volume 30, issue 3, P206-225 2015
DOI: 10.1108/maj-06-2014-1046
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Lynn Johnson, Terrence B. O'Keefe

Abstract: Purpose – The purpose of this study is to test whether the realization rate on audit engagements increases with auditor tenure in competitive markets, suggesting the presence of initial audit lowballing. Design/methodology/approach – Using regression analysis, we test this hypothesis with fee- and cost-related data from a sample of local governments audited by a single audit firm. Based on representations of the firm, we …

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