Journal of
Marketing Development and Competitiveness






Scholar Gateway


Abstracts prior to volume 5(1) have been archived!

Issue 5(1), October 2010 -- Paper Abstracts
Girard  (p. 9-22)
Cooper (p. 23-32)
Kunz-Osborne (p. 33-41)
Coulmas-Law (p.42-46)
Stasio (p. 47-56)
Albert-Valette-Florence (p.57-63)
Zhang-Rauch (p. 64-70)
Alam-Yasin (p. 71-78)
Mattare-Monahan-Shah (p. 79-94)
Nonis-Hudson-Hunt (p. 95-106) 



JOURNAL OF ACCOUNTING AND FINANCE 


Customer-Base Concentration and Audit Pricing

Author(s): John Daniel Eshleman, Yun Ke, Shuo Li

Citation: John Daniel Eshleman, Yun Ke, Shuo Li, (2018) "Customer-Base Concentration and Audit Pricing",  Journal of Accounting and Finance, Vol. 18, ss. 4, pp.56-79

Article Type: Research paper

Publisher: North American Business Press

Abstract:

This paper examines whether and how auditors’ pricing decisions are affected by their clients’ customer base. We first document that customer concentration is negatively related to audit fees. This negative relationship is stronger for clients whose customers have higher costs of switching suppliers and clients who have high relationship-specific investments with their major customers. The effect of concentration on fees also depends on which stage of the firm life cycle the firm is in. The discount is strongest for firms in the growth and maturity stages, and there is actually a fee premium for firms in the decline stage. These results are robust to several robustness tests. In additional analyses, we find that customer concentration is associated with a lower likelihood of accounting restatements, indicating higher audit quality.