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

A Basic Quantification of the Competitive Implications of the Demise of Arthur Andersen 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

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

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Publisher
Springer Journals
Copyright
Copyright © 2006 by Springer Science+Business Media, LLC
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-006-9117-5
Publisher site
See Article on Publisher Site

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.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Oct 13, 2006

References

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