IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

The Effect of Audit Market Deregulation on the Pricing of Brand Name Reputation

  • Allen T. Craswell

    (University of Sydney)

  • Jere R. Francis

    (University of Missouri)

  • Stephen L. Taylor

    (University of Sydney)

Registered author(s):

    Between 1982 and 1987, the Australian audit market experienced an increase in price competition resulting from changes in professional rules governing advertising and marketing practices as well as the introduction of widespread audit tendering. Because these changes are generally assumed to have reduced any alleged ability of the Big Eight to earn oligopoly profits, they provide an opportunity to test alternative explanations for the observed Big Eight audit-fee premia. If the market was not competitive, the Big Eight premium may be the result of market imperfections and the changes in professional rules could be expected to lead to a decline in the premia. Alternatively, if the market was competitive and the premia were attributable to product differentiation, it would be sustainable notwithstanding deregulation of the market. The initial analysis of panel data of publicly reported audit fees for a six- year period suggests that reductions in real audit fees are more marked among Big Eight clients and occur more quickly in response to a change of auditor. However, using seemingly unrelated regression it appears that structural adjustments were made to the audit-fee process and the Big Eight premium did not decline over the six year period. This result does not support allegations that Big Eight fee premia result from a relatively uncompetitive audit market.

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below under "Related research" whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Paper provided by University of Sydney, Department of Accounting in its series Working Papers with number 001.

    as
    in new window

    Length:
    Date of creation:
    Date of revision:
    Handle: RePEc:wop:syacwp:001
    Contact details of provider: Phone: +61 2 9351 8083
    Web page: http://sydney.edu.au/business/Email:


    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:wop:syacwp:001. 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: (Thomas Krichel)

    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.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.