Abstract
The professional literature has provided evidence of discrimination against ethnic minority
professionals in a number of research contexts, including law, architecture, construction,
and health care. However, research on ethnicity-based discrimination in the accounting profession
has been sparser and has generally relied on ethnic minorities’ perceptions of discrimination
rather than actual discrimination. In this study, we complement and extend this
research by investigating whether ethnic minority audit partners are associated with lower
audit fees than nonethnic minority audit partners. We also consider whether the association
between ethnicity and audit fees depends on the status of the audit firm in which audit
partners work. We find that ethnic minority audit partners are associated with lower audit
fees and that this holds true only when they work in lower-status audit firms.
Supplementary analyses carried out on our data suggest that discrimination is more likely
to be performed by audit clients than by audit firms as we do not find evidence that audit
firms systematically and selectively allocate ethnic minority audit partners to clients with
specific characteristics (e.g., potentially less lucrative clients). Our study contributes to the
literature on ethnicity-based discrimination in the accounting profession, to the literature
on professional stereotypes, and to the audit pricing literature.
Original language | English |
---|---|
Pages (from-to) | 1-30 |
Number of pages | 30 |
Journal | JOURNAL OF ACCOUNTING AUDITING & FINANCE |
DOIs | |
Publication status | Published - 2024 |
Keywords
- accounting profession
- audit fees
- audit partners
- big-N
- discrimination
- ethnicity
- professional stereotypes