TITLE

A Test of Audit Pricing in the Small-Client Segment: A Comment

AUTHOR(S)
Gist, Willie E.
PUB. DATE
March 1995
SOURCE
Journal of Accounting, Auditing & Finance;Spring95, Vol. 10 Issue 2, p223
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This study is the second to provide a richer test of the association between auditor size and audit fees by using three audit firm size classes in the small-client segment of the U.S. audit market. The finding of a Big 8 (now Big 6) price premium is consistent with Francis and Simon [1]. However, this price premium exists only with respect to local/regional firms. Francis and Simon showed that the Big 8 price premium exists with respect to both second-tier and local/regional firms. The present study also provides evidence of a second-tier price premium over local/regional firms. The results imply product differentiation to both Big 8 and second-tier firms. Plausible reasons for differences in results between the two studies are given.
ACCESSION #
11868575

 

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