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Auditor industry specialization has generated significant interest in the academic community. However, a review of prior research suggests a lack of consensus as to how auditor industry specialization should be measured. This paper analyzes data from the 1989–1997 time period and: (1) examines the underlying concepts of specialization that are embodied in the different measurement approaches to industry specialists and the reasons why these measures yield inconsistent results and conclusions, (2) presents a framework to assist researchers in selecting the most appropriate auditor industry specialization metric to apply, and (3) proposes an alternative metric for research designs in particular investigative settings. Our analyses, results, and discussion highlight the differences inherent in industry specialization metrics and offer an interpretation of why such differences exist and provide some guidance for auditor industry metric selection.
Neal et al. (Wed,) studied this question.