Audit Market Concentration and Audit Quality: Evidence from Analysts' Forecasts
被引:1
作者:
Brockbank, Bryan G.
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机构:
Oklahoma State Univ, Spears Sch Business, Sch Accounting, Stillwater, OK 74078 USAOklahoma State Univ, Spears Sch Business, Sch Accounting, Stillwater, OK 74078 USA
Brockbank, Bryan G.
[1
]
Do, Chuong
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机构:
Univ Nevada, Coll Business, Dept Accounting, Reno, NV USAOklahoma State Univ, Spears Sch Business, Sch Accounting, Stillwater, OK 74078 USA
Do, Chuong
[2
]
Lawson, Bradley P.
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机构:
Univ Nevada, Coll Business, Dept Accounting, Reno, NV USAOklahoma State Univ, Spears Sch Business, Sch Accounting, Stillwater, OK 74078 USA
Lawson, Bradley P.
[2
]
机构:
[1] Oklahoma State Univ, Spears Sch Business, Sch Accounting, Stillwater, OK 74078 USA
[2] Univ Nevada, Coll Business, Dept Accounting, Reno, NV USA
SYNOPSIS: Audit market concentration remains a concern due to its potential impact on audit quality. We examine whether audit market concentration influences properties of analysts' forecasts. We find that analyst forecasts are more accurate and less dispersed when audit markets are more concentrated. Consistent with regulators' concerns, we find evidence of decreased auditor independence in concentrated markets but also increased auditor effort and a higher likelihood of a Big N auditor. This results in an overall net positive effect between audit market concentration, audit quality, and ultimately, analysts' forecasts. These results are concentrated in settings where analysts rely more on audited financial statements. Our findings support regulators' concerns regarding concentration in the U.S. audit market but also help to explain why audit market concentration leads to improved audit quality.
机构:
Yale Univ, Dept Econ, New Haven, CT 06520 USA
NBER, Cambridge, MA 02138 USAYale Univ, Dept Econ, New Haven, CT 06520 USA
Berry, Steven
;
Waldfogel, Joel
论文数: 0引用数: 0
h-index: 0
机构:
NBER, Cambridge, MA 02138 USA
Univ Penn, Wharton Sch, Dept Business & Publ Policy, Philadelphia, PA 19104 USAYale Univ, Dept Econ, New Haven, CT 06520 USA
机构:
Yale Univ, Dept Econ, New Haven, CT 06520 USA
NBER, Cambridge, MA 02138 USAYale Univ, Dept Econ, New Haven, CT 06520 USA
Berry, Steven
;
Waldfogel, Joel
论文数: 0引用数: 0
h-index: 0
机构:
NBER, Cambridge, MA 02138 USA
Univ Penn, Wharton Sch, Dept Business & Publ Policy, Philadelphia, PA 19104 USAYale Univ, Dept Econ, New Haven, CT 06520 USA