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The effect of the PricewaterhouseCoopers merger on auditor concentration in Australia: A note

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  • Sumithira Thavapalan
  • Robyn Moroney
  • Roger Simnett

Abstract

Concerns have been raised about the impact of the PricewaterhouseCoopers (PwC) merger on the structure of and competition in the audit and assurance services market in Australia. The market share of publicly listed companies for audit firms for each industry category pre– and post–merger is examined in this paper to ascertain levels of auditor concentration. Using the approach outlined by the Australian Competition and Consumer Commission a decrease in the level of competition is identified. However, when using another generally accepted concentration measure, the Herfindahl Index, the merger is found to not necessarily decrease competition. In fact, for a number of industry sectors a more equitable spread of clients between the main audit firms was achieved.

Suggested Citation

  • Sumithira Thavapalan & Robyn Moroney & Roger Simnett, 2002. "The effect of the PricewaterhouseCoopers merger on auditor concentration in Australia: A note," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 42(2), pages 153-167, June.
    • Handle: RePEc:bla:acctfi:v:42:y:2002:i:2:p:153-167
    DOI: 10.1111/1467-629X.00014
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    Cited by:

    1. Abidin, Shamharir & Beattie, Vivien & Goodacre, Alan, 2010. "Audit market structure, fees and choice in a period of structural change: Evidence from the UK – 1998–2003," The British Accounting Review, Elsevier, vol. 42(3), pages 187-206.
    2. Simon Segal & James Guthrie & Johannes Dumay, 2021. "Stakeholder and merger and acquisition research: a structured literature review," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 2935-2964, June.
    3. Michael Firth & Thomas Lau, 2004. "Audit pricing following mergers of accounting practices: evidence from Hong Kong," Accounting and Business Research, Taylor & Francis Journals, vol. 34(3), pages 201-213.
    4. Charles Piot, 2008. "Concentration et compétitivité du marché de l'audit en France:une étude longitudinale 1997-2003," Revue Finance Contrôle Stratégie, revues.org, vol. 11(4), pages 31-63, December.
    5. Bum†Jin Park, 2017. "Auditors’ Economic Incentives and the Sensitivity of Managerial Pay to Accounting Performance," Australian Accounting Review, CPA Australia, vol. 27(4), pages 382-399, December.
    6. Juan A. Toscano M. & Maria A. Garcia-Benau, 2014. "Structure and Nature of Competition in the Market for Financial Audit Services in Mexico," Journal of Business Administration Research, Journal of Business Administration Research, Sciedu Press, vol. 3(2), pages 1-10, October.
    7. Chia-Chi Lee, 2010. "Audit market structure and related changes in Taiwan: the effects of CPA qualification changes and mergers," Quality & Quantity: International Journal of Methodology, Springer, vol. 44(4), pages 691-712, June.
    8. de Fuentes, Cristina & García Benau, María Antonia & Pucheta Martínez, María Consuelo & Ruiz Barbadillo, Emiliano, 2015. "El éxito de los procesos de fusión en el mercado de auditoría: el caso de PriceWaterhouseCoopers," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 18(1), pages 55-67.
    9. Charles Piot, 2007. "Concentration Et Compétitivité Du Marché De L'Audit En France : Une Étude Longitudinale 1997-2003," Post-Print halshs-00534787, HAL.

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