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Unregulated Markets for Audit Services

Author

Listed:
  • Karim Jamal

    (School of Business, University of Alberta, Canada)

  • Shyam Sunder

    (School of Management, Yale University, USA)

Abstract

Certification 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.

Suggested Citation

  • Karim Jamal & Shyam Sunder, 2011. "Unregulated Markets for Audit Services," The Japanese Accounting Review, Research Institute for Economics & Business Administration, Kobe University, vol. 1, pages 1-16, December.
    • Handle: RePEc:kob:tjrevi:dec2011:v:1:p:1-16
    as

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    File URL: https://www.rieb.kobe-u.ac.jp/tjar/article/vol1/pdf/1.Jamal_and_Sunder.pdf
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    References listed on IDEAS

    as
    1. Shyam Sunder & Michael Maier & Karim Jamal, 2004. "Enforced Standards Versus Evolution by General Acceptance: A Comparative Study of E-Commerce Privacy Disclosure and Practice in the U.S. and the U.K," Yale School of Management Working Papers amz2630, Yale School of Management, revised 01 Nov 2004.
    2. Karim Jamal & Michael Maier & Shyam Sunder, 2003. "Privacy in E‐Commerce: Development of Reporting Standards, Disclosure, and Assurance Services in an Unregulated Market," Journal of Accounting Research, Wiley Blackwell, vol. 41(2), pages 285-309, May.
    3. Mennicken, Andrea, 2010. "From inspection to auditing: audit and markets as linked ecologies," LSE Research Online Documents on Economics 27054, London School of Economics and Political Science, LSE Library.
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    More about this item

    Keywords

    Private Audit; Regulation; Certification Services; Audit Reports;
    All these keywords.

    JEL classification:

    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - 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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