The Effects of Client Bargaining Power on Audit Pricing in Voluntary and Involuntary Audit Switching Environment
The Effects of Client Bargaining Power on Audit Pricing in Voluntary and Involuntary Audit Switching Environment
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作者：
-Frendy;F. Takeda
本文以日本两家主要会计师事务所的解散为例，分析了自愿和非自愿审计转换行为对客户议价能力和审计定价之间的影响。我们以2005年至2015年的日本上市公司为样本，发现与没有更换审计师的客户相比，议价能力强的客户更换小型审计师支付的审计费用更低。非自愿和自愿转换审计师之间，买方在费用谈判中的议价能力的杠杆力是相当的。从长期来看，客户的议价能力杠杆，以降低审计费用的客户谁不自觉地转向附属于已倒闭的审计师的审计公司。然而，随着审计市场供给约束的增加，议价能力较弱的客户在三大时期失去了杠杆能力。本研究有助于辩论的强制性审计事务所轮换监管对审计定价的影响，因为我们的论文提供了一个准控制的环境，比较公司在自愿和非自愿的审计转换环境。
This paper employs the dissolution of two major Japanese audit firms to identify voluntary and involuntary audit switching behavior and how does it affect the interaction between client bargaining power and audit pricing. Using a sample of listed Japanese companies from 2005 to 2015, we find that clients with high bargaining power switching to smaller auditors pay lower audit fees compared to clients not switching auditors. The leverage power of buyers’ bargaining power in negotiating fees is comparable between involuntary and voluntary switching auditors. In the long-term, the clients' bargaining power leverage to lower audit fees is enhanced for clients who involuntarily switched to audit firms affiliated with the defunct auditors. However, clients with weaker bargaining power lose their leverage power as audit market supply constraints increased in the Big 3 period. This study contributes to the debate on the effect of mandatory audit firm rotation regulation on audit pricing as our paper provides a quasi-controlled environment that compares companies in voluntary and involuntary audit switching environment.