The Market for Audit Services: The Role of Market Power

What is it about?

This summary of a conference plenary session presentation examines pricing in the market for financial statement audit services, specifically the role of market power in determining audit prices. Three research papers that examine this issue are summarized. The paper concludes that the pricing of audits is a very local phenomenon and that audit fees and prices depend on both the size of the audit firm and the size of its clients.

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