The Pricing of National and CitySpecific Reputations for Industry Expertise in the U.S. Audit Market Academic Article uri icon


  • The pricing of Big 5 industry leadership in the U.S. audit market is investigated using audit fee disclosures for the 20002001 fiscal years and the joint nationalcity framework in Ferguson et al. (2003). There is a significant fee premium of 19 percent on those engagements where Big 5 auditors are both the nationally top-ranked auditor and the city-level industry leader in the city where the client is headquartered, indicating that national and city-specific industry leadership jointly affect auditor reputation and pricing. However, there is never a premium in any tests for auditors that are national industry leaders alone without also being city-specific industry leaders, indicating that national leadership by itself does not result in a premium. The evidence is mixed with respect to city-specific industry leaders alone that are not also national industry leaders. While there is a premium of 8 percent in the primary tests, this result is inconclusive as it does not hold in all sensitivity analyses.

published proceedings

  • The Accounting Review

author list (cited authors)

  • Francis, J. R., Reichelt, K., & Wang, D.

citation count

  • 595

complete list of authors

  • Francis, Jere R||Reichelt, Kenneth||Wang, Dechun

publication date

  • January 2005