Partner industry specialization and audit pricing in the United Kingdom

Khairul Ayuni Mohd Kharuddin, Ilias G Basioudis, David Hay

Research output: Contribution to journalArticlepeer-review


This study investigates the effects of audit partner industry specialization on audit pricing in the UK market. The mandatory disclosure of the name of the engagement partner in the auditor reports of UK public listed companies took effect from April 2008. Given that the identity of the audit partner is now observable to users of financial statements, it can be argued that there may be an incentive for partner-level differentiation in auditing products, and hence, audit quality. This research examines whether auditor industry expertise in the UK is driven by firm, office, or partner level expertise. The fee premium observed in the study is a joint product of firm and partner level of industry expertise with the highest premium occurring when the client is also audited by an industry leading partner. This finding lends support to the argument that industry expertise is uniquely attributable to the individual audit partner’s human capital in terms of their knowledge and experience from leading audit engagements in a particular industry. It also provides evidence that some fee premiums earned by audit firms and documented in prior literature are most probably the product of the individual audit partner’s expertise.
Original languageEnglish
Pages (from-to)57-70
Number of pages14
JournalJournal of International Accounting, Auditing and Taxation
Early online date18 May 2019
Publication statusPublished - 1 Jun 2019

Bibliographical note

© 2019, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International


  • Audit fee premium
  • Audit partner
  • Audit pricing
  • Industry specialization
  • United Kingdom


Dive into the research topics of 'Partner industry specialization and audit pricing in the United Kingdom'. Together they form a unique fingerprint.

Cite this