COMPETITIVENESS OF THE UKRAINIAN AUDIT MARKET

What is it about?

Ukrainian association with EU forces the implementation of some EU Directives and Regulation acts in Ukrainian audit market. One of the key issues for compliance with the EU principles is the presence of competition in the market. This paper provides new empirical evidence on the concentration in Ukrainian audit market. The use of different methods to measure market competitiveness: (i) traditional measurements of market competition (Hirschman Index, Lerner Index, Comprehensive concentration index, Entropy Index etc.) to examine market concentration; (ii) a multivariate regression analysis with dummy variables and Kruskal-Wallis test to confirm the hypothesis about market heterogeneity; allows to show that Ukrainian audit market has quasi-competitive character and is characterized by a high level of regional market concentration. To stimulate competition some policy implications are proposed in this paper. Among them are: cancellation of restrictive covenants for some market participants, promotion of integrity tendering practices in attracting auditors to perform tasks on the principles of transparency and openness; increasing the effectiveness of the Antimonopoly Committee of Ukraine regulatory activities in audit sphere; development of local audit practice.

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