Big 4 or 4 Big:Is There A Difference in Audit Quality?

摘要

1. Introduction Research over the past three decades has linked audit quality with large audit finns (Hay, Knechel, and Wong, 2006) and has often been proxied with the ability to charge a fee premium (Simunic,1980). Pre vious studies offer a variety of plausible reasons for the observation of a fee premium. It is proposed that audit clients have a heterogeneous de mand for audit quality, taking into account the costs and benefits accru ing from a quality audit and, as a result, larger audit firms serve clients with a need for a higher quality audit (Blokdijk, Drieenhuizen, Simu nic, and Stein, 2006).