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The Relationship Between Audit Quality And Competition At The Intersection Of The Large And Small Audit Firm Markets, Jeanne-Claire Alyse White
The Relationship Between Audit Quality And Competition At The Intersection Of The Large And Small Audit Firm Markets, Jeanne-Claire Alyse White
LSU Doctoral Dissertations
This paper examines the relationship between audit quality and several measures of spatial competition. Spatial competition is measured as the smallest absolute difference in audit fee market shares from an audit firm and its closest competitor. In this paper, spatial competition measures are referred to as competitive distances, and they are calculated within the large audit market (Big 4 only), within the small audit market (non-Big 4 only), and between the large and small audit markets. Audit market competition and its effect on audit quality has been an ongoing debate. On one side of the argument, competition may negatively impact …
The Effect Of Audit Market Concentration On Audit Pricing And Audit Quality : The Role Of The Size Of The Audit Market, John Daniel Eshleman
The Effect Of Audit Market Concentration On Audit Pricing And Audit Quality : The Role Of The Size Of The Audit Market, John Daniel Eshleman
LSU Doctoral Dissertations
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 …
Auditor Tenure And Audit Quality, Li Zheng Brooks
Auditor Tenure And Audit Quality, Li Zheng Brooks
LSU Doctoral Dissertations
I propose that audit quality is likely to increase with audit firm tenure due to a Learning Effect and decrease with audit firm tenure due to a Bonding Effect. The net impact of these two countervailing forces over audit firm tenure dictates whether the relationship between audit firm tenure and audit quality is a concave, convex, or linear function of audit firm tenure. When the Bonding Effect dominates the Learning Effect in the later (earlier) years of tenure, then audit quality is a concave (convex) function of audit firm tenure. Adopting the quadratic model to empirically estimate the audit firm …