Auditing, as a monitoring device, is important in reducing the agency costs associated with the information asymmetry between the corporate insiders and the investing public, and hence facilitates efficient allocation of resources. In order to reduce audit quality evaluation costs, auditor size has been used as a surrogate for audit quality (DeAngelo, 198 1 b), and prior literature generally views international Big Five auditors (B5 hereafter) as a single group of higher quality auditors. This study, based on the quasi-rents theory developed in DeAngelo (1981b), documents and explains differences in audit quality among B5 auditors. PWC and EY are found to have significantly larger number of clients than other B5 auditors, which suggests that they have more to lose in the event of publicised audit failures. As a result, this study argues that PWC and EY have relatively greater incentive to provide higher quality audits during the study period. Using US data for the years 2001 and 2002, this study finds that PWC and EY (both individually and jointly) are associated with higher audit fees when compared to other B5 auditors, after controlling for other factors as well as potential endogeneity and self-selection bias. Moreover, it is shown that they are positively related to measures that indicate higher levels of actual audit quality than other B5 auditors, including (1) higher likelihood of issuing going-concern opinions to their financially distressed clients; (2) higher predictive ability of their clients' reported accounting earnings and accruals on future period cash flows; and (3) lower levels of opportunistic earnings management for their client firms. In addition, PWC and EY are also found to be associated with higher perceived audit quality and information credibility than other B5 auditors, as measured by the stronger association between earnings and returns for their client firms. The results are robust to different settings and specifications.