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Market Shares and Concentration in the EU Auditing Industry: the Effects of Andersen’s Demise

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  • Apostolos Ballas
  • Irene Fafaliou

Abstract

This paper describes and analyses changes at the concentration level of the audit services markets in 15-EU member-countries. The sample consists of 2,862 clients of auditing firms for the period 1998 to 2004. The findings of the research show that concentration in the aggregate sample increased over time. Concentration in the audit markets of the EU-15 member-countries exhibits substantial variation across countries while average concentration, before and after Arthur Andersen’s dissolution, has increased in 12 and declined in three countries. Results segmented by economic sectors indicate that the concentration increased in all sectors except Energy, which is the sector with the highest concentration. Overall, the empirical results suggest that there are complexities in our understanding of auditing services markets for competition purposes. Copyright International Atlantic Economic Society 2008

Suggested Citation

  • Apostolos Ballas & Irene Fafaliou, 2008. "Market Shares and Concentration in the EU Auditing Industry: the Effects of Andersen’s Demise," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 14(4), pages 485-497, November.
    • Handle: RePEc:kap:iaecre:v:14:y:2008:i:4:p:485-497:10.1007/s11294-008-9167-6
    DOI: 10.1007/s11294-008-9167-6
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    References listed on IDEAS

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    1. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
    2. Joe S. Bain, 1951. "Relation of Profit Rate to Industry Concentration: American Manufacturing, 1936–1940," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 65(3), pages 293-324.
    3. Keith Cowling & Fahmi Mohd Yusof & Guy Vernon, 2000. "Declining Concentration in UK Manufacturing? A problem of measurement," International Review of Applied Economics, Taylor & Francis Journals, vol. 14(1), pages 45-54.
    4. Joseph E. Stiglitz & G. Frank Mathewson (ed.), 1986. "New Developments in the Analysis of Market Structure," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262690934, April.
    5. Danos, P & Eichenseher, Jw, 1982. "Audit Industry Dynamics - Factors Affecting Changes In Client-Industry Market Shares," Journal of Accounting Research, Wiley Blackwell, vol. 20(2), pages 604-616.
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    Cited by:

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    2. Yahn-Shir Chen & Yi-Fang Yang & I-Ching Huang, 2021. "Effects Of Increased Competition On Smallsized Auditors In Taiwan: Fight Or Flight?," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 15(1), pages 1-17.
    3. Charles Piot & Alain Schatt, 2010. "La réglementation de l’audit est-elle dans l’intérêt public:quelques enseignements du modèle français," Working Papers CREGO 1100606, Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations.
    4. Yahn-Shir Chen & Chung-Cheng Yang & Yi-Fang Yang, 2020. "Higher Academic Qualifications, Professional Training and Operating Performance of Audit Firms," Sustainability, MDPI, vol. 12(3), pages 1-16, February.
    5. Svitlana Shulha & Iaroslav Petrakov, 2016. "Non-Linearity Of Audit Prices And Reputation In Developing Countries: Shift To Or From?," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 2(5).
    6. Mantzari, Elisavet & Georgiou, Omiros, 2019. "Ideological hegemony and consent to IFRS: Insights from practitioners in Greece," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 59(C), pages 70-93.

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    More about this item

    Keywords

    Auditing industry; Market shares; Concentration; L10; M00;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

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