Cahan, Steven; Godfrey , Jayne; Hamilton, Jane; Jeter, Debra
A report issued by the U.S. General Accounting Office (GAO) in 2003 identified auditors' industry expertise as a critical factor for firms choosing an auditor, and highlighted the extreme levels of auditor concentration in some industries. We posit that the investment opportunity set (IOS) plays a fundamental role in determining whether an industry is an attractive target for auditor specialization. When industryspecific IOS is high, specialist auditors make costly investments in...[Show more]
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