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Article Citation:
Jeff L. Payne (2008) The Influence of Audit Firm Specialization on Analysts’ Forecast Errors. AUDITING: A Journal of Practice & Theory: November 2008, Vol. 27, No. 2, pp. 109-136.
doi: http://dx.doi.org/10.2308/aud.2008.27.2.109

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The Influence of Audit Firm Specialization on Analysts’ Forecast Errors

Jeff L. Payne

SUMMARY: 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.

Received: February 2006; Accepted: January 2008

Cited by

Steven F. Cahan, Debra C. Jeter and Vic Naiker. (2011) Are All Industry Specialist Auditors the Same?. AUDITING: A Journal of Practice & Theory 30:4, 191-222
Online publication date: 1-Nov-2011.
Abstract | Full Text | PDF (479 KB) 
Anthony Catanach, James H. Irving, Susan Perry Williamsand Paul L. Walker. (2011) An Ex Post Examination of Auditor Resignations. Accounting Horizons 25:2, 267-283
Online publication date: 1-Jun-2011.
Abstract | Full Text | PDF (356 KB) 

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