Review of Accounting Studies

, Volume 9, Issue 1, pp 35–58 | Cite as

Audit Firm Industry Specialization and Client Disclosure Quality

  • Kimberly A. Dunn
  • Brian W. Mayhew


This paper provides evidence that clients select auditors as part of their overall disclosure strategy. We hypothesize that in addition to higher quality audits, industry-specialist audit firms assist clients in enhancing disclosures. We also posit that the choice of an industry-specialist auditor signals a client’s intention to provide enhanced disclosures. However, we predict that industry-specialist audit firms are less important in regulated industries where enhanced disclosures add little value. Consistent with our hypotheses, we document a positive association between industry-specialist audit firms and analysts’ rankings of disclosure quality in unregulated industries, but no relation in regulated industries.

auditor industry specialization disclosure quality regulated industries 


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Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  1. 1.School of AccountancyFlorida Atlantic UniversityBoca Raton

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