Audit pricing in a reformed nonprofit market
In contrast to the extant research on audit fees of for-profit companies, literature on nonprofit audit fees is scant. In this paper, audit fee determinants of previous research are tested in a nonprofit market that is characterized by a relatively low dominance of BIG4 auditors, low litigation risk, small nonprofit entities, high levels of subsidization and recent legislative reforms. Using OLS on a sample of nonprofit entities, we find that some known determinants such as auditor size and client complexity hold their ground. However, our findings on client profitability and auditor industry specialization show that refinements of audit fee models need to incorporate audit market characteristics, agency problems and signaling.
|Date of creation:||Dec 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: ++ 32 (0) 9 264 34 61
Fax: ++ 32 (0) 9 264 35 92
Web page: http://www.ugent.be/eb
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Quick, Reiner, 2007. "[Rez.] Knechel, W. Robert; Naiker, Vic; Pacheco, Gail: Does Auditor Industry Specialization Matter? Evidence from Market Reaction to Auditor Switches, Auditing: A Journal of Practice & Theory, May 200," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 30560, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
- DeAngelo, Linda Elizabeth, 1981. "Auditor size and audit quality," Journal of Accounting and Economics, Elsevier, vol. 3(3), pages 183-199, December.
- Willekens, Marleen, 2003. "Reply to discussion of "Pricing and supplier concentration in the private client segment of the audit market: Market power or competition?"," The International Journal of Accounting, Elsevier, vol. 38(4), pages 461-464.
- Peecher, Mark E., 2003. "Discussion of "Pricing and Supplier Concentration in the Private Client Segment of the Audit Market: Market Power or Competition?"," The International Journal of Accounting, Elsevier, vol. 38(4), pages 457-460.
- W. Robert Knechel & Marleen Willekens, 2006. "The Role of Risk Management and Governance in Determining Audit Demand," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(9-10), pages 1344-1367.
- Mark A. Clatworthy & Howard J. Mellett & Michael J. Peel, 2002. "The Market for External Audit Services in the Public Sector: An Empirical Analysis of NHS Trusts," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 29(9&10), pages 1399-1439.
- Craswell, Allen T. & Francis, Jere R. & Taylor, Stephen L., 1995. "Auditor brand name reputations and industry specializations," Journal of Accounting and Economics, Elsevier, vol. 20(3), pages 297-322, December.
- 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.
- S. Verbruggen & J. Christiaens & K. Milis, 2009. "Can resource dependence and coercive isomorphism explain nonprofit organizations’ compliance with reporting standards?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 09/616, Ghent University, Faculty of Economics and Business Administration.
- Willekens, Marleen & Achmadi, Christina, 2003. "Pricing and supplier concentration in the private client segment of the audit market: Market power or competition?," The International Journal of Accounting, Elsevier, vol. 38(4), pages 431-455.
- 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, February.
When requesting a correction, please mention this item's handle: RePEc:rug:rugwps:11/764. 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: (Nathalie Verhaeghe)
If references are entirely missing, you can add them using this form.