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Audit Firm Industry Specialization As A Differentiation Strategy: Evidence From Fees Charged To Firms Going Public, Brian W. Mayhew, Michael S. Wilkins
Audit Firm Industry Specialization As A Differentiation Strategy: Evidence From Fees Charged To Firms Going Public, Brian W. Mayhew, Michael S. Wilkins
Michael S Wilkins
This paper examines IPO assurance fees to assess the use of industry specialization as a differentiation strategy by audit firms. Theory suggests that as an audit firm’s share of a client industry increases their costs will decrease and their service quality to that industry will increase. In this setting, the impact of industry specialization on fees is indeterminate. We extend existing theory by considering both the supply and the demand for industry specialization. We conclude that the market for audit services is generally price-competitive, suggesting that auditors will be forced to share cost savings with clients. However, when an audit …
The Interaction Among Multiple Governance Mechanisms At Young, Newly Public Firms, Tammy K. Berry, L. Paige Fields, Michael S. Wilkins
The Interaction Among Multiple Governance Mechanisms At Young, Newly Public Firms, Tammy K. Berry, L. Paige Fields, Michael S. Wilkins
Michael S Wilkins
We focus on the relations among inside ownership, board composition, unaffiliated block ownership, and compensation structure for a sample of firms following their IPOs. Specifically, we follow firms for up to eleven years after their IPOs and examine the full sample and subsamples of firms that survive, are acquired, or that file for bankruptcy during the sample period. We find that as CEO ownership declines, board independence, board seats held by venture capitalists, and unaffiliated block ownership increase. Our findings suggest that as inside ownership decreases alternative governance mechanisms evolve to help mitigate the resulting increase in agency costs. Interestingly, …