82nd Seminar on Finance and Accounting
December 21, 2016
Topic: Client, Industry and Country Factors Affecting Choice of Big N Industry Expert Auditors
Presenter：Soo Young Kwon, professor, Time: November 7, 2008（Friday）3：00—4：30 PM |
Venue: Room 513, Jiageng Bld 2
Chair： Zhe Shen, assistant professor in finance, IFAS
Abstract：
This study investigates client choice of industry specialist auditors from among the Big N (Big 4 or 5) in an international (non-U.S.) setting. We employ two geographical measures of auditors’ industry expertise as a surrogate for high audit quality: based on industry market shares in clients’home countries, and based on industry market shares in the
investigate client-specific, industry-level and country-level factors hypothesized to enhance or decrease client demand for audits by auditors having industry expertise. Using data for 29 countries and 14 broad industries from 1993-2005, we find that international client choice of homebased industry specialist auditors is positively associated with client size, leverage, growth opportunities, capital intensity, and membership in a regulated industry. At the country level, the choice of Big N industry specialist auditors is higher where levels of investor protection and quality of financial reporting environment are higher. We find somewhat different results for the U.S.-based measure of auditor industry specialization. International client choice of U.S.-based industry specialist auditors is positively associated with leverage, growth opportunities, external financing, financial losses, and concentrated industries. Additionally, the demand for the U.S.-based industry specialist auditors is higher where levels of investor protection and national economic development (but not quality of financial reporting environment) are higher.
Presenter Introduction：
Soo Young Kwon is a professor of accounting and Vice President for Administration and Finance at
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