Note on audit fee premiums to client size and industry specialization

Elizabeth Carson, Neil Fargher

Research output: Contribution to journalArticle

41 Citations (Scopus)

Abstract

This research note examines the impact of client size on the estimation of audit fee premiums in the Australian market for audit services. Previous research suggests that higher audit fees are expected for both larger clients and for industry specialization. We find that in the Australian market for audit services, the fee premium attributed to industry specialist audit firms is concentrated in the audit fees paid by the largest clients in each industry. One reason for higher fees paid by larger clients is the demand for additional audit services. We find higher fees for companies cross-listed on US exchanges. We also find that fee premiums to auditors that are city-industry leaders are strongly related to client size.
Original languageEnglish
Pages (from-to)423-446
Number of pages24
JournalAccounting and Finance
Volume47
Issue number3
DOIs
Publication statusPublished - 2007

Keywords

  • Audit fees; Auditing; Industry specialization
  • audit fees
  • auditing
  • industry specialization

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