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The Effect of the Big Eight Accounting Firm Mergers on the Market for Audit Services

Author

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  • Sullivan, M.W.

Abstract

The research assesses how the two Big Eight mergers of 1989 affected the market for audit services. A data set of 1,978 firms over a 12-year period is used to test four theories of how the mergers could have affected competition and consumer welfare. The study finds that the mergers reduced the marginal costs of auditing large clients. There is no evidence that the mergers were anticompetitive or that they reduced costs for all types of audit buyers.

Suggested Citation

  • Sullivan, M.W., 2000. "The Effect of the Big Eight Accounting Firm Mergers on the Market for Audit Services," Papers 00-2, U.S. Department of Justice - Antitrust Division.
    • Handle: RePEc:fth:usjuat:00-2
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    Cited by:

    1. Michael Willenborg, 2002. "Discussion of “Brand Name Audit Pricing, Industry Specialization, and Leadership Premiums post†Big 8 and Big 6 Mergers†," Contemporary Accounting Research, John Wiley & Sons, vol. 19(1), pages 111-116, March.
    2. Elizabeth Carson & Neil Fargher, 2007. "Note on audit fee premiums to client size and industry specialization," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 47(3), pages 423-446, September.
    3. Oana Raluca Ivan, 2011. "Audit Fee Econometrical Models An Overview Of The Auditing Research Literature," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(13), pages 1-20.

    More about this item

    Keywords

    MERGERS ; AUDITING ; ENTERPRISES;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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