Naslov
Audit market concentration: is it still a concern?

Autori
Sever Mališ, Sanja ; Brozović, Mateja ; Žager, Lajoš

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
Proceedings of FEB Zagreb 11th International Odyssey Conference on Economics and Business / Šimurina, Jurica ; Nančinović Braje, Ivana ; Pavić, Ivana - Zagreb : Ekonomski fakultet Sveučilišta u Zagrebu, 2020, 67-77

Skup
11th FEB Zagreb International Odyssey Conference on Economics and Business

Mjesto i datum
Šibenik, Hrvatska; online, 16.06.2020. - 20.06.2020

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
audit of financial statements ; audit concentration ; audit market ; audit reform ; Big 4 audit firms

Sažetak
Audit market is a specific type of market, where the quality of service provided in most cases in hardly noticeable to audit users, and yet quality audit is a prerequisite for users to have confidence in the auditor's opinion. Such specific and complex characteristics of audit market are one of the reasons why the audit profession is strictly regulated and why regulators are concerned by any market development that may jeopardize audit quality. Recent experiences with corporate scandals have additionally highlighted why constant oversight of the audit profession is essential. One of the issues that is seen as potentially dangerous from the aspect of audit quality is high audit market concentration. In theory, there are both pros and cons when it comes to possible effects of high audit market concentration. One the one hand, audit firms with high market shares are not financially dependent on a single client and are in a better negotiating position when dealing with clients' management. Independent auditors should be better at detecting and restraining any attempts of earnings management. On the other hand, it could be argued that audit firms with higher market shares have no incentives to further increase audit quality, especially since they are aware that large audit clients have limited choice of auditors and that smaller audit firms have high barrier to entry. This paper contributes to the field of audit market concentration by summarizing the results of the previous relevant research in this area. The aim of the paper is to presents and compare the results of the research related to levels, consequences and measures implemented to reduce audit market concentration.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA