Faculty Publications


Audit firm concentration and competition: Effects of consolidation since 1997.

SelectedWorks Author Profiles:

Maria T. Cabán-García

Document Type


Publication Date


Date Issued

January 2009

Date Available

June 2013




For many years, businesses, government regulators, and the public have expressed concern about the dominance of a few large public accounting firms in the audit market. Recent events have increased concern about the lack of competition in the auditing industry. Using market concentration measures we examine the level of competition among the remaining active audit firms before and after the merger between Price Waterhouse and Coopers & Lybrand and before and after the dissolution of Arthur Andersen. We also segment the audit market by auditor and client size and examine the effects of the consolidating events from the perspectives. We find that concentration did indeed increase after both events, but in most instances, decreased in the years between those two events. However, the remaining Big Four audit firms continue to dominate the market for audits of publicly held companies, particularly audits of large firms. We also find that, while some segments of the audit market are highly concentrated, there are few segments that are relatively competitive.


Abstract only. Full-text article is available through licensed access provided by the publisher. Published in Journal of Theoretical Accounting Research, 5(1), 1-24.




Iona College, Hagan School of Business

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