Beattie, V. and Fearnley, S. (1995) The Importance of Audit Firm Characteristics and the Drivers of Auditor Change in UK Listed Companies. Accounting and Business Research, 25(100), pp. 227-239.
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Beattieaccbusres1995.pdf 1MB |
Abstract
This paper explores the importance of audit firm characteristics and the factors motivating auditor change based on questionnaire responses from 210 listed UK companies (a response rate of 70%). Twenty-nine potentially desirable auditor characteristics are identified from the extant literature and their importance elicited. Exploratory factor analysis reduces these variables to eight uncorrelated underlying dimensions: reputation/quality; acceptability to third parties; value for money; ability to provide non-audit services; small audit firm; specialist industry knowledge; non-Big Six large audit firm; and geographical proximity. Insights into the nature of 'the Big Six factor' emerge. Two thirds of companies had recently considered changing auditors; the main reasons cited being audit fee level, dissatisfaction with audit quality and changes in top management. Of those companies that considered change, 73% did not actually do so, the main reasons cited being fee reduction by the incumbent and avoidance of disruption. Thus audit fee levels are both a key precipitator of change and a key factor in retaining the status quo.
Item Type: | Articles |
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Status: | Published |
Refereed: | Yes |
Glasgow Author(s) Enlighten ID: | Beattie, Prof Vivien |
Authors: | Beattie, V., and Fearnley, S. |
Subjects: | H Social Sciences > HF Commerce > HF5601 Accounting |
College/School: | College of Social Sciences > Adam Smith Business School > Accounting and Finance |
Journal Name: | Accounting and Business Research |
Publisher: | Institute of Chartered Accountants in England and Wales |
ISSN: | 0001-4788 |
Copyright Holders: | Copyright © 1995 Institute of Chartered Accountants in England and Wales |
First Published: | First published in Accounting and Business Research 25(100):227-239 |
Publisher Policy: | Reproduced with the permission of the publisher |
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