Please use this identifier to cite or link to this item: http://hdl.handle.net/11718/16630
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dc.contributor.authorJacob, Joshy
dc.contributor.authorDesai, Naman
dc.contributor.authorAgarwalla, Sobhesh Kumar
dc.date.accessioned2015-11-10T06:21:57Z
dc.date.available2015-11-10T06:21:57Z
dc.date.copyright2015
dc.date.issued2015
dc.identifier.urihttp://hdl.handle.net/11718/16630
dc.description.abstractIn this study we examine the fee premiums earned by Big 4 auditors (B4As) in India. We then try to determine the primary cause of the fee premiums in an Indian context. The B4As charge fee premiums for two primary reasons. First they are considered to be a potential indemnifier of losses for the stakeholders of the company. Second they provide a better quality of audit which improves the quality of reported earnings. Since the legal regime in India in significantly less stringent and the risk of auditor litigations is relatively low, B4A premiums in India are most likely to be driven by the need for superior audit quality. The results of our analysis indicate that B4As earn significantly higher fees than Non-Big 4 auditors (NB4As) in India. However there is no difference in the quality of audit provided by the B4As and NB4As as evidenced by the quality of reported earnings. Our results also indicate that B4As earn significantly higher abnormal fees. However, unlike the results of prior research, such abnormal fees are not associated with reduction in the quality of audit and reported earnings. After eliminating the two primary causes of B4A fee premiums, we posit that the need for B4As in India is primarily driven by the need to “signal” a superior quality of reported information.en_US
dc.language.isoenen_US
dc.publisherIndian Institute of Management Ahmedabaden_US
dc.subjectBig 4 auditorsen_US
dc.subjectB4Aen_US
dc.titleAre big 4 audit fee premiums always related to superior audit quality? evidence from India’s unique audit marketen_US
dc.typeWorking Paperen_US
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