The Association between Brand Name Reputation, Industry Specialization and Auditor Market Share: Evidence from the Cancellation of Audit Fee Floor

The tactic of audit price-cutting has been popular since the Fair Trade Commission, Executive Yuan, R.O.C. abolished the long-standing policy of an audit fee floor in 1998. Auditors emphasize their responsiveness strategies to maintain and enlarge their excess market share. This study explores auditors' responsiveness strategies, especially focusing on brand name reputation and industry specialization in a highly competitive market. Empirically, the results show that, after canceling the audit fee floor, brand name reputation of auditors enlarges their range of excess market share. Contrary to this point of view, industry specialization remains intact. Consequently, the strategies of brand name reputation and industry specialization can successfully help auditors to respond to the increasing competition in audit market.