IDEAS home Printed from
   My bibliography  Save this paper

A Re-Examination Of The Industry Specialist Audit Fee Premium


  • Liang Jiang

    (ESSEC Business School - Essec Business School)

  • Anne Jeny-Cazavan

    () (ESSEC Business School - Essec Business School)

  • Sophie Audousset-Coulier

    (Department of accounting - Concordia University [Montreal, Canada])


This paper analyzes the effects of using various definitions and measures of auditor industry specialization in empirical audit research. Industry specialist (ISP) auditors are auditors who have developed a specific expertise in their industry and who are therefore able to provide higher quality audits. This industry expertise provides them with a superior reputation and allows them to obtain an industry specialist fee premium. On a sample of 29,726 US-listed firms over the 2000-2010 period, we computed and compared 35 ISP measures. We find that the use of different definitions of auditor industry specialization results in inconsistent classifications of audit firms as specialists (or not) in a given industry. We further demonstrate that this lack of consistency between ISP measures is significant and represents a serious measurement issue as it questions the validity of the ISP fee premium estimates. We find that the results regarding the significance, sign and magnitude of the fee premium paid to ISP auditors are strongly dependent on the choice of the ISP measure. Our analysis suggests that the measures of industry specialization employed in empirical research have a low degree of internal and external construct validity.

Suggested Citation

  • Liang Jiang & Anne Jeny-Cazavan & Sophie Audousset-Coulier, 2013. "A Re-Examination Of The Industry Specialist Audit Fee Premium," Post-Print hal-00962383, HAL.
  • Handle: RePEc:hal:journl:hal-00962383
    Note: View the original document on HAL open archive server:

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Shahina Amin & M. Shakil Quayes & Janet M. Rives, 2004. "Poverty and Other Determinants of Child Labor in Bangladesh," Southern Economic Journal, Southern Economic Association, vol. 70(4), pages 876-892, April.
    2. Sonia Bhalotra, 2007. "Is Child Work Necessary?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(1), pages 29-55, February.
    3. E. delap, 2001. "Economic and Cultural Forces in the Child Labour Debate: Evidence from Urban Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 37(4), pages 1-22.
    4. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-427, June.
    5. Ravallion, Martin & Wodon, Quentin, 2000. "Does Child Labour Displace Schooling? Evidence on Behavioural Responses to an Enrollment Subsidy," Economic Journal, Royal Economic Society, vol. 110(462), pages 158-175, March.
    6. M. Najeeb Shafiq, 2007. "Household Rates of Return to Education in Rural Bangladesh: Accounting for Direct Costs, Child Labour, and Option Value," Education Economics, Taylor & Francis Journals, vol. 15(3), pages 343-358.
    7. Beegle, Kathleen & Dehejia, Rajeev H. & Gatti, Roberta, 2006. "Child labor and agricultural shocks," Journal of Development Economics, Elsevier, vol. 81(1), pages 80-96, October.
    Full references (including those not matched with items on IDEAS)

    More about this item


    auditor industry specialists; audit fees; construct validity; spécialisation sectorielle; honoraires audit; validité de construit;

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-00962383. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.