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Strategic pricing by B ig 4 audit firms in private client segments
Author(s) -
Dutillieux Wouter,
Stokes Donald,
Willekens Marleen
Publication year - 2013
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12051
Subject(s) - audit , business , mandate , big data , marketing , big four , accounting , finance , political science , computer science , law , operating system
We examine how B ig 4 auditors compete for new private clients. We find evidence suggesting that B ig 4 auditors offer fee discounts to attract non‐ B ig 4 private clients to experience attributes of their brand name audit services. We also find that to attract clients from competing B ig 4 suppliers, B ig 4 auditors target fee discounts at clients in industries where they are the market leader. Our results further indicate that the B ig 4 industry leaders target fee discounts to fast‐growing clients and are able to charge these clients significant price fee increases in the second mandate period (after 3 years).