隨著企業多角化的普遍，公司可能擁有多個分部門(segment)，該些分部門也會因水平多角化策略而分屬於不同的產業類別。然而，過去研究在衡量審計人員之產業專精時，僅侷限於審計人員對公司主要產業之專業知識，而忽略了審計人員對公司其他次要產業之專業知識，造成衡量方式無法充分展現審計人員對受查公司之整體專業知識，故而，本研究修正傳統衡量方式的不足之處，考量了審計人員對公司所有分部門之產業知識以及各分部門之相對重要性，藉此發展四個新的衡量指標，並命名為審計人員之分部門專業知識(auditor segment-based expertise)。本研究除證實審計人員之分部門專業知識對審計品質和審計訂價之影響外，亦根據各分部門之所屬產業區分為主要和次要分部門，用以檢查審計人員對公司主要和次要分部門之專業知識，是否均有助於提升審計品質和公費溢酬，本研究將於二篇文章中分述之。更重要的是，由於本研究發展之審計人員之分部門專業知識涵括審計人員對受查公司所有分部門之專業知識，因此本研究預期此新衡量指標對於多角化程度較高的公司，應較傳統衡量方式更能捕捉其審計人員之整體專業知識，而本研究結果亦支持此推論，我發現相較於僅有單一部門之公司，本研究所建構之審計人員之分部門專業知識對於擁有多個分部門的公司尤為適用，但若以傳統衡量方式估計則無顯著差異。

With the prevalence of diversification, a company likely has numerous segments assigned to different industry classifications. However, extant studies on auditor industry expertise have focused on auditor expertise in the client’s primary industry segment, while omitting the potentially crucial expertise in a client’s other minor segments. Drawing on the relation between auditor expertise in a client’s minor segments and the audit quality and pricing documented in this study, I infer that the typical measures of auditor industry expertise are insufficient to represent an auditor’s overall knowledge of a company, especially when companies have multiple segments. Therefore, this dissertation attempts to develop new indicators of auditor expertise, taking auditor industry expertise in all a client’s segments and the relative importance of those segments into consideration, and identifies them as auditor segment-based expertise. Empirical results show that not only auditor expertise in a client’s primary industry but also that in the other minor industries are significantly associated with lower discretionary accruals and higher fee premiums, implying the deficiency of typical measures due to the focus on auditor’s expertise in client’s primary industry. More importantly, together with the statistically insignificant difference between diversified and focused companies estimated by the typical measures, this study provides evidence which demonstrates that auditor segment-based expertise is more adequate for diversified companies to represent an auditor’s comprehensive knowledge of a company and captures the extent of earnings management better than the typical measures. These findings remind researchers of the potential measurement errors derived from the typical measures for estimating auditor industry expertise for diversified companies. The auditor segment-based expertise indicators proposed in this study provide more accuracy and completeness of an auditor’s expertise, in particular, for diversified companies.

Essay Ⅰ:
Abdolmohammadi, M., and A. Wright. 1987. An examination of the effects of experience and task complexity on audit judgments. The Accounting Review 62 (1): 1–13.
Altman, E. I. 1968. Financial ratios, discriminant analysis and the prediction of corporate bankruptcy. The Journal of Finance 23 (4): 589–609.
Ashbaugh, H., R. LaFond, and B. W. Mayhew. 2003. Do nonaudit services compromise auditor independence? Further evidence. The Accounting Review 78 (3): 611–639.
Balsam, S., J. Krishnan, and J. S. Yang. 2003. Auditor industry specialization and earnings quality. Auditing: A Journal of Practice & Theory 22 (September): 71–97.
Basu, N. 2010. Trends in corporate diversification. Financial Markets and Portfolio Management 24: 87–102.
Becker, C. L., M. L. DeFond, J. Jiambalvo, and K. R. Subramanyam. 1998. The effect of audit quality on earnings management. Contemporary Accounting Research 15 (Spring): 4–24.
Berger, P. G., and E. Ofek. 1995. Diversification’s effect on firm value. Journal of Financial Economics 37: 39–65.
Berger, P. G., and R. Hann. 2003. The impact of SFAS No. 131 on information and monitoring. Journal of Accounting Research 41 (2): 163–223.
Bonner, S. E., and B. L. Lewis. 1990. Determinants of auditor expertise. Journal of Accounting Research 28: 1–20.
Bonner, S. E., and N. Pennington. 1991. Cognitive processes and knowledge as determinants of auditor expertise. Journal of Accounting Literature 10: 1–50.
Bonner, S. E., and P. L. Walker. 1994. The effects of instruction and experience on the acquisition of auditing knowledge. The Accounting Review 69 (1): 157–178.
Cahan, S. F., D. C. Jeter, and V. Nailer. 2011. Are all industry specialist auditors the same? Auditing: A Journal of Practice & Theory 30 (4): 191–222.
Carcelo, J. V., and A. L. Nagy. 2004. Client size, auditor specialization and fraudulent financial reporting. Managerial Auditing Journal 19 (5): 651–668.
Cenker, W., and A. Nagy. 2008. Auditor resignations and auditor industry specialization. Accounting Horizons 22 (September): 279–295.
Chi, H.-Y., and C.-L. Chin. 2011. Firm versus partner measures of auditor industry expertise and effects on auditor quality. Auditing: A Journal of Practice & Theory 30 (2): 201–229.
Chin, C.-L., and H.-Y. Chi. 2009. Reducing restatements with increased industry expertise. Contemporary Accounting Research 26 (3): 729–765.
Choi, J.-H., J.-B. Kim, A. A. Qiu, and Y. Zang. 2012. Geographic proximity between auditor and client: How does it impact audit quality? Auditing: A Journal of Practice & Theory 31 (2): 43–72.
Craswell, A., J. Francis, and S. Taylor. 1995. Auditor brand name reputation and industry specialization. Journal of Accounting and Economics 20 (December): 297–322.
DeFond, M. L., and K. R. Subramanyam. 1998. Auditor changes and discretionary accruals. Journal of Accounting and Economics 25 (1): 35–67.
DeFond, M. L., and J. R. Francis. 2005. Auditor research after Sarbanes-Oxley. Auditing: A Journal of Practice & Theory 24 (supplement): 5–30.
Denis, D. J., D. K. Dennis., and K. Yost. 2002. Global diversification, industrial diversification, and firm value. The Journal of Finance 57 (5): 1951–1979.
Dunn, K. A., and B. W. Mayhew. 2004. Audit firm industry specialization and client disclosure quality. Review of Accounting Studies 9 (March): 35–58.
Ferguson, A., J. R. Francis, and D. Stokes. 2003. The effect of firm-wide and office-level industry expertise on audit pricing. The Accounting Review 78 (April): 428–448.
Francis, J. R., K. Reichelt, and D. Wang. 2005. The pricing of national and city-specific reputations for industry expertise in the U.S. audit market. The Accounting Review (January) 113–136.
General Accounting Office (GAO). 2003. Public Accounting Firms: Mandated Study on Consolidation and Competition. GAO Report 03-864. Washington, D.C.: Government Printing Office.
General Accounting Office (GAO). 2008. Audits of Public Companies: Continued Concentration in Audit Market for Large Public Companies Does Not Call for Immediate Action. GAO Report 08-163. Washington, D.C.: Government Printing Office.
Gul, F. A., S. Y. K. Fung, and B. Jaggi. 2009. Earnings quality: Some evidence on the role of auditor tenure and auditors’ industry expertise. Journal of Accounting and Economics 47 (3): 265–287.
Hay, D. C., W. R. Knechel, and N. Wong. 2006. Audit fees: A meta-analysis of the effect of supply and demand attributes. Contemporary Accounting Research 23: 141–191.
Hope, O.-K., T. Kang, W. B. Thomas, and F. Vasvari. 2009. The effects of SFAS 131 geographic segment disclosures by US multinational companies on the valuation of foreign earnings. Journal of International Business Studies 40: 421-443.
Huang, H.-W., L.-L. Liu, K. Raghunandan, and D. V. Rama. 2007. Auditor industry specialization, client bargaining power, and audit fees: Further evidence. Auditing: A Journal of Practice & Theory 26 (1): 147–158.
Lim, C. Y., and H.-T. Tan. 2008. Non-audit service fees and audit quality: The impact of auditor specialization. Journal of Accounting Research 46 (March): 199–246.
Lim, C. Y., T. Y. Thong, and D. K. Ding. 2008. Firm diversification and earnings management: evidence from seasoned equity offerings. Review of Quantitative Finance and Accounting 30 (1): 69–92.
Jacquemin, A. P., and C. H. Berry. 1979. Entropy measure of diversification and corporate growth. The Journal of Industrial Economics 27 (4): 359–369.
Jiraporn, P., Y. S. Kim, and I. Mathur. 2008. Does corporate diversification exacerbate or mitigate earnings management?: An empirical analysis. International Review of Financial Analysis 17 (5): 1087–1109.
Kothari, S., A. Leone, and C. Wasley. 2005. Performance matched abnormal accrual measures. Journal of Accounting and Economics 39 (February): 163–197.
Krishnan, G. 2003. Does Big 6 auditor industry expertise constrain earnings management? Accounting Horizons (supplement): 1–16.
Kwon, S. Y., C. Y. Lim, and P. M.-S. Tan. 2007. Legal systems and earnings quality: The role of auditor industry specialization. Auditing: A Journal of Practice & Theory 26 (2): 25–56.
McDougal, K. 2011. International diversification and earnings quality: The impact of audit quality. Unpublished doctor’s dissertation. Temple University, Philadelphia, PA (2011).
McGuire, S. T., T. C. Omer, and D. Wang. 2012. Tax avoidance: Does tax-specific industry expertise make a difference? The Accounting Review 87 (3): 975–1003.
Minutti-Meza, M. 2013. Does auditor industry specialization improve audit quality? Journal of Accounting Research (forcoming).
Montgomery, C. A. 1994. Corporate diversification. Journal of Economic Perspectives 8 (3): 163–178.
Neal, T. L., and R. R. Riley. 2004. Auditor industry specialist research design. Auditing: A Journal of Practice & Theory 23: 169–177.
Owhoso, V. E., W. F. Messier, Jr., and J. G. Lynch, Jr. 2002. Error detection by industry‐specialized teams during sequential audit review. Journal of Accounting Research 40 (3): 883–900.
Palepu, K. 1985. Diversification strategy, profit performance and the entropy measure. Strategic Management Journal 6: 239–255.
Palmrose, Z.-V. 1986. The effect of nonaudit services on the pricing of audit services: Further evidence. Journal of Accounting Research 24 (2): 405–411.
Reeb, D. M., C. C. Y. Kwok, and H.Y. Baek. 1998. Systematic risk of the multinational corporation. Journal of International Business Studies 29 (2): 263–279.
Reichelt, K. J., and D. Wang. 2010. National and office-specific measures of auditor industry expertise and effects on audit quality. Journal of Accounting Research 48 (3): 647–686.
Richardson, V. J. 2000. Information asymmetry and earnings management: Some evidence. Review of Quantitative Finance and Accounting 15: 325–347.
Rodriguez-Perez, G., and S. Hemmen. 2010. Debt, diversification and earnings management. Journal of Accounting and Public and Policy 29 (2): 138–159.
Solomon, I., M. D. Shields, and O. R. Whittington. 1999. What Do Industry-Specialist Auditors Know? Journal of Accounting Research 37 (1): 191–208.
Stanley, J. D., and F. T. DeZoort. 2007. Audit firm tenure and financial restatements: An analysis of industry specialization and fee effects. Journal of Accounting and Public Policy 26 (2): 131–159.
Stein, J. 1997. Internal capital markets and the competition for corporate resources. Journal of Finance 52:111–133.
Thomas, W. B. 2002. Firm diversification and asymmetric information: evidence from analysts’ forecasts and earnings announcements. Journal of Financial Economics 64 (3): 373–396.
ESSAY Ⅱ:
Ashbaugh, H., R. LaFond, and B. W. Mayhew. 2003. Do nonaudit services compromise auditor independence? Further evidence. The Accounting Review 78 (3): 611–639.
Carcello, J. R., R. Hermanson, and N. McGrath. 1992. Audit quality attributes: The perceptions of audit partners, preparers, and financial statement users. Auditing: A Journal of Practice & Theory 11: 1–15.
Carson, E. 2009. Industry specialization by global audit firm networks. The Accounting Review 84 (2): 355–382.
Carson, E., and N. Fargher. 2007. Note on audit fee premiums to client size and industry specialization. Accounting and Finance 47: 423–446.
Casterella, J. R., J. R. Francis, B. L. Lewis, and P. L. Walker. 2004. Auditor industry specialization, client bargaining power, and audit pricing. Auditing: A Journal of Practice & Theory 23 (1): 123–140.
Chan, P., M. Ezzamel, and D. Gwilliam. 1993. Determinants of audit fees for quoted UK companies. Journal of Business Finance & Accounting 20 (6): 765–786.
Craswell, A., J. R. Francis, and S. Taylor. 1995. Auditor brand name reputation and industry specialization. Journal of Accounting and Economics 20 (December): 297–322.
DeFond, M. L., J. R. Francis, and T. J. Wong. 2000. Auditor industry specialization and market segmentation: Evidence from Hong Kong. Auditing: A Journal of Practice & Theory 19 (1): 49–66.
Ettredge, M., and R. Greenberg, 1990. Determinants of fee cutting on initial audit engagements. Journal of Accounting Research 28 (1): 198–210.
Ferguson, A., J. R. Francis, and D. Stokes. 2003. The effect of firm-wide and office-level industry expertise on audit pricing. The Accounting Review 78 (April): 428–448.
Ferguson, A., J. R. Francis, and D. Stokes. 2007. What matters in audit pricing: industry specialization or overall market leadership. Accounting and Finance 46: 97–106.
Ferguson, A., and D. Stokes. 2002. Brand name audit pricing, industry specialization, and leadership premiums post-Big 8 and Big 6 mergers. Contemporary Accounting Research 19 (1): 77–110.
Francis, J. R., K. Reichelt, and D. Wang. 2005. The pricing of national and city-specific reputations for industry expertise in the U.S. audit market. The Accounting Review (January) 113–136.
Fung, S. Y. K., F. A. Gul, and J. Krishnan. 2012. City-level auditor industry specialization, economies of scale, and audit pricing. The Accounting Review 87 (4): 1281–1307.
Huang, H.-W., L.-L. Liu, K. Raghunandan, and D. V. Rama. 2007. Auditor industry specialization, client bargaining power, and audit fees: Further evidence. Auditing: A Journal of Practice & Theory 26 (1): 147–158.
Jacquemin, A. P., and C. H. Berry. 1979. Entropy measure of diversification and corporate growth. The Journal of Industrial Economics 27 (4): 359–369.
Mayhew, B. W., and M. S. Wilkins. 2003. Audit firm industry specialization as a differentiation strategy: Evidence from fees charged to firms going public. Auditing: A Journal of Practice & Theory 22 (2): 33–52.
Palmrose, Z.-V. 1986. The effect of nonaudit services on the pricing of audit services: Further evidence. Journal of Accounting Research 24 (2): 405–411.
Pearson, T., and G. Trompeter. 1994. Competition in the market for audit services: The effect of supplier concentration on audit fees. Contemporary Accounting Research 11 (1): 115–135.
Porter, M. 1985. Competitive Advantage: Creating and sustaining superior performance. New York, NY: The Free Press.
Reynolds, J. K., and J. R. Francis. 2000. Does size matter? The influence of large clients on office-level auditor reporting decisions, Journal of Accounting and Economics 30 (3): 375–400.
Simunic, D. A. 1980. The pricing of audit services: Theory and evidence. Journal of Accounting Research 18 (1): 161–190.
Stanley, J. D., and F. T. DeZoort. 2007. Audit firm tenure and financial restatements: An analysis of industry specialization and fee effects. Journal of Accounting and Public Policy 26 (2): 131–159.