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Effectiveness, efficiency, and fee premiums in audits led by industry specialist partners
Author(s) -
Bell Timothy B.,
Bryan David B.
Publication year - 2021
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.12739
Subject(s) - audit , business , accounting , quality audit , joint audit , internal audit
We use engagement‐level data from a Big 4 firm to examine whether industry specialist partners are associated with audit effectiveness, audit efficiency and fee premiums. First, we examine the relation of partner industry specialisation to audit effectiveness ratings made by the firm’s internal quality inspectors and find a positive association. Next, in tests using the effective audits subsample, we find that audits led by industry specialist partners have lower audit hours (i.e., audits are more efficient), higher total audit fees and audit fees per hour, and that both fee measures increase as efficiency increases.