{"title":"The Big 4 effect for new audit services: The case of the Danish COVID‐19 fixed‐cost business‐support scheme","authors":"Morten Holm, Thomas Riise Johansen","doi":"10.1111/ijau.12363","DOIUrl":null,"url":null,"abstract":"This study investigates the Big 4 effect for a new‐to‐the‐world audit service. Based on unique data from the Danish COVID‐19 fixed cost support scheme we analyse differences in audit fees and two measures of audit quality across Big 4 and non‐Big 4 engagements. Our findings suggest that firms engaging with Big 4 auditors experience more successful outcomes in the application process and are willing to pay a Big 4 premium for comparable assurance services. Clients of Big 4 auditors are, on average, more likely to receive full compensation, and experience fewer rejections during the application process than clients of non‐Big 4 auditors. This research has implications for policymakers and companies.","PeriodicalId":47092,"journal":{"name":"International Journal of Auditing","volume":null,"pages":null},"PeriodicalIF":2.1000,"publicationDate":"2024-07-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Auditing","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1111/ijau.12363","RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This study investigates the Big 4 effect for a new‐to‐the‐world audit service. Based on unique data from the Danish COVID‐19 fixed cost support scheme we analyse differences in audit fees and two measures of audit quality across Big 4 and non‐Big 4 engagements. Our findings suggest that firms engaging with Big 4 auditors experience more successful outcomes in the application process and are willing to pay a Big 4 premium for comparable assurance services. Clients of Big 4 auditors are, on average, more likely to receive full compensation, and experience fewer rejections during the application process than clients of non‐Big 4 auditors. This research has implications for policymakers and companies.
期刊介绍：
In addition to communicating the results of original auditing research, the International Journal of Auditing also aims to advance knowledge in auditing by publishing critiques, thought leadership papers and literature reviews on specific aspects of auditing. The journal seeks to publish articles that have international appeal either due to the topic transcending national frontiers or due to the clear potential for readers to apply the results or ideas in their local environments. While articles must be methodologically and theoretically sound, any research orientation is acceptable. This means that papers may have an analytical and statistical, behavioural, economic and financial (including agency), sociological, critical, or historical basis. The editors consider articles for publication which fit into one or more of the following subject categories: • Financial statement audits • Public sector/governmental auditing • Internal auditing • Audit education and methods of teaching auditing (including case studies) • Audit aspects of corporate governance, including audit committees • Audit quality • Audit fees and related issues • Environmental, social and sustainability audits • Audit related ethical issues • Audit regulation • Independence issues • Legal liability and other legal issues • Auditing history • New and emerging audit and assurance issues
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