Audit Market Concentration Analysis Focusing on Auditors of Public Interest Entities

Michal Šindelář () and Libuše Müllerová
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Michal Šindelář: University of Economics, Prague

Chapter Chapter 41 in New Trends in Finance and Accounting, 2017, pp 443-452 from Springer

Abstract: Abstract The aim of this paper is to analyze the market concentration of audit services in the Czech Republic and compare its results with the international research. The analysis is based on transparency reports, which cover the year 2014. Among other information, auditors are required to present their total remuneration split into remuneration of audit services and remuneration of non-audit services in the transparency report. Globally recognized Herfindahl–Hirschman index is selected as an appropriate analytical tool for measurement of the market concentration. Herfindahl–Hirschman index is complemented by indicator of market share (current ratio). In the year 2014, the Big4 firms occupied 80% of total remuneration and 84% of audit remuneration. The analysis indicates a high level of market concentration of audit services in the Czech Republic, but the international comparison shows slightly lower market concentration in the Czech Republic than in the Germany and in the UK.

Keywords: Audit market concentration; Audit fees; Herfindahl–Hirschman index; Auditor’s independence (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-319-49559-0_41

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DOI: 10.1007/978-3-319-49559-0_41

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