| Summary: | 博士 === 雲林科技大學 === 管理研究所博士班 === 97 === Recent allegations of accounting fraud, such as in Enron and WorldCom, have triggered a closer examination of the topic of auditor quality. From the perspective of the public accounting firm, this study provides a conceptual framework to identify the association among auditor size, auditor quality and performance. This study aims to investigate if auditor size affects firm’s performance both directly and indirectly through auditor quality and if the extent of association varies between accounting firms. Empirical results confirm the overall auditor size to firm’s performance relation falls into two components: a direct effect of auditor size and an indirect effect of auditor quality. Further, this study finds the marginal contributions of auditor size and auditor quality on firm’s performance for public company audit market firms are significantly higher than for non-public company audit market firms. Apart from providing some new evidence in the important area of auditor quality, this study also reveals interesting implications for managers and policy makers.
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