Unregulated Markets for Audit Services
AbstractCertification of financial reports is tightly regulated with the intent to ensure the quality of this service. In order to place this market within a larger perspective, Part I of this paper presents archival data on certification activity in the economy. The finding of widespread availability of a diverse set of certififiers for most goods and services points to the competitive conditions that accounting firms may encounter as they attempt to expand their range of services. In Part II we examine an instance of audit firms unsuccessfully competing with non-traditional assurance providers of e-commerce privacy certification. Their failure appears to be attributable, at least in part, to the high cost of certifi cation, inferior standards, and poor compliance by their clients. In Part III we document the types of certifi cation reports issued by government agencies and private certifi cation services. Private certification agencies issue more detailed and informative certification reports compared to government agencies. We discuss the implications of these findings for the market for audit services.
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Bibliographic InfoArticle provided by Research Institute for Economics & Business Administration, Kobe University in its journal The Japanese Accounting Review.
Volume (Year): 1 (2011)
Issue (Month): (December)
Private Audit; Regulation; Certification Services; Audit Reports;
Find related papers by JEL classification:
- M49 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Other
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
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