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Effects Of Increased Competition On Smallsized Auditors In Taiwan: Fight Or Flight?

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  • Yahn-Shir Chen
  • Yi-Fang Yang
  • I-Ching Huang

Abstract

Taiwan established the Certified Public Bookkeepers Act to regulate tax agents in providing services to small and medium-sized enterprises in 2004. The Act enhances the capabilities of tax agents in competing business with auditors. Auditors face increased competition in rendering services to the same target clients as tax agents. What is the responding measure, fight or flight, for auditors? Based on both economic theory and business competitive strategy theory, this study investigates the effects of the Certified Public Bookkeepers Act in 2004 on small-sized auditors in Taiwan. Empirical results indicate that both businesses and operating performance of auditors are better after the regulation, consistent with the responding measure of fight. This study contributes knowledge to the literature and conveys managerial implication to the practitioners.

Suggested Citation

  • Yahn-Shir Chen & Yi-Fang Yang & I-Ching Huang, 2021. "Effects Of Increased Competition On Smallsized Auditors In Taiwan: Fight Or Flight?," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 15(1), pages 1-17.
    • Handle: RePEc:ibf:ijbfre:v:15:y:2021:i:1:p:1-17
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    References listed on IDEAS

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    More about this item

    Keywords

    Tax Agents; Auditors; Proprietorship Public Accounting Firms; Operating Performance;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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