%0 Journal Article
%T The Audit Market Dynamics in a Mandatory Joint Audit Setting: The French Experience
%A Charles Piot
%A Lamya Kermiche
%J Journal of Accounting, Auditing & Finance
%@ 2160-4061
%D 2018
%R 10.1177/0148558X16680716
%X Policy makers in France have considered joint audits as a solution to mitigate the audit market concentration and the ¡°systemic¡± risk associated with Big 4 auditors. We implement a Markovian analysis where audit clients chose between different types of combinations across Big 4 and smaller auditors. Our main findings support the view that the French joint audit system is effective in maintaining market openness and in mitigating the Big 4 domination in the long run. An investigation of the determinants driving changes in joint audit combinations suggests little economic support in favor of two Big 4 combinations, whereas changes in audit clients¡¯ agency costs (e.g., higher ownership concentration) tend to explain the performance of mixed and two non-Big 4 combinations. Overall, this study supports the European Commission¡¯s position on the potential benefits of joint audits in mitigating the market concentration; it also suggests that it might not be necessary to impose mixed joint audits to achieve that objective
%K joint audit
%K auditor concentration
%K auditor switch
%K Markov chain
%K France
%U https://journals.sagepub.com/doi/full/10.1177/0148558X16680716