within BigN group, audit fee premium, credibility and service attributes of audit

JEL Classification: M41, M49

Suggested Citation

Boo, El'fred Hian Yong and Koh, Hian Chye, Are Client-Perceived Audit Firm Reputation and Audit Team Attributes Associated with Bign Audit Fees? (April 2004). Available at SSRN: https://ssrn.com/abstract=542282 or http://dx.doi.org/10.2139/ssrn.542282

El'fred Hian Yong Boo (Contact Author)

Nanyang Business School, Nanyang Technological University ( email )

Singapore, 639798
Singapore

Hian Chye Koh

SIM University (UniSIM) ( email )

Singapore

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
534
Abstract Views
2,900
rank
73,141
PlumX Metrics