Auditor Quality (Precision ) Test and Audit Market Competition

Document Type : Original Article

Authors
Hojat Mohammadi 1
Mehdi Salehi 2
meisam arabzadeh 3
hasan ghodrati 3
1 Accounting Ph.D Candidate, Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran
2 Accounting Assosiate Prof., Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran
3 Accounting Assistant Prof., Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran
Abstract
Auditor Quality ( Precision ) Test and Audit Market Competition
Abstract
The present study's main objective is to assess the effect of auditor interlock and precision on audit market competition (auditor concentration, employer concentration, and the competitive pressure of competitors).
This paper's method is descriptive-correlational based on collected information from listed firms on the Tehran Stock Exchange during 2012-2018 using a sample of 188 firms (1309 observations). The employed method for hypothesis testing is linear regression using panel data.
The obtained results from hypothesis testing indicate a positive and significant relationship between auditor precision and interlock and auditor and employer concentration. The results also show a negative and significant relationship between auditor precision and competitors' interlock and competitive pressure. Moreover, a negative and significant association is evident between auditor precision and interlock and the obtained variable (audit market competition) from exploratory factor analysis of three variables of auditor concentration, employer concentration, and competitors' competitive pressure.
The present study carried out in emergent financial markets with an extremely competitive audit market to specify the effect of auditor precision and interlock on such a market's competitiveness. It can have a considerable contribution to the field. The present study has reached a variable named audit market competition using the exploratory factor analysis of three variables of auditor concentration, employer concentration, and competitors' competitive pressure.
Keywords
Keywords: auditor interlock
auditor precision
audit market competition
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