Using a proprietary dataset consisting of all private firm audit engagements in 2000 from one Big 4 firm in Belgium, we investigate: (1) whether audit office industry scale is associated with a reduction of total, partner and staff audit hours and thus with efficiency gains triggered by...

In this paper we argue that audit firms rationally consider the potential reactions of their rivals when deciding how fiercely to compete in a given market. Based on prior literature in the field of industrial organization (Bernheim and Whinston [1990]), we hypothesize that competing with the...