The effect of auditor narcissism on audit market competition

Abstract

Purpose This paper aims to assess auditor narcissism’s effect on audit market competition (auditor concentration, clients’ concentration and competitive pressure). Design/methodology/approach This paper’s method is descriptive-correlational based on published information from listed firms on the Tehran Stock Exchange from 2012 to 2018 using a sample of 188 firms (1,310 observations). The method used for hypothesis testing is linear regression using panel data. Findings The results show a negative and significant relationship between auditor narcissism and audit market competition and its indices, including auditor concentration, clients’ concentration and competitive pressure. Moreover, a positive and significant relationship was observed between audit quality and audit market competition and its indices, including auditor concentration, client concentration and competitive pressure. Originality/value To analyzes competition indices in the audit market (auditor concentration, clients’ concentration and competitive pressure). The variable is assessed once more using the exploratory factor analysis of the so-called three variables single variable, named audit market competition. So the central question of the study is investigated within a broader sense. Moreover, as the present study is carried out in the emergent financial markets with extremely competitive audit markets to figure out the effect of auditors’ intrinsic characteristics on such markets’ competitiveness, it can provide useful information in this field.

Effects of anticipatory socialization, professional commitment, and moral intensity on whistleblowing intentions by accounting students: a moderated mediation analysis

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Auditor industry expertise and external audit prices: empirical evidence from Amman Stock Exchange-listed companies

“…This problem is especially important for large firms that rely on capital providers or lenders to operate. To obtain the necessary financing, such businesses must provide true financial information given by management and examined by specialized auditors (Alharasis et al, 2022c;Mohammadi et al, 2021). In the product differentiation scenario, auditors should charge high prices for their better services (fee premium).…”

“…According to DeFond et al (2000) and Fung et al (2012), the first measure depicts the product differentiation scenario by capturing the audit firm's (ISP1) MS. This metric implies that auditors offer a superior and unique audit service to a certain sector, for which they charge a premium rate (Mohammadi et al, 2021). However, in accordance with Ettredge and Greenberg (1990) and Hay and Jeter (2011), the second metric is the PS of the industry (ISP2), which incorporates cost savings associated with efficiency improvements.…”

“…(2012), the first measure depicts the product differentiation scenario by capturing the audit firm's ( ISP1 ) MS. This metric implies that auditors offer a superior and unique audit service to a certain sector, for which they charge a premium rate (Mohammadi et al. , 2021).…”

Audit Committee Independence and Auditor Reporting for Financially Distressed Companies: Evidence From an Emerging Economy

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