Auditor Industry Specialization and the Earnings Response Coefficient

摘要: This study compares the earnings response coefficients of clients industry specialist and non-specialist auditors. Prior work (e.g., DeAngelo 1981) has suggested that auditors offer different levels audit quality, in to client variations demand for quality (Watts Zimmerman 1986). One component difference across is specialization (Craswell et al. 1995). Empirical evidence on effect proxies such as fees, auditor litigation compliance with accounting standards mixed. examines hypothesis leads a better by comparing audited specialists those not specialists. Teoh Wong (1993) argue positively associated client's therefore coefficient (ERC), which responsiveness stock market information about unexpected earnings. They present one measure auditors' brand-name (Big 6 or not), ERC. paper extends this argument examining another facet specialization, The results suggest that, after controlling previously established correlates ERC, well affiliation, have higher ERCs than