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

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  • Emilie Feldman

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Abstract

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

Suggested Citation

  • Emilie Feldman, 2006. "A Basic Quantification of the Competitive Implications of the Demise of Arthur Andersen," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 29(3), pages 193-212, November.
  • Handle: RePEc:kap:revind:v:29:y:2006:i:3:p:193-212
    DOI: 10.1007/s11151-006-9117-5
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    References listed on IDEAS

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    Cited by:

    1. Joseph Gerakos & Chad Syverson, 2015. "Competition in the Audit Market: Policy Implications," Journal of Accounting Research, Wiley Blackwell, vol. 53(4), pages 725-775, September.
    2. Evans, Lawrance & Schwartz, Jeremy, 2014. "The effect of concentration and regulation on audit fees: An application of panel data techniques," Journal of Empirical Finance, Elsevier, vol. 27(C), pages 130-144.
    3. Fukukawa, Hironori & Karube, Masaru, 2013. "Audit Firm Switch and Engagement Partner Continuance," IIR Working Paper 13-05, Institute of Innovation Research, Hitotsubashi University.
    4. Numan, Wieteke & Willekens, Marleen, 2012. "An empirical test of spatial competition in the audit market," Journal of Accounting and Economics, Elsevier, vol. 53(1), pages 450-465.

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