The demand for auditor reputation across international markets for audit services

Neil Fargher, Mark H. Taylor, Daniel T. Simon

Research output: Contribution to journalArticlepeer-review

16 Citations (Scopus)

Abstract

Previous research has documented a positive relation between variation in audit fees across countries and specific macroeconomic factors such as a country's level of litigiousness and the level of required disclosure. Such studies have focused on the supply of auditor services using single-equation models. This study examines not only the supply of but also the demand for large-firm auditors across 20 different countries using the simultaneous-equations approach. This approach is used to account for the endogeneity between choice of auditor and audit fees. The results indicate an association between greater disclosure requirements and the choice of a large-firm auditor. They also indicate that increased litigation and regulation are associated with higher audit fees.
Original languageEnglish
Pages (from-to)407-421
Number of pages15
JournalThe International Journal of Accounting
Volume36
Issue number4
DOIs
Publication statusPublished - 2001
Externally publishedYes

Keywords

  • audit fees
  • auditing
  • litigation
  • regulation

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