The importance of audit profession development in emerging market countries

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59 Scopus citations


This study investigates the country-level development of the audit profession in emerging market countries and whether this development is associated with audit quality and auditor choice. I find that audit quality is higher for client companieslocated in countries with a more developed audit profession, after controlling for rule oflaw and investor protection. Specifically, Big 4 client companies' total and abnormalaccruals are both lower, and earnings are more conservative in countries with stronger Audit Profession Development (APD). However, these results hold only for companies audited by a Big 4 auditor. Results also indicate that stronger APD is associated with a greater likelihood that a client company hires a Big 4 auditor. My findings contribute to the literature that explores differences in audit quality and determinants of auditor choice, the literature that explores cross-country differences in audit professions, and research on the characteristics and effectiveness of audit institutions in emerging market economies.

Original languageEnglish (US)
Pages (from-to)1731-1764
Number of pages34
JournalAccounting Review
Issue number5
StatePublished - Sep 2011


  • Audit profession
  • Audit quality
  • Auditor choice
  • Developing countries
  • Emerging markets
  • International accounting

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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