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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

TitleThe association between industry, regional city specialization and the audit fee premium/discount: evidence from Hong Kong SAR, China
Authors
KeywordsAuditor specialization
Audit fees
Audit services
Hong Kong SAR
China
Issue Date2012
PublisherSocial 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?
AbstractThis 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.
DescriptionPaper presentation
Working papers series
Persistent Identifierhttp://hdl.handle.net/10722/183256
SSRN

 

DC FieldValueLanguage
dc.contributor.authorKwong, JSTen_US
dc.contributor.authorHay, D-
dc.date.accessioned2013-05-15T01:51:15Z-
dc.date.available2013-05-15T01:51:15Z-
dc.date.issued2012en_US
dc.identifier.citationThe 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.urihttp://hdl.handle.net/10722/183256-
dc.descriptionPaper presentation-
dc.descriptionWorking papers series-
dc.description.abstractThis 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.languageengen_US
dc.publisherSocial Science Electronic Publishing, Inc. The Journal's web site is located at http://www.ssrn.com/-
dc.relation.ispartofSocial 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.subjectAuditor specialization-
dc.subjectAudit fees-
dc.subjectAudit services-
dc.subjectHong Kong SAR-
dc.subjectChina-
dc.titleThe association between industry, regional city specialization and the audit fee premium/discount: evidence from Hong Kong SAR, Chinaen_US
dc.typeConference_Paperen_US
dc.identifier.emailKwong, JST: jkwong@business.hku.hken_US
dc.identifier.authorityKwong, JST=rp01070en_US
dc.description.naturelink_to_OA_fulltext-
dc.identifier.doi10.2139/ssrn.2101466-
dc.identifier.hkuros214294en_US
dc.publisher.placeUnited states-
dc.identifier.ssrn2101466-

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