Increased competition in an unfavourable audit market following audit privatisation: The Iranian experience

Fakhroddin Mohammad-Rezaei, Norman Mohd Saleh, Muhammad Jahangir Ali

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

A sudden surge of competition following audit privatisation in the Iranian audit market may create some positive or negative consequences on audit quality. Such significant accounting reform occurred in the unfavourable audit market of Iran where the demand for high quality audit services as well as litigation risks are low. This study examines whether increased competition in the Iranian audit market has any impact on audit fees, audit quality and auditor switching. Findings from this study indicate that increased competition in an unfavourable audit market is more likely to result in unfavourable consequences encompassing price competition (decreasing audit fees) rather than quality competition (audit quality improvement), and increased opportunistic auditor switching. This study offers policymakers some suggestions to mitigate the potentially unfavourable consequences of increased competition in an unfavourable audit market.

Original languageEnglish
Pages (from-to)115-149
Number of pages35
JournalAsian Journal of Business and Accounting
Volume8
Issue number1
Publication statusPublished - 1 Jun 2015

Fingerprint

Audit
Audit market
Privatization
Audit quality
Auditor switching
Audit fees
Litigation risk
Encompassing
Price competition
Quality competition
Iran
Politicians
Quality audit
Quality improvement

Keywords

  • Audit fees
  • Audit market competition
  • Audit privatisation
  • Audit quality
  • Auditor switching
  • Iran
  • Unfavourable audit market

ASJC Scopus subject areas

  • Accounting
  • Business and International Management

Cite this

Increased competition in an unfavourable audit market following audit privatisation : The Iranian experience. / Mohammad-Rezaei, Fakhroddin; Mohd Saleh, Norman; Ali, Muhammad Jahangir.

In: Asian Journal of Business and Accounting, Vol. 8, No. 1, 01.06.2015, p. 115-149.

Research output: Contribution to journalArticle

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