An Exploratory Investigation of Industry Specialization of Large Audit Firms PDF Download

Author: Ignace de Beelde
Publisher:
ISBN:
Category :
Languages : en
Pages : 19

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Author: Chris E. Hogan
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Dramatic changes in recent years in the audit market suggest the timeliness of an investigation of trends in auditor concentration and an extension of prior research (e.g., Danos and Eichenseher 1982). In recent press, large audit firms have claimed that specialization is a goal of increasing importance. Peat Marwick, for example, has restructured along industry lines, claiming to be recruiting professionals for national teams of multidisciplinary experts organized to quot;focus on the same industry to serve clients optimally.quot; On the other hand, litigation concerns might prompt auditors to diversify their risks by diversifying their clientele.In this study, we examine trends in industry specialization from 1976 to 1993 and the industry factors which may affect specialization; whether market share increases are greater for audit firms classified as specialists; and whether the nation?s largest audit firms have increased their market share in the industries which they have identified as their focus industries. We find evidence that concentration levels have increased over this period, consistent with the claims of the large audit firms. We find that auditor concentration levels are high in regulated industries, in more concentrated industries and in industries experiencing rapid growth, but lower in industries with a high risk of litigation. Levels of concentration have increased over time in nonregulated industries providing evidence that scale economies or superior efficiencies of heavy-involvement auditors are not limited to regulated industries but extend to nonregulated industries as well. We also find that for the audit firms classified as market leaders at the beginning of the year, market share has increased over time, whereas market share has declined for firms with a smaller share at the beginning of the year. This suggests that there are returns to investing in specialization.

Author: Nemesio Castillo
Publisher: Lulu.com
ISBN: 1304489221
Category : Business & Economics
Languages : en
Pages : 234

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Competitiveness' Key Factor s: the organization's internal resources, its heterogeneous distribution and its difficulty to imitate them

Author: Teen-Hang Meen
Publisher: CRC Press
ISBN: 113800121X
Category : Computers
Languages : en
Pages : 636

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This volume represents the proceedings of the 2013 International Conference on Innovation, Communication and Engineering (ICICE 2013). This conference was organized by the China University of Petroleum (Huadong/East China) and the Taiwanese Institute of Knowledge Innovation, and was held in Qingdao, Shandong, P.R. China, October 26 - November 1, 2013. The conference received 653 submitted papers from 10 countries, of which 214 papers were selected by the committees to be presented at ICICE 2013. The conference provided a unified communication platform for researchers in a wide range of fields from information technology, communication science, and applied mathematics, to computer science, advanced material science, design and engineering. This volume enables interdisciplinary collaboration between science and engineering technologists in academia and industry as well as networking internationally. Consists of a book of abstracts (260 pp.) and a USB flash card with full papers (912 pp.).

Author: Mohamed A. Hegazy
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Purpose - This study aims to investigate the implications of audit industry specialization on auditor's retention and growth within an emerging economy. Factors such as whether the firm is a Big 4, a firm with international affiliation, a local firm and the type of industry were studied to analyse the reasons behind audit firm retention and growth.Design/methodology/approach - This research is based on a field study related to audit firmsproviding services to listed companies in an emerging economy. The sample includes the top 100 publicly held companies' in the Egyptian stock market during 2006-2011 for which their annual reports are analysed to determine the audit firms' retention and growth. An assessment of the continuity of the auditors and theincrease in the number of audit clients were also measured.Findings - The results confirm that industry specialization has an important effect on the auditor' sretention, especially for industries where capital investment is significant such as buildings, construction, financial services, housing and real estate. Big 4 audit firms retained their clients because of their industry specialization and brand name. Evidence was found that good knowledge of accounting and auditing standards resulted in audit firms with international affiliation competing with the Big 4 for clients' retention and growth.Originality/value - This study contributes to the existing literature, as it is among the first to provideempirical evidence on auditor retention, growth and auditor' s dominance in an emerging economy such as Egypt.

Author: Cheng F. Lee
Publisher: Center for PBBEFR & Ainosco Press
ISBN: 9866286738
Category : Business & Economics
Languages : en
Pages :

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Advances in Quantitative Analysis of Finance and Accounting (New Series) is an annual publication designed to disseminate developments in the quantitative analysis of finance and accounting. The publication is a forum for statistical and quantitative analyses of issues in finance and accounting as well as applications of quantitative methods to problems in financial management, financial accounting, and business management. The objective is to promote interaction between academic research in finance and accounting and applied research in the financial community and the accounting profession.

Author: Jayanthi Krishnan
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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Auditing research requiring measures of auditor industry expertise have relied largely on proxies for industry expertise based on the market shares of auditors. These studies have yielded different results for the audit market outcomes examined. This study systematically documents differences in the proxies for each of the Big 6 and a subset of non-Big 6 auditors. Next, it examines two alternative measures, one based on market shares in large and small client segments, and the other on the industry's share in the auditor's portfolio. Finally, it examines whether the alternative measures are likely to be better proxies for auditor industry expertise. The market shares-based measures and the alternative measures are compared with an independent outside indicator of auditors' industry expertise, the audit firms' postings of their industry specialization in their home pages on the World Wide Web. The numbers indicate that the auditors' self-reported specializations are not correlated with market shares for most auditors. However, the self-reported specializations are more closely associated with one of the alternative measures, the industry's share in the auditor's portfolio. The findings suggest first, that the market share based measures may not be adequate proxies for industry expertise, and second, that future studies should consider alternative measures of specialization in studies of audit market outcomes.

Author: Debra C. Jeter
Publisher:
ISBN:
Category :
Languages : en
Pages :

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As audit quality is paramount in returning the profession to the “priesthood” in the wake of accounting scandals such as Enron and bank failures, perhaps the most important question with respect to industry specialization is whether or not industry specialists provide truly superior quality audits. Research in industry specialization by auditors has focused to date primarily on addressing this question; the pricing of audits by specialists is a related issue also examined in a number of studies. Research suggests that specialists are associated with higher earnings quality for their auditees, whether due to intervention in the reporting process, or because management anticipates such intervention and constrains opportunistic earnings management. The role of industry specialization in audit pricing has been frequently addressed in the literature, and yet remains largely unresolved. Some studies present evidence of specialist premiums, while others find no premiums or premiums only for certain subsets of clients. In its 2003 report, the GAO expressed some concern that auditor choice was limited for large national and multinational companies requiring industry-specific expertise, noting that an auditor who audits a number of smaller companies within an industry may not have the necessary expertise to handle the larger clients in that industry. Most researchers, however, find little evidence of adverse impacts such as oligopolistic pricing as a result of the increased audit market concentration resulting from the audit firm mergers and demise of Arthur Andersen. Industry specialization, if pursued as a means of enhancing the knowledge and understanding necessary to conduct superior audits, should result in benefits to both client and auditor. Industry specialists may be able to provide higher levels of assurance because they are more likely to assess risks, and to detect financial reporting errors and irregularities, and are thus equipped to deliver better planned and more effective audits.

Author:
Publisher:
ISBN:
Category : Auditing
Languages : en
Pages : 930

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Author: Mohamed Samy Eldeeb
Publisher:
ISBN:
Category :
Languages : en
Pages : 36

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The effect of the economic financial crisis worldwide has increased the need for auditors to provide a high quality services to their clients. An important element considered by clients for selecting their auditors is whether the audit firm has specialization in particular industry. Audit firm industry specialization provides clients with value for money services to help management achieve efficiency and effectiveness in their operations. Other benefits for audit firms may include increased market share, audit tenure, better financial reporting and less earnings management, audit quality with less restatements of financial information, appropriate audit fees, less exposure to litigation risk, less enforceable action by supervisory bodies and ability to compete in highly competitive environment. Specialization was also seen as critical for the survival of the auditing profession. This research analyzes the effects of audit firm industry specialization on the retention of the audit firm and growth in its business. Factors such as whether the firm is a big 4, with international affiliation, local firm, type of industry and growth were also studied for audit firm retention and growth. The sample studied includes the top 100 publicly held companies' annual reports in the Egyptian stock market during the period 2007-2011 which are analyzed to determine the audit firms' retention and growth. The results support that industry specialization has an important effect on the auditor's retention especially for industry where capital investment is significant such as building, construction, financial services and housing and real estate. Big 4 audit firms retained their clients due to their industry specialization and brand name. The findings provided evidence that good knowledge of accounting & auditing standards resulted in audit firms with international affiliation competing with big 4 for clients' retention & growth in business. The result also showed some evidence that the auditing profession in Egypt is dominated by the big 4 and the Central Audit Organization.