AUDIT CONCENTRATION BY SEGMENT IN COMPANIES LISTED ON B3 FROM 2013 TO 2022
DOI:
https://doi.org/10.4270/ruc.2023109Keywords:
Audit concentration, Market power, BIG4, HHI Index, CR4 IndexAbstract
This study aims to analyze the degree of concentration of the independent audit market in companies listed on B3 by segment from 2013 to 2022 (the last ten years). For this, we created a database from several sources. We collected financial data from the Economática and Refinitiv platforms, as well as from the sites of B3, CVM, and the analyzed companies. We analyzed data in general and by three variables (Customer: 3,413 observations; Total Assets: 3,324 observations; and Revenue: 2,928 observations). We used the Herfindahl-Hirschman (HHI) and Concentration Ratio (CR4) indicators as metrics of audit concentration. As the main results, there was a significant concentration of the audit market in Brazil when considering the variables Revenue and Total Assets, while the Client variable did not show concentration regarding the CR4 indicator in recent years and had limited or moderate concentration regarding the HHI indicator. Other evidence suggests that, in smaller markets, with companies that hold a relevant share of Revenue and Total Assets, the audit change from BIG4 to non-BIG4 can result in substantial changes in concentration ratios. The present study contributes to the literature by analyzing the year and segment, providing a specific and comparative understanding of how the audit market is concentrated in each sector based on three criteria (Client, Asset, and Revenue).
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