No abstract

Research quality is often measured by the quality of the journals in which articles are published. This article looks at 1,867 articles published in six highly-rated UK and six highly-rated US academic journals from 1996 to 2000. The authors publishing in the UK journals come mainly from UK and US institutions, but just over a third come from other countries. However, almost ninety per cent of authors publishing in top US journals come from US institutions. Contributions from authors from institutions in non-English speaking countries in these top journals are rare. The implications of this research are that although accounting is growing increasingly international, academic research, especially in the top US journals remains stubbornly nationally-orientated. Copyright Blackwell Publishers Ltd, 2005.

Despite the growing literature on the market for audit services, to date no study has examined the determinants of audit fees for the smallest auditees in the market. This study therefore provides some new theory and evidence on the determinants of the audit fees of micro-firms operating in the UK manufacturing sector. A key finding of the study is that in the highly competitive market under consideration, independent small auditees willingly paid a premium to be audited by a mid-tier or a (then) Big Six auditor, with the latter commanding the higher premium. It is concluded that these findings are consistent with Big Six (and, to a lesser extent, mid-tier) auditors commanding a brand premium stemming from the (perceived) higher quality audit conducted by large auditors, for which small firms are willing to pay a premium in order to benefit from associated 'reputational' and 'signalling' effects. The common finding that the explanatory power of audit fee models declines as a function of firm size is also examined. The empirical analysis confirms this effect, but evidence is offered that, rather than resulting from model misspecification, it is likely that audit prices of the smallest auditees are relatively insensitive to variations in corporate size, which may result from lower incremental economies of scale and minimum pricing.

In recent years there has been a growing debate, in the academic, professional and popular literature, on the audit ‘expectation gap’ and the role and independence of the auditor. As noted by Waller (1991): ‘Much of the criticism of auditors concerns an apparent lack of impartiality. Outsiders feel that independence is compromised… who knows what short cuts are taken by auditors keen to keep “well in” with management for the sake of winning profitable consultancy work to supplement the audit fee?’