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A Basic Quantification of the Competitive Implications of the Demise of Arthur Andersen

  • Emilie Feldman

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    Andersen’s exit from the already-concentrated market for auditing services is shown to have increased market concentration and audit fees. Changes in market concentration are found to be significantly related to changes in audit fees, suggesting that the structure-performance hypothesis is applicable to the post-Andersen accounting industry and that the “Final Four” accounting firms may have exercised market power in this environment. The paper concludes with a discussion of the implications of Andersen’s exit from the market. Copyright Springer Science+Business Media, LLC 2006

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    File URL: http://hdl.handle.net/10.1007/s11151-006-9117-5
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    Article provided by Springer in its journal Review of Industrial Organization.

    Volume (Year): 29 (2006)
    Issue (Month): 3 (November)
    Pages: 193-212

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    Handle: RePEc:kap:revind:v:29:y:2006:i:3:p:193-212
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    7. Prager, Robin A & Hannan, Timothy H, 1998. "Do Substantial Horizontal Mergers Generate Significant Price Effects? Evidence from the Banking Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 46(4), pages 433-52, December.
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    9. Kim, E Han & Singal, Vijay, 1993. "Mergers and Market Power: Evidence from the Airline Industry," American Economic Review, American Economic Association, vol. 83(3), pages 549-69, June.
    10. Sullivan, Mary W, 2002. "The Effect of the Big Eight Accounting Firm Mergers on the Market for Audit Services," Journal of Law and Economics, University of Chicago Press, vol. 45(2), pages 375-99, October.
    11. Tonge, Stanley D. & Wootton, Charles W., 1991. "Auditor concentration and competition among the large public accounting firms: Post-merger status and future implications," Journal of Accounting and Public Policy, Elsevier, vol. 10(2), pages 157-172.
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