The Effect of the Big Eight Accounting Firm Mergers on the Market for Audit Services

Working Paper No. EAG 00-2

24 Pages Posted: 12 Oct 2000

See all articles by Mary W. Sullivan

Mary W. Sullivan

US Department of Justice - Economic Analysis Group

Multiple version iconThere are 2 versions of this paper

Date Written: March 17, 2000

Abstract

The research assesses how the two Big Eight mergers of 1989 affected the market for audit services. A data set of 1,978 firms over a 12-year period is used to test four theories of how the mergers could have affected competition and consumer welfare. The study finds that the mergers reduced the marginal costs of auditing large clients. There is no evidence that the mergers were anticompetitive or that they reduced costs for all types of audit buyers.

JEL Classification: L11, L84, M49

Suggested Citation

Sullivan, Mary W., The Effect of the Big Eight Accounting Firm Mergers on the Market for Audit Services (March 17, 2000). Working Paper No. EAG 00-2, Available at SSRN: https://ssrn.com/abstract=237289 or http://dx.doi.org/10.2139/ssrn.237289

Mary W. Sullivan (Contact Author)

US Department of Justice - Economic Analysis Group ( email )

Antitrust Division
Washington, DC 20530
United States
202-994-5189 (Phone)

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