TABLE 3.
Industry specialization, audit quality, and audit fees.
| Dependent variable | (1) Restatement |
(2) LAF |
(3) Restatement |
(4) LAF |
| Full sample | Exclude observations audited by non-specialist auditors | |||
| SEASONED | −0.366*** | 0.108*** | −0.794*** | 0.126*** |
| (−3.30) | (9.57) | (−2.77) | (5.81) | |
| UNSEASONED | 0.425** | −0.045** | ||
| (2.02) | (−2.21) | |||
| SIZE | −0.007 | 0.347*** | 0.057 | 0.358*** |
| (−0.18) | (50.18) | (0.69) | (30.31) | |
| LEV | 0.744*** | 0.138*** | 1.262*** | 0.173*** |
| (3.80) | (4.69) | (2.67) | (3.24) | |
| ROA | −2.914*** | −0.325*** | −2.940*** | −0.145 |
| (−6.77) | (−5.44) | (−2.89) | (−1.16) | |
| CFO | −1.584*** | 0.106** | −2.496** | 0.163* |
| (−3.89) | (2.21) | (−2.21) | (1.80) | |
| AGE | 0.026*** | 0.004*** | 0.046*** | 0.004** |
| (2.97) | (3.77) | (2.66) | (2.11) | |
| SOE | −0.138 | −0.060*** | −1.104*** | −0.023 |
| (−1.64) | (−4.28) | (−4.48) | (−0.83) | |
| TENURE | −0.050*** | 0.002 | −0.120*** | 0.010*** |
| (−3.65) | (0.99) | (−2.99) | (2.67) | |
| IBig4 | −0.611*** | 0.777*** | −0.372 | 0.786*** |
| (−2.86) | (20.78) | (−0.31) | (4.71) | |
| Cons | −1.403* | 5.667*** | −2.370 | 5.357*** |
| (−1.74) | (39.92) | (−1.35) | (22.00) | |
| Industry fixed effects | YES | YES | YES | YES |
| Year fixed effects | YES | YES | YES | YES |
| N (firm-years) | 32389 | 32389 | 7479 | 7479 |
| Adj. R2 (pseudo R2) | 0.126 | 0.673 | 0.145 | 0.622 |
Standard errors are robust to heteroscedasticity and clustered at the firm level. T-statistics are in parentheses. ***, **, and * denote significance at the 1, 5, and 10% level, respectively.