Abstract

http://ssrn.com/abstract=2187947
 
 

References (33)



 
 

Citations (1)



 
 

Footnotes (3)



 


 



The Auditing Oligopoly and Lobbying on Accounting Standards


Abigail M. Allen


Harvard Business School

Karthik Ramanna


Harvard University - Harvard Business School

Sugata Roychowdhury


Boston College

August 19, 2013

Harvard Business School Accounting & Management Unit Working Paper No. 13-054

Abstract:     
We examine how the tightening of the U.S. auditing oligopoly over the last twenty-five years — from the Big 8 to the Big 6, the Big 5, and, then, the Big 4 — has affected the incentives of the Big N, as manifest in their lobbying preferences on accounting standards. We find, as the oligopoly has tightened, Big N auditors are more likely to express concerns about decreased “reliability” in FASB-proposed accounting standards (relative to an independent benchmark); this finding is robust to controls for various alternative explanations. The results are consistent with the Big N auditors facing greater political and litigation costs attributable to their increased visibility from tightening oligopoly and with decreased competitive pressure among the Big N to satisfy client preferences (who, relative to auditors, favor accounting flexibility over reliability). The results are inconsistent with the claim that the Big N increasingly consider themselves “too big to fail” as the audit oligopoly tightens.

Number of Pages in PDF File: 58

working papers series





Download This Paper

Date posted: December 11, 2012 ; Last revised: August 22, 2013

Suggested Citation

Allen, Abigail M. and Ramanna, Karthik and Roychowdhury, Sugata, The Auditing Oligopoly and Lobbying on Accounting Standards (August 19, 2013). Harvard Business School Accounting & Management Unit Working Paper No. 13-054. Available at SSRN: http://ssrn.com/abstract=2187947 or http://dx.doi.org/10.2139/ssrn.2187947

Contact Information

Abigail M. Allen
Harvard Business School ( email )
Soldiers Field
Boston, MA 02163
United States
Karthik Ramanna (Contact Author)
Harvard University - Harvard Business School ( email )
Morgan 389
Boston, MA 02163
United States
HOME PAGE: http://www.hbs.edu/kramanna
Sugata Roychowdhury
Boston College ( email )
140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States
617-552-1764 (Phone)
Feedback to SSRN


Paper statistics
Abstract Views: 4,518
Downloads: 1,692
Download Rank: 4,745
References:  33
Citations:  1
Footnotes:  3

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.344 seconds