Prior research provides mixed evidence about whether sufficient audit market competition exists and whether competition impairs or improves audit quality. A major impediment to this stream of research is the unobservable nature of the bidding process by which auditors compete for clients. In...

The extant auditing literature documents an inconsistent relationship between audit fees and market concentration. In this paper, we argue that the impact of market concentration on audit fees is auditor and auditee specific. Based on the fact that the audit services to an auditee are generally...