The GAO has recently expressed concern that audit market concentration (i.e., not client concentration) could result in greater audit fees and lower audit quality. However, the extant literature finds that local audit markets with higher concentration have lower audit fees (Numan and Willekens 2012) and fewer accounting restatements (Newton et al. 2013). In this study, I show that the effect of audit market concentration on the level of audit fees depends on the size of the audit market (i.e., the size and/or number of clients in the local geographic area). When the audit market contains fewer clients and/or those clients are small in size, audit fees are increasing in audit market concentration. Conversely, in markets where there are a large number of clients and/or the clients are large in size, audit market concentration leads to lower audit fees. In additional tests, I examine whether the relationship between audit market concentration and audit quality also depends on the size of the audit market. The evidence suggests that audit quality is higher in markets where both audit market concentration and audit market size are high.
| Identifer | oai:union.ndltd.org:LSU/oai:etd.lsu.edu:etd-11082013-133239 |
| Date | 14 November 2013 |
| Creators | Eshleman, John Daniel |
| Contributors | Cheng, Agnes, Reichelt, Kenneth, Legoria, Joseph, Soileau, Jared |
| Publisher | LSU |
| Source Sets | Louisiana State University |
| Language | English |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lsu.edu/docs/available/etd-11082013-133239/ |
| Rights | unrestricted, I hereby certify that, if appropriate, I have obtained and attached herein a written permission statement from the owner(s) of each third party copyrighted matter to be included in my thesis, dissertation, or project report, allowing distribution as specified below. I certify that the version I submitted is the same as that approved by my advisory committee. I hereby grant to LSU or its agents the non-exclusive license to archive and make accessible, under the conditions specified below and in appropriate University policies, my thesis, dissertation, or project report in whole or in part in all forms of media, now or hereafter known. I retain all other ownership rights to the copyright of the thesis, dissertation or project report. I also retain the right to use in future works (such as articles or books) all or part of this thesis, dissertation, or project report. |
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