Unregulated Markets for Audit Services

Posted: 29 Mar 2012 Last revised: 10 Sep 2015

See all articles by Shyam Sunder

Shyam Sunder

Yale University - School of Management; Yale University - Cowles Foundation

Karim Jamal

University of Alberta - Department of Accounting, Operations & Information Systems

Multiple version iconThere are 2 versions of this paper

Date Written: October 1, 2011


Certification of financial reports is tightly regulated with the intent to ensure the quality of this service. In order to place this market within a larger perspective, Part I of this paper presents archival data on certification activity in the economy. The finding of widespread availability of a diverse set of certifiers for most goods and services points to the competitive conditions that accounting firms may encounter as they attempt to expand their range of services. In Part II we examine an instance of audit firms unsuccessfully competing with non-traditional assurance providers of e-commerce privacy certification. Their failure appears to be attributable, at least in part, to the high cost of certification, inferior standards, and poor compliance by their clients. In Part III we document the types of certification reports issued by government agencies and private certification services. Private certification agencies issue more detailed and informative certification reports compared to government agencies. We discuss the implications of these findings for the market for audit services.

Keywords: Private Audit, Regulation, Certification Services, Audit Reports

JEL Classification: M49, G34, G38

Suggested Citation

Sunder, Shyam and Jamal, Karim, Unregulated Markets for Audit Services (October 1, 2011). The Japanese Accounting Review, Vol. 1, pp. 2-16, 2011, University of Alberta School of Business Research Paper No. 2013-1012, Yale SOM Working Paper, Available at SSRN: https://ssrn.com/abstract=2014413

Shyam Sunder (Contact Author)

Yale University - School of Management ( email )

165 Whitney Avenue
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-432-6160 (Phone)

HOME PAGE: http://www.som.yale.edu/faculty/sunder/

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

Karim Jamal

University of Alberta - Department of Accounting, Operations & Information Systems ( email )

Edmonton, Alberta T6G 2R6
780-492-5829 (Phone)
780-492-3325 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics