A Study Of The Importance Of Certain Attributes To Clients Initial Selections Of Audit Firms: A Longitudinal And Stratified Approach

Abstract

This study examines the importance of certain accounting firm characteristicsreputation, personnel, industry experience, and feeto the selection of audit firms by publicly-traded corporations. Client perceptions of these attributes were assessed to determine: (1) possible longitudinal changes in the relative importance of these attributes to clients selections, and (2) possible concurrent differences in the relative importance of these attributes to two different client strata-large versus small corporations. Using conjoint analysis, interval measures of the relative importance of each firm attribute were determined. The results of this study indicate that large and small corporations have very different relative preferences for characteristics of audit firms. In addition the importance attached to certain attributes of audit firms by large and small clients appears to be stable over time.