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An Examination of the Effect of Regulatory Actions on Client Retention
Author(s) -
Wilson Thomas E.,
Apostolou Barbara,
Apostolou Nicholas G.
Publication year - 1997
Publication title -
international journal of auditing
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.583
H-Index - 21
eISSN - 1099-1123
pISSN - 1090-6738
DOI - 10.1111/1099-1123.00011
Subject(s) - credibility , audit , business , accounting , purchasing , external auditor , auditor independence , auditor's report , marketing , joint audit , internal audit , political science , law
Research into the significance of auditor credibility shows that firms distinguish the services of a more credible auditor. Further, demand for levels of auditor credibility is shown to vary across firms purchasing audit services. This study extends the line of enquiry regarding the effect of auditor credibility by examining the reaction of client firms to changes in their auditors credibility. Also, the firm characteristics associated with a reaction to a change in credibility are examined. The results suggest that clients of the Big Eight firms react differently than clients of smaller audit firms to the change in credibility.