On the benefits of audit market consolidation evidence from merged audit firms Qihui Gong, Oliver Zhen Li, Yupeng Lin & Liansheng Wu
Tipo de material:
ArtículoDescripción: Páginas 463 a la 488Tema(s):
En: The accounting review 2016 V.91 No. 2 (Mar)Incluye tablas, referencias y apéndicesResumen: We examine efficiency improvement associated with audit firm mergers. Our analysis is made possible by a unique dataset of audit hours in China. We find a significant reduction in audit hours, unaccompanied by a deterioration in audit quality, of merged audit firms. Further, we find a larger reduction in audit hours when acquirers are Chinese domestic Big 10 audit firms and when client firms are more complex. These results are consistent with the notion of economies of scale arising from horizontal mergers. However, enhanced efficiency does not necessarily reduce audit fees. Instead, we find an increase in audit fees when acquirers are international Big 4 audit firms even when we control for possible changes in market power. This premium is at least partially due to the certification effect of international Big 4 audit firms.
| Tipo de ítem | Biblioteca actual | Colección | Signatura topográfica | Info Vol | Copia número | Estado | Fecha de vencimiento | Código de barras | |
|---|---|---|---|---|---|---|---|---|---|
| Revistas | Central Bogotá Sala Hemeroteca | Colección Hemeroteca | 657 (Navegar estantería(Abre debajo)) | 2016 V.91 No. 2 (Mar) | 1 | Disponible | 0000002031463 |
We examine efficiency improvement associated with audit firm mergers. Our analysis is made possible by a unique dataset of audit hours in China. We find a significant reduction in audit hours, unaccompanied by a deterioration in audit quality, of merged audit firms. Further, we find a larger reduction in audit hours when acquirers are Chinese domestic Big 10 audit firms and when client firms are more complex. These results are consistent with the notion of economies of scale arising from horizontal mergers. However, enhanced efficiency does not necessarily reduce audit fees. Instead, we find an increase in audit fees when acquirers are international Big 4 audit firms even when we control for possible changes in market power. This premium is at least partially due to the certification effect of international Big 4 audit firms.