Open Journal of Accounting

Volume 7, Issue 1 (January 2018)

ISSN Print: 2169-3404   ISSN Online: 2169-3412

Google-based Impact Factor: 0.71  Citations  

Big N and Non-Big N Audit Pricing Competitiveness in Japan during Transition from Big 4 to Big 3 Period

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DOI: 10.4236/ojacct.2018.71004    949 Downloads   3,294 Views  Citations
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ABSTRACT

The 2006 dissolution of PwC ChuoAoyama significantly changed market share composition of Japanese audit firms which marked the transition from Big 4 period to Big 3 period. This study aims to investigate audit market pricing competitiveness between Big N and non-Big N auditors using a sample of Japanese firms listed in the First Section of Tokyo Stock Exchange during the transition from Big 4 period (2004-2005) to Big 3 period (2006-2011). This paper analyzes audit market pricing competitiveness between Big N and non-Big N auditors by employing panel fixed effects multivariate regression with audit fee as the dependent variable and interaction between audit fee premium and client segment size as variable of interest while controlling for other variables affecting audit fee. The empirical results indicate a non-competitive audit pricing market between Big N and non-Big N auditors where Big N auditors earn increasingly higher audit fee as client segment size becomes larger.

Share and Cite:

Frendy (2018) Big N and Non-Big N Audit Pricing Competitiveness in Japan during Transition from Big 4 to Big 3 Period. Open Journal of Accounting, 7, 42-72. doi: 10.4236/ojacct.2018.71004.

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