The role of auditee profitability in pricing new audit engagements

Auditing

Volumn 19, Issue 1, 2000, Pages 156-167

  Walker, Paul L ^a   Casterella, Jeffrey R ^a  

^a NONE

Author keywords

Audit fees; Audit risk; Discounting; Lowballing

Indexed keywords

EID: 0039383352     PISSN: 02780380     EISSN: None     Source Type: Journal    
DOI: 10.2308/aud.2000.19.1.157     Document Type: Article

References (27)

1. Abelson, R. 1997. Why some auditors like the taste of leftovers. New York Times (March 29): Section 3, 1.
2. American Institute of Certified Public Accountants (AICPA). 1991. SEC Practice Section and Public Oversight Board Combined Annual Report. New York, NY: AICPA.
3. Bamber, E. M., L. S. Bamber, and M. P. Schoderbek. 1993. Audit structure and other determinants of audit report lag: An empirical analysis. Auditing: A Journal of Practice & Theory 12: 1-23.
4. Berton, L. 1995. Big accounting firms weed out risky clients. Wall Street Journal (June 26): B1, B6.
5. Butterworth, S., and K. A. Houghton. 1995. Auditor switching: The pricing of audit services. Journal of Business Finance & Accounting 22: 323-344.
6. Dillon, W. R., and M. Goldstein. 1984. Multivariate Analysis. New York, NY: Wiley.
7. Ettredge, M., and R. Greenberg. 1990. Determinants of fee cutting on initial audit engagements. Journal of Accounting Research 28: 198-210.
8. Francis, J. R., and D. T. Simon. 1987. A test of audit pricing in the small-client segment of the U.S. audit market. The Accounting Review 62: 145-157.
9. Gist, W. E. 1992. Explaining variability in external audit fees. Accounting and Business Research 23: 79-84.
10. Greene, W. H. 1993. Econometric Analysis. New York, NY: Macmillan Publishing Company.
11. Gregory, A., and P. Collier. 1996. Audit fees and auditor change: An investigation of the persistence of fee reduction by type of change. Journal of Business Finance & Accounting 23: 13-28.
12. Journal of Accountancy. 1998. News report: Revised ethics on confidentiality and low-balling. (March): 26-27.
13. Krishnan, J., and J. Krishnan. 1997. Litigation risk and auditor resignation. The Accounting Review 72: 539-560.
14. Margheim, L., and T. Kelley. 1992. The perceived effects of fixed fee audit billing arrangements. Accounting Horizons 6: 62-75.
15. Neter, J., W. Wasserman, and M. H. Kutner. 1985. Applied Linear Statistical Models. Homewood, IL: Irwin.
16. O'Keefe, T. B., D. A. Simunic, and M. T. Stein. 1994. The production of audit services: Evidence from a major public accounting firm. Journal of Accounting Research 32: 241-261.
17. Palmrose, Z-V. 1986. Audit fees and auditor size: Further evidence. Journal of Accounting Research 24: 91-110.
18. Pearson, T., and G. Trompeter. 1994. Competition in the market for audit services: The effect of supplier concentration on audit fees. Contemporary Accounting Research 11: 115-135.
19. Pong, C. M., and G. Whittington. 1994. The determinants of audit fees: Some empirical models. Journal of Business Finance & Accounting 21: 1071-1095.
20. Rubin, M. A. 1988. Municipal audit fee determinants. The Accounting Review 63: 219-236.
21. Simon, D. T., and J. R. Francis. 1988. The effects of auditor change on audit fees: Tests of price cutting and price recovery. The Accounting Review 63: 255-269.
22. Simunic, D. 1980. The pricing of audit services: Theory and evidence. Journal of Accounting Research 18: 161-190.
23. _, and M. T. Stein. 1996. The impact of litigation risk on audit pricing: A review of the economics and the evidence. Auditing: A Journal of Practice & Theory 15: 119-134.
24. Stein, M. T., D. A. Simunic, and T. B. O'Keefe. 1994. Industry differences in the production of audit services. Auditing: A Journal of Practice & Theory 13: 128-142.
25. Turpen, R. A. 1990. Differential pricing on auditors' initial engagements: Further evidence. Auditing: A Journal of Practice & Theory 9: 60-75.
26. Wallace, W. A. 1984. Internal auditors can cut outside CPA costs. Harvard Business Review 62: 16, 20.
27. Zmijewski, M. E. 1984. Methodological issues related to the estimation of financial distress prediction models. Journal of Accounting Research 22: 59-82.