The market for audit services. Evidence from voluntary auditor changes

W. Bruce Johnson*, Thomas Lys

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

275 Scopus citations


This paper argues that audit firms achieve competitive advantages through specialization, and that clients purchase audit services from the least cost supplier. Client-auditor realignments thus represent efficient responses to changes in client operations and activities over time. Results obtained from analyzing the financial characteristics and share price performance of corporations that changed auditors between 1973 and 1982 support the view that realignments can generally be attributed to cross-temporal changes in client characteristics and differences in audit firm cost structures.

Original languageEnglish (US)
Pages (from-to)281-308
Number of pages28
JournalJournal of Accounting and Economics
Issue number1-3
StatePublished - Jan 1990

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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