Does regional audit market competition influence audit pricing? Evidence based on the spatial distribution of the audit market

Yiling Zhang and Lang Wei

Finance Research Letters, 2023, vol. 58, issue PC

Abstract: This study examines the impacts of audit market competition on audit fees. We show that more audit firms and offices located near listed companies lead to lower audit fees. The negative relationship is 1) stronger when companies and auditors are located in the same city and there are few other auditors accessible and 2) weaker when the incumbent auditor is surveyed by the CICPA for low-price competition. The negative effect of the number of audit firms and offices in a company's vicinity on audit fees is mainly due to the increase in the number of local audit firm offices.

Keywords: Regional audit market competition; The number of audit firms and offices; Audit fees; Spatial distribution (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pc:s154461232300911x

DOI: 10.1016/j.frl.2023.104539

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