‘Big 4’ influence on audit market

Author:

Tache Marta1

Affiliation:

1. The Bucharest University of Economic Studies , Bucharest , Romania

Abstract

Abstract The main purpose of this paper is to determine the impact that Big 4 companies have had after the adoption of International Financial Reporting Standards (IFRS) became mandatory on the audit market. Thus, after thorough research of the specialised studies, the impact of the financial reporting based on IFRS is analysed, while considering that Big 4 companies have created a strong monopoly that led to several changes on the audit market. All the companies listed on the Bucharest Stock Exchange that traded premium shares from 2011 to 2019 were analysed. With the use of ANOVA analysis, this paper verifies if the profitability, shareholders’ funds, firm size and the size of the business group influence the choice of the audit firm. Our results confirm that the choice of an audit firm is influenced by the shareholders’ funds, number of employees and the size of the business group. Besides, this paper presents an analysis of the changes that have occurred from 2011–2019 on the audit market of Romania.

Publisher

Walter de Gruyter GmbH

Subject

General Earth and Planetary Sciences,General Environmental Science

Reference64 articles.

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3. Albu, C. N., Albu, N., Szilveszter, F. P. P., & Vladu, D. C. (2011). The power and the glory of Big 4: A research note on independence and competence in the context of IFRS implementation. Accounting and Management Information Systems, 10(1), 43–54.

4. Alzoubi, E. (2016). Audit quality and earnings management: Evidence from Jordan. Journal of Applied Accounting Research, 16(2), 170–189.

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