Will mandatory audit firm rotation reduce audit market concentration in South Africa?

IF 0.9 4区管理学 Q4 BUSINESS

South African Journal of Business Management Pub Date : 2021-07-23 DOI:10.4102/SAJBM.V52I1.2426

N. Wesson

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引用次数: 1

Abstract

Purpose: Deconcentrating the audit market was one of the stated objectives of the proposed mandatory audit firm rotation (MAFR) ruling in South Africa. With MAFR being a contentious topic, this study aimed to explore the possible effect of MAFR on audit market concentration in South Africa in anticipation of the implementation thereof in 2023. Design/methodology/approach: A sample of 415 South African listed companies was studied for the period 2010–2018. Data were mainly captured from annual reports. Descriptive statistics and significance testing were performed on calculated concentration ratios and identified audit firm rotations. Findings/results: South African audit market concentration mirrored empirical evidence from most developed countries – with Big 4 audit firms dominating the audit market, whilst a monopoly within the Big 4 audit firm grouping was also evident. Based on observed audit firm concentration and audit firm rotation behaviour, it was anticipated that MAFR might further increase audit market concentration. A concerning result was the sheer scale of audit firm rotations to be carried out in anticipation of MAFR in 2023. Practical implications: This study identified the impairment of audit quality and increased costs as possible unintended consequences of MAFR in South Africa. Originality/value: This study contributed to the limited body of knowledge on the possible effect of MAFR in South Africa. This study proposed alternatives to MAFR and recommended areas for future research to support evidence-based decisions on remedies to address audit quality and audit market concentration in South Africa.

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强制审计公司轮换会降低南非审计市场的集中度吗？

目的：分散审计市场是南非拟议的强制性审计公司轮换裁决的既定目标之一。由于MAFR是一个有争议的话题，本研究旨在探讨MAFR对南非审计市场集中度的可能影响，预计将于2023年实施。设计/方法/方法：对2010-2018年期间415家南非上市公司的样本进行了研究。数据主要来自年度报告。对计算出的集中率和确定的审计公司轮换进行了描述性统计和显著性检验。调查结果/结果：南非审计市场集中反映了大多数发达国家的经验证据——四大审计公司主导了审计市场，而四大审计事务所集团内部的垄断也很明显。根据观察到的审计公司集中度和审计公司轮换行为，预计MAFR可能会进一步提高审计市场集中度。一个令人担忧的结果是，预计2023年将进行大规模的审计公司轮换。实际影响：这项研究确定，南非MAFR可能会带来审计质量下降和成本增加的意外后果。独创性/价值：这项研究有助于了解南非MAFR可能产生的影响。这项研究提出了MAFR的替代方案，并建议了未来研究的领域，以支持关于解决南非审计质量和审计市场集中问题的补救措施的循证决策。

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

South African Journal of Business Management Multiple-

CiteScore

2.00

自引率

7.70%

发文量

审稿时长

25 weeks

期刊介绍： The South African Journal of Business Management publishes articles that have real significance for management theory and practice. The content of the journal falls into two categories: managerial theory and management practice: -Management theory is devoted to reporting new methodological developments, whether analytical or philosophical. In general, papers should, in addition to developing a new theory, include some discussion of applications, either historical or potential. Both state-of-the-art surveys and papers discussing new developments are appropriate for this category. -Management practice concerns the methodology involved in applying scientific knowledge. It focusses on the problems of developing and converting management theory to practice while considering behavioural and economic realities. Papers should reflect the mutual interest of managers and management scientists in the exercise of the management function. Appropriate papers may include examples of implementations that generalise experience rather than specific incidents and facts, and principles of model development and adaptation that underline successful application of particular aspects of management theory. The relevance of the paper to the professional manager should be highlighted as far as possible.