The audit market for listed Australian companies from 2012 to 2018: A state of play

Elizabeth Carson, Yi (Dale) Fu, Ulrike Thürheimer and Yang Xu
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Elizabeth Carson: School of Accounting, Auditing and Taxation, UNSW Sydney, Sydney, NSW, Australia
Yi (Dale) Fu: Department of Accounting, Deakin University, Burwood, VIC, Australia
Ulrike Thürheimer: Accounting Section, University of Amsterdam, Amsterdam, The Netherlands
Yang Xu: UQ Business School, The University of Queensland, Brisbane, QLD, Australia

Australian Journal of Management, 2023, vol. 48, issue 3, 524-549

Abstract: Motivated by recent regulatory scrutiny of auditing in Australia, we provide an overview of the audit market for Australian listed companies from 2012 to 2018. Using descriptive analyses, we explore audit market competition, the provision of non-audit services (NAS), and audit firm tenure. We find that the Australian audit market is highly segmented. Big 4 firms increasingly dominate the larger client segment, while Non-Big 4 firms focus on medium and smaller clients. Auditor-provided NAS fees represent a relatively small fraction of audit fees for smaller clients, but a relatively high fraction for larger clients. We further observe that the share of total revenue from NAS of Big 4 firms increases over time. Finally, a relatively small percentage of clients has long audit firm tenure, and that long tenure is more common in the larger client segments. We discuss the implications of these findings and research opportunities that emerge. JEL Classification: D40, L11, M42, L84

Keywords: Audit firm tenure; audit market competition; audit market concentration; non-audit services (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:48:y:2023:i:3:p:524-549

DOI: 10.1177/03128962221124642

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