Auditor changes following big eight mergers with non-big eight audit firms

Paul Healy, Thomas Lys

Research output: Contribution to journalArticlepeer-review

41 Scopus citations


This paper examines the reaction of clients of "non-Big Eight" audit firms to mergers of their auditors with "Big Eight" firms. We postulate that a non-Big Eight audit firm's clients will retain a Big Eight acquirer following a merger if they benefit from the Big Eight firm's specialized services and/or reputation. Clients that do not have these economic incentives to retain the Big Eight firm are more likely to change to another non-Big Eight audit firm following the merger. Empirical tests of the characteristics of clients that remain with a Big Eight acquirer or change to another smaller auditor following an audit merger generally support our hypotheses.

Original languageEnglish (US)
Pages (from-to)251-265
Number of pages15
JournalJournal of Accounting and Public Policy
Issue number4
StatePublished - 1986

ASJC Scopus subject areas

  • Accounting
  • Sociology and Political Science

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