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Conference Paper: The association between industry, regional city specialization and the audit fee premium/discount: evidence from Hong Kong SAR, China
Title | The association between industry, regional city specialization and the audit fee premium/discount: evidence from Hong Kong SAR, China |
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Authors | |
Keywords | Auditor specialization Audit fees Audit services Hong Kong SAR China |
Issue Date | 2012 |
Publisher | Social Science Electronic Publishing, Inc. The Journal's web site is located at http://www.ssrn.com/ |
Citation | The 3rd Annual Conference of the World Accounting Frontiers Series incorporating the International Conference of Accounting, Business, Leadership and Information Management, University of Macau, Macau SAR, China, 19-21 May 2011. How to Cite? |
Abstract | This study investigates the relationship between auditor specialization and the audit fee premium/discount in Hong Kong SAR, China. The study has three main hypotheses: 1) that the there is an audit fee premium when an audit firm is an industry, regional city and/or regional city-industry specialist; 2) that the audit fee premium increases when a Big 4 audit firm is an industry, regional city and/or regional city-industry specialist; and 3) that the level of audit fees decreases when a non-Big 4 audit firm is an industry, regional city and/or regional city-industry specialist. Both the ranking and market share benchmark methods are used for defining specialists. Different results are generated, indicating sensitivity to different classifications. In further testing, the number of auditees is used to define market share.
The sample consists of more than 1,000 Hong Kong listed companies from 2004 to 2006. Examining auditor specialization across a three year period allows the study to show whether specialist premiums or discounts are stable over time. Results indicate that the three types of auditor specialization examined exist in Hong Kong SAR, China and they are reasonably stable across time. However mixed results are found across the three years in relation with the level of audit fees. The main results provide strong evidence of a fee premium for regional city specialization under various definitions in one year, but these significant results did not hold in the two subsequent years. Some evidence of an industry specialist fee premium is detected in 2004 and 2005 while a discount is found in 2006 under some definitions. Results indicate none of the three types of specialization consistently appears in every year to justify fee premiums/discounts unless affected by other economic conditions. |
Description | Paper presentation Working papers series |
Persistent Identifier | http://hdl.handle.net/10722/183256 |
SSRN |
DC Field | Value | Language |
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dc.contributor.author | Kwong, JST | en_US |
dc.contributor.author | Hay, D | - |
dc.date.accessioned | 2013-05-15T01:51:15Z | - |
dc.date.available | 2013-05-15T01:51:15Z | - |
dc.date.issued | 2012 | en_US |
dc.identifier.citation | The 3rd Annual Conference of the World Accounting Frontiers Series incorporating the International Conference of Accounting, Business, Leadership and Information Management, University of Macau, Macau SAR, China, 19-21 May 2011. | - |
dc.identifier.uri | http://hdl.handle.net/10722/183256 | - |
dc.description | Paper presentation | - |
dc.description | Working papers series | - |
dc.description.abstract | This study investigates the relationship between auditor specialization and the audit fee premium/discount in Hong Kong SAR, China. The study has three main hypotheses: 1) that the there is an audit fee premium when an audit firm is an industry, regional city and/or regional city-industry specialist; 2) that the audit fee premium increases when a Big 4 audit firm is an industry, regional city and/or regional city-industry specialist; and 3) that the level of audit fees decreases when a non-Big 4 audit firm is an industry, regional city and/or regional city-industry specialist. Both the ranking and market share benchmark methods are used for defining specialists. Different results are generated, indicating sensitivity to different classifications. In further testing, the number of auditees is used to define market share. The sample consists of more than 1,000 Hong Kong listed companies from 2004 to 2006. Examining auditor specialization across a three year period allows the study to show whether specialist premiums or discounts are stable over time. Results indicate that the three types of auditor specialization examined exist in Hong Kong SAR, China and they are reasonably stable across time. However mixed results are found across the three years in relation with the level of audit fees. The main results provide strong evidence of a fee premium for regional city specialization under various definitions in one year, but these significant results did not hold in the two subsequent years. Some evidence of an industry specialist fee premium is detected in 2004 and 2005 while a discount is found in 2006 under some definitions. Results indicate none of the three types of specialization consistently appears in every year to justify fee premiums/discounts unless affected by other economic conditions. | - |
dc.language | eng | en_US |
dc.publisher | Social Science Electronic Publishing, Inc. The Journal's web site is located at http://www.ssrn.com/ | - |
dc.relation.ispartof | Social Science Research Network (SSRN) | - |
dc.rights | © 2011 Social Science Electronic Publishing, Inc. All Rights Reserved. For personal & noncommercial use apply only to specific documents and use of specific SSRN-provided statistics and other information. | - |
dc.subject | Auditor specialization | - |
dc.subject | Audit fees | - |
dc.subject | Audit services | - |
dc.subject | Hong Kong SAR | - |
dc.subject | China | - |
dc.title | The association between industry, regional city specialization and the audit fee premium/discount: evidence from Hong Kong SAR, China | en_US |
dc.type | Conference_Paper | en_US |
dc.identifier.email | Kwong, JST: jkwong@business.hku.hk | en_US |
dc.identifier.authority | Kwong, JST=rp01070 | en_US |
dc.description.nature | link_to_OA_fulltext | - |
dc.identifier.doi | 10.2139/ssrn.2101466 | - |
dc.identifier.hkuros | 214294 | en_US |
dc.identifier.eissn | 1556-5068 | - |
dc.publisher.place | United states | - |
dc.identifier.ssrn | 2101466 | - |
dc.identifier.issnl | 1556-5068 | - |