We study the determinants of auditor industry specialization, the impact of specialization on fees and audit quality, and a regulator's optimal choice of audit standards in the presence of specialization. In industries with correlated firm values, a specialist auditor enjoys synergies from information spillovers between clients. These spillovers, however, only induce a specialist to decrease audit effort when the cost of effort and the prior precision of the firms' values are low. We derive empirical predictions about the determinants of specialization, and show that specialization benefits firms through lower expected fees and higher audit reporting quality, but only enhances the usefulness of reports to investors when the specialist exerts high audit effort. In a regulated setting, a stricter audit standard affects fees through its impact on specialization. We provide conditions under which standards that maximize firm value will be more strict and less strict when a regulator recognizes synergies.

中文翻译：

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审计师专业化和信息溢出

我们研究了审计师行业专业化的决定因素、专业化对费用和审计质量的影响，以及监管机构在专业化情况下对审计标准的最优选择。在具有相关公司价值的行业中，专业审计师可以从客户之间的信息溢出中获得协同效应。然而，这些溢出效应只会在工作成本和公司价值的先验精确度较低时才诱导专家减少审计工作。我们对专业化的决定因素进行了实证预测，并表明专业化通过降低预期费用和提高审计报告质量使公司受益，但只有在专家付出高审计努力时才能提高报告对投资者的有用性。在规范的环境中，更严格的审计标准通过其对专业化的影响来影响费用。我们提供条件，当监管机构认可协同效应时，最大化公司价值的标准将变得更加严格和不那么严格。