Competition Effects on Audit Quality and Pricing in a Non-Big 4 Market

IF 2 Q2 BUSINESS, FINANCE
Masoud Azizkhani, Heibatollah Sami, K. Amirkhani, G. Monroe
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引用次数: 3

Abstract

Synopsis The research problem Adding to the literature on audit market competition, this study examined how increasing competition affects audit pricing and audit quality in an emerging market where regulatory policies have resulted in increased competition (less market concentration) in the audit market, and Big 4 auditors are banned. The test hypotheses H[Formula: see text]: Audit market concentration (competition) is positively (negatively) associated with audit fees. H[Formula: see text]: Audit market competition is associated with audit quality. Target population Various stakeholders including regulators, auditors, firm managers, and users of financial reports. Adopted methodology Multivariate analysis using ordinary least squares and logit regressions. Analyses Using the Herfindahl index to measure competition in the audit market at the national level, we used a sample of listed firms from the emerging Iranian audit market, which is characterized by increase in audit market competition as a result of a regulatory change and a lack of market concentration because the audit market does not include Big 4 audit firms or any dominant local audit firms to examine the impact of competition on audit pricing and audit quality. Findings We found that higher (lower) levels of audit market competition measured using the Herfindahl index are associated with lower (higher) audit fees and higher (lower) levels of abnormal accruals. These results suggest that increased competition in audit markets in developing economies generates audit fee pressure, which negatively affects audit quality.
非四大审计市场竞争对审计质量和审计定价的影响
除了有关审计市场竞争的文献外,本研究还考察了在监管政策导致审计市场竞争加剧(市场集中度降低)、四大审计机构被禁止的新兴市场中,竞争加剧如何影响审计定价和审计质量。检验假设H[公式:见文]:审计市场集中度(竞争)与审计费用呈正(负)相关。H[公式:见正文]:审计市场竞争与审计质量相关。目标人群不同的利益相关者,包括监管者、审计师、公司经理和财务报告的使用者。采用多变量分析方法,采用普通最小二乘法和logit回归。利用赫芬达尔指数来衡量国家层面审计市场的竞争,我们使用了来自新兴伊朗审计市场的上市公司样本,该市场的特点是由于监管变化导致审计市场竞争加剧,并且由于审计市场不包括四大审计公司或任何占主导地位的当地审计公司,因此缺乏市场集中度,以检查竞争对审计定价和审计质量的影响。我们发现,使用赫芬达尔指数衡量的审计市场竞争水平越高(越低),审计费用越低(越高),异常应计费用越高(越低)。这些结果表明,发展中经济体审计市场竞争加剧产生了审计费用压力,这对审计质量产生了负面影响。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
1.20
自引率
0.00%
发文量
19
期刊介绍: The aim of The International Journal of Accounting is to advance the academic and professional understanding of accounting theory, policies and practice from the international perspective and viewpoint. The Journal editorial recognizes that international accounting is influenced by a variety of forces, e.g., governmental, political and economic. Thus, the primary criterion for manuscript evaluation is the incremental contribution to international accounting literature and the forces that impact the field. The Journal aims at understanding the present and potential ability of accounting to aid in analyzing and interpreting international economic transactions and the economic consequences of such reporting. These transactions may be within a profit or non-profit environment. The Journal encourages a broad view of the origins and development of accounting with an emphasis on its functions in an increasingly interdependent global economy. The Journal also welcomes manuscripts that help explain current international accounting practices, with related theoretical justifications, and identify criticisms of current policies and practice. Other than occasional commissioned papers or special issues, all the manuscripts published in the Journal are selected by the editors after the normal double-blind refereeing process.
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