Non-Big 4 Local Market Leadership and its Effect on Competition

• 成果类型: Article
• 署名作者: Keune, Marsha B.; Mayhew, Brian W.; Schmidt, Jaime J.
• 署名单位: University System of Ohio; University of Dayton; University of Wisconsin System; University of Wisconsin Madison; University of Texas System; University of Texas Austin
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-51198
• 发表日期: 2016
• 页码: 907-931
• 关键词: industry specialization; audit fees; COSTS; expertise; QUALITY; demand

摘要

This study examines local characteristics associated with non-Big 4 local market leadership and the impact of non-Big 4 local market leadership on competition. We identify non-Big 4 local market leaders by collecting accounting firm rankings from business publications for 46 of the largest metropolitan statistical areas from 2005-2010. These rankings are based on the number of local office employees and provide a more holistic measure of office size than measures based on public company audit fees. We find local supply and demand factors are significantly associated with non-Big 4 local market leadership and that non-Big 4 leadership is associated with lower overall audit fees in the local market. We also find that non-Big 4 leaders earn a fee premium over other non-Big 4 auditors. Our results imply that non-Big 4 leaders increase local market competition.