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Audit Fees and Market Segmentation – Further Evidence on How Client Size Matters within the Context of Audit Fee Models

Audit Fees and Market Segmentation – Further Evidence on How Client Size Matters within the... The purpose of this paper is to examine the audit fee premium to the Big 6 brand in the small and large client segments of the market for audit services. We use a sample of Australian fee data for the five‐year period 1995 to 1999. We find evidence of price premiums to Big 6 auditors in the small client segment. We do not find evidence of fee premiums in the large client segment. We also present evidence that audit fees are not linearly related to client size as is typically assumed in audit fee models. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Auditing Wiley

Audit Fees and Market Segmentation – Further Evidence on How Client Size Matters within the Context of Audit Fee Models

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References (36)

Publisher
Wiley
Copyright
Copyright © 2004 Wiley Subscription Services, Inc., A Wiley Company
ISSN
1090-6738
eISSN
1099-1123
DOI
10.1111/j.1099-1123.2004.00159.x
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to examine the audit fee premium to the Big 6 brand in the small and large client segments of the market for audit services. We use a sample of Australian fee data for the five‐year period 1995 to 1999. We find evidence of price premiums to Big 6 auditors in the small client segment. We do not find evidence of fee premiums in the large client segment. We also present evidence that audit fees are not linearly related to client size as is typically assumed in audit fee models.

Journal

International Journal of AuditingWiley

Published: Mar 1, 2004

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