IMO MORSe Seminar: Amanda Sharkey (University of Chicago)

Institute of Management and Organisation

Date: 27 September 2019 / 15:30 - 17:00

PC04 Blue Building

The Institute of Management and Organization is glad to invite you to the next MORSe seminar given by Amanda Sharkey from University of Chicago on Sept 27 from 15:30 to 17:00 in PC04 in the Blue Building.

She will be presenting a paper titled: Risky Business: Status and Pricing in the Market for Audit Services.


Abstract: A large body of research in sociology and management presumes that lower costs are one of the most significant advantages that high-status firms enjoy. Although prior research provides some support for this argument, the evidence is largely indirect. In order to better understand the relationship between a firm’s status and the price that it is charged for goods and services, we analyze pricing behavior in the $60 billion U.S. market for audit services. Contrary to the predictions of existing theory, we find that audit firms systematically charge their clients more as a function of their status, even after controlling for the complexity and riskiness of the audit. We explore several possible explanations for this surprising finding, focusing on the conjecture that auditors charge high-status firms more in anticipation of the disproportionate attention that such firms tend to garner in cases of misconduct.