Audit fees of Big 6 and non‐Big 6 accounting firms are examined for 348 publicly listed Hong Kong companies. Using more recent data than prior studies, we find evidence of Big 6 premiums for both general brand name and for industry specialization. In addition, we find that the large local firm Kwan Wong Tan & Fong, which is the market leader in the property sector, has significantly lower fees than both Big 6 and other non‐Big 6 auditors in that industry. Specialization thus leads to different results for Big 6 and non‐Big 6 firms and suggests a market segment not previously identified: non‐Big 6 specialization, which leads to production economies and the capture of market share through lower fees for a clientele seeking low‐priced audits. These results also suggest that prior studies do not recognize sufficiently that Big 6 brand‐name reputation is a necessary foundation on which to achieve higher priced quality‐differentiated audits based on industry specialization.

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