IDEAS home Printed from https://ideas.repec.org/a/bla/acctfi/v55y2015i3p749-781.html
   My bibliography  Save this article

An examination of the relation between market structure and the profitability of audit engagements

Author

Listed:
  • Will Ciconte
  • Walter Robert Knechel
  • Caren Schelleman
  • Gary Monroe

Abstract

type="main" xml:id="acfi12078-abs-0001"> Due to increasing supplier concentration, there is growing concern regarding the lack of competition in the audit market. Theory based on Cournot oligopoly predicts that increasing concentration will facilitate monopolistic behaviour. Conversely, if the market for audit services has more in common with a Bertrand oligopoly, concentration may not lead to higher fees. We evaluate whether increased audit supplier concentration leads to economic rents by investigating audit profitability. Using proprietary data from a (then) Big 6 audit firm, we find that local market structure has a significant and positive association with audit profitability, but not auditor effort for large clients.

Suggested Citation

  • Will Ciconte & Walter Robert Knechel & Caren Schelleman & Gary Monroe, 2015. "An examination of the relation between market structure and the profitability of audit engagements," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 55(3), pages 749-781, September.
    • Handle: RePEc:bla:acctfi:v:55:y:2015:i:3:p:749-781
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/acfi.2015.55.issue-3
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Martina K. Linnenluecke & Jacqueline Birt & Xiaoyan Chen & Xin Ling & Tom Smith, 2017. "Accounting Research in Abacus, A&F, AAR, and AJM from 2008–2015: A Review and Research Agenda," Abacus, Accounting Foundation, University of Sydney, vol. 53(2), pages 159-179, June.
    2. Michal Šindelář & Libuše Müllerová, 2021. "Audit quality in the Czech Republic with a focus on auditors of public interest entities [Kvalita auditu v České republice se zaměřením na auditory subjektů veřejného zájmu]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2021(4), pages 5-17.
    3. repec:prg:jnlcfu:v:2021:y:2021:i:4:id:565 is not listed on IDEAS
    4. Simon Dekeyser & Ann Gaeremynck & W. Robert Knechel & Marleen Willekens, 2021. "Multimarket Contact and Mutual Forbearance in Audit Markets," Journal of Accounting Research, Wiley Blackwell, vol. 59(5), pages 1651-1688, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:acctfi:v:55:y:2015:i:3:p:749-781. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/aaanzea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.