Abstract
ABSTRACT This study examines whether and how individual-level auditor industry expertise affects audit pricing and audit quality. Using 11,650 firm-year observations from China, where an audit report must be signed by two auditors, we examine the industry expertise of both signing auditors and find that expert signing auditors charge higher audit fees and provide higher quality audits. We also explore the role of fee premiums on the expertise-quality association and find that the positive expertise-quality association is moderated by fee premiums charged by specialist auditors. Finally, we find that engagement auditor expertise, either alone or in conjunction with review auditor expertise, is positively associated with audit fees and audit quality. Data Availability: Data used in this study are publicly available from the sources described herein. JEL Classifications: M4; M42.
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