Competition and Sustainability: Evidence from Professional Service Organization

Yahn-Shir Chen, Enny Susilowati Mardjono and Yi-Fang Yang
Additional contact information
Yahn-Shir Chen: Department of Accounting, National Yunlin University of Science and Technology, Yunlin 64002, Taiwan
Enny Susilowati Mardjono: Department of Accounting, National Yunlin University of Science and Technology, Yunlin 64002, Taiwan
Yi-Fang Yang: Department of Accounting and Information Systems, Chang Jung Christian University, Tainan 71101, Taiwan

Sustainability, 2020, vol. 12, issue 18, 1-15

Abstract: Two professional service organizations, an auditor and a tax agent, provide services to the same target clients. Taiwan established a new regulatory system for tax agents in 2004, which directly enhances their ability to compete with auditors. From the perspective of the economic theory of regulation, this study investigates the indirect effects of the new regulatory system on the business of auditors. We focus on auditors in proprietorship audit firms and divide the sample period into before and after 2004. This study establishes a cross-sectional regression equation to test our hypotheses. We classify the types of business into three levels, total amount, three categories and six individual items. Based on the 1989–2017 Survey Report of Audit Firms in Taiwan, we find that auditors perform better after 2004, indicating that increased competition leads to positive sustainability for auditors. Further results show that the effects of the regulation on auditors’ performance are greater after 2004, additional evidence of the positive indirect effect on auditors. This study contributes to the literature, provides public policy implications to regulators and contributes managerial information to auditors.

Keywords: competition; sustainability; auditors; tax agents; proprietorship audit firms (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2071-1050/12/18/7266/pdf (application/pdf)
https://www.mdpi.com/2071-1050/12/18/7266/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:18:p:7266-:d:408981

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().