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Evidence on (the lack of) audit-quality differentiation in the private client segment of the belgian audit market


  • Heidi Vander Bauwhede
  • Marleen Willekens


This paper contributes to the empirical audit-quality literature and provides evidence on (the lack of) audit-quality differentiation in the private client segment of the Belgian audit market. Auditor size is used as audit-quality proxy. Prior evidence on audit-quality differentiation between Big Six and non-Big Six auditors in the private client segment of the Belgian audit market is mixed. In this paper we investigate whether these mixed results stem from the inability of the dichotomous Big Six/non-Big Six variable to capture auditor-size differences in a less concentrated audit market. To that end we examine whether alternative continuous measures of audit-firm size (i.e. auditor market share, number of audit-firm clients, number of partners in the audit firm, total assets and operating profit of the audit firm) have a constraining impact on earnings management in a large sample of privately held Belgian companies (n = 1,302). Overall, we do not find evidence that is supportive of quality differentiation in the private client segment of the Belgian audit market.

Suggested Citation

  • Heidi Vander Bauwhede & Marleen Willekens, 2004. "Evidence on (the lack of) audit-quality differentiation in the private client segment of the belgian audit market," European Accounting Review, Taylor & Francis Journals, vol. 13(3), pages 501-522.
  • Handle: RePEc:taf:euract:v:13:y:2004:i:3:p:501-522
    DOI: 10.1080/0963818042000237106

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    Cited by:

    1. S. Verbruggen & J. Christiaens & A. Reheul & T. Van Caneghem, 2011. "Audit pricing in a reformed nonprofit market," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/764, Ghent University, Faculty of Economics and Business Administration.
    2. Reheul, Anne-Mie & Van Caneghem, Tom & Verbruggen, Sandra, 2011. "Auditor choice in the Belgian nonprofit sector: a behavioral perspective," Working Papers 2011/36, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
    3. Gabriele Jahn & Matthias Schramm & Achim Spiller, 2005. "The Reliability of Certification: Quality Labels as a Consumer Policy Tool," Journal of Consumer Policy, Springer, vol. 28(1), pages 53-73, December.
    4. repec:eee:crpeac:v:21:y:2010:i:8:p:669-682 is not listed on IDEAS
    5. Seyed Mahmoud Hosseinniakani & Helena Inacio & Rui Mota, 2014. "A Review on Audit Quality Factors," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(2), pages 243-254, April.
    6. repec:spr:schmbr:v:18:y:2017:i:2:d:10.1007_s41464-017-0028-9 is not listed on IDEAS
    7. repec:fan:frfrfr:v:html10.3280/fr2017-001003 is not listed on IDEAS
    8. Tom Van Caneghem, 2010. "Audit pricing and the Big4 fee premium: evidence from Belgium," Managerial Auditing Journal, Emerald Group Publishing, vol. 25(2), pages 122-139, January.
    9. Arnedo, Laura & Lizarraga, Fermin & Sanchez, Santiago, 2007. "Does public/private status affect the level of earnings management in code-law contexts outside the United States? A study based on the Spanish case," The International Journal of Accounting, Elsevier, vol. 42(3), pages 305-328.
    10. repec:eee:jiaata:v:21:y:2012:i:1:p:62-78 is not listed on IDEAS
    11. repec:dau:papers:123456789/1073 is not listed on IDEAS
    12. repec:hur:ijaraf:v:7:y:2017:i:2:p:117-130 is not listed on IDEAS
    13. Manuel Cano Rodríguez & Santiago Sánchez Alegría, 2012. "The value of audit quality in public and private companies: evidence from Spain," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 16(4), pages 683-706, November.

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