Prior literature has conjectured that auditor industry specialization is an
important dimension of audit quality. This book addresses the economic
benefits that companies may achieve by employing auditors with industry
expertise. It examines the link between the employment of industry specialist
auditors, and the degree of information asymmetry and the cost of debt of a
client company. More specifically, the analysis should answer the following
questions: Is there a relation between the employment of an industry
specialist auditor and the level of information asymmetry of client
companies? Is there a relation between the employment of an industry
specialist auditor and the cost of debt of client companies? Is the economic
impact of the employment of an industry specialist auditor on the cost of
debt larger for financially troubled client companies? The book is directed
towards researchers in business, regulators, auditors, credit agencies, and
investors.