AUDIT FEES AND AUDITOR CHANGE; AN INVESTIGATION OF THE PERSISTENCE OF FEE REDUCTION BY TYPE OF CHANGE
利用1991年英国横截面数据，研究审计师变更是否伴随费用削减及后续恢复，发现自愿变更导致显著费用下降，而非自愿变更（如事务所并购）则费用上升，支持低价揽客行为。
Despite concern expressed over ‘low‐balling’ or competitive price reduction in the market for audit services, the only empirical investigation of the relationship between initial audit fees, fee recovery and auditor change which has been carried out is by Simon and Francis (1988) using US cross‐sectional data, although Pong and Whittington (1994, forthcoming) examine the impact on first year fees. We investigate the impact of auditor change on cross‐sectional UK data for 1991 with the aim of discovering whether there is any evidence of price cutting and subsequent price recovery in a European, rather than a US context. We find that there is evidence of such a phenomenon, and investigate further to see whether this effect is robust with respect to the definition used of ‘auditor change’, and whether the effect varies according to whether the old auditor was a ‘Big Six’ or ‘non‐Big Six’ firm. We find that the largest reductions (controlling for auditor size) are experienced by firms changing to ‘Big Six’ firms. We further show that involuntary changes (by auditor acquisition) are associated with positive (although statistically insignificant) increases in fees, whereasvoluntary changesare associated with negative (andsignificant) feereductions. These effects are shown to be robust with respect to model specification. This suggests that fee reductions cannot be ascribed to economies of scale or scope, but is consistent with a ‘low‐balling’ model of behaviour.