Is the audit services market competitive following Arthur Andersens collapse?
Author InfoJane Hamilton Yang Li Donald Stokes Abstract This study investigates whether audit markets remain competitive in the wake of Arthur Andersen’s demise and merger with Ernst & Young to create the Big Four. We conduct the study estimating audit fee models using Australian audit market data from both 2000 and 2003 to determine whether there is any evidence of cartel pricing either before, or subsequent to, the merger. In both years, we find evidence of a Big N price premium when estimating an audit fee model across all clients, and when we estimate the model separately across large and small client market segments. This evidence is consistent with product differentiation by Big N auditors and competitive markets. Copyright (c) 2008 The Authors. Journal compilation (c) 2008 AFAANZ. Download InfoTo download: If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links belo
