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Effectiveness, efficiency, and fee premiums in audits led by industry specialist partners

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  • Timothy B. Bell
  • David B. Bryan

Abstract

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.

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  • Timothy B. Bell & David B. Bryan, 2021. "Effectiveness, efficiency, and fee premiums in audits led by industry specialist partners," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(3), pages 4513-4572, September.
    • Handle: RePEc:bla:acctfi:v:61:y:2021:i:3:p:4513-4572
    DOI: 10.1111/acfi.12739
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