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Auditor industry specialization and earnings response coefficient: a New Zealand perspective

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(694.6 KB)

Date

2011

Authors

Supervisor

Habib, Ahsan

Item type

Thesis

Degree name

Master of Business

Journal Title

Journal ISSN

Volume Title

Publisher

Auckland University of Technology

Abstract

The purpose of this research is to examine the relationship between auditor industry specialization (as a proxy for audit quality) and Earnings Response Coefficient (ERC) in New Zealand. Previous research in this field has identified a significant positive correlation between industry specialization of auditors and ERC in other countries. The unique market characteristics of New Zealand provide a new setting to test the hypothesis that companies audited by industry specialized Big 4 audit firms have higher ERC than companies audited by non-specialist Big 4 audit firms. This study is carried out with a sample of NZX listed companies for the time period 2000 to 2009. Using an established model (Balsam, Krishnan and Yang, 2003), the study finds that industry specialization of auditors is not a significant factor which influences ERC in New Zealand. The results show that the established relationship between auditor industry specialization and ERC in other countries does not hold true for the market environment in New Zealand.

Description

Keywords

Auditor Specialization, Earnings Response coefficient, Auditing, ERC, New Zealand, Specialization, Accounting

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DOI

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Permanent link

https://hdl.handle.net/10292/2561

Collections

Masters Dissertations