Audit market concentration and the price of an audit
The Big 4 auditors appear on 32 recent papers in the finance and accounting journals, but only 9 of 38 papers on the audit market carry a concentration, competition or fee keyword. Audit fees have risen sharply, and regulators worry about four firms auditing almost every large company. Does concentration raise fees, lower quality or both?
What prompted this
Since October 2025, 38 papers carry a Big 4 or audit-market keyword (18 in finance journals, 13 in accounting); "Big 4 auditors" appears on 32. Only 9 of the 38 also carry a concentration, competition, fee, choice or market-share keyword, and "audit market concentration" on a single paper.
Questions
- In local audit markets where one Big 4 office dominates, are fees higher and are restatements more or less common?
- When a Big 4 firm exits a market segment or a country, what happens to the fees and the quality of the clients it leaves?
- Do joint audits or shared audits, as tried in France and proposed in the UK, change concentration or only cost?
Data that could help
Audit fees and auditor identities (Audit Analytics), office-level market shares, restatements and inspection findings.
Next step
Compute office-level audit market concentration for US metropolitan areas and relate it to fee growth and restatement rates for 2015–2025.