The influence of audit firm specialization on analysts' forecast errors

Research output: Contribution to journalArticlepeer-review

42 Scopus citations

Abstract

This study investigates audit firm specialization in settings where managers have incentives to modify earnings to achieve analysts' earnings forecasts. The results indicate that audit firms that have a large market share of clients within a particular industry, and audit firms that receive a significant portion of their firm revenues from a specific industry, are associated with audited financial statement earnings that increase absolute levels of analysts' forecast error and are less likely to just meet or beat analysts' forecasts.

Original languageEnglish
Pages (from-to)109-136
Number of pages28
JournalAuditing
Volume27
Issue number2
DOIs
StatePublished - Nov 2008

Keywords

  • Analysts' forecast error
  • Audit quality
  • Auditor specialization

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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