Audit Market Regulation and Supplier Concentration around the World : Empirical Evidence

摘要: In the ongoing discussions on audit regulation, key issues of auditor independence and a high level market concentration have become apparent. However, there is concern that regulations intended to improve (i.e., restrictions regarding joint supply non-audit services, firm rotation, audits, etc.) might further increase concentration. We address this issue with an empirical analysis. Based cross-country study for years 2001–2010, we investigate whether country's regulation connected combined share four largest firms (Concentration Ratio, CR 4 ), inequality in distribution (Hirschmann-Herfindahl-Index, HHI), number per client active (Auditor Client Ratio). Our final sample consists 141,190 firm-year observations listed companies total 2,439 firms, taken from 29 countries. The results our country-fixed-effects models indicate regulators should take connections between potentially conflicting goals into account: Whereas existence proportionate liability system prohibition services significantly decrease supplier concentration, audits mandatory rotation Thus, points need account clients' firms' adaptive strategies new regulations.