Aspects Regarding the Structure of the Financial Audit Market in the European Union from Fees Perspective

The audit market, developed out of the need to strengthen the credibility and the quality of financial reporting, has led since the 1980s to a concentration around large audit firms, the dominance effect being marked on the one hand by the auditor’s increasing reputation and notoriety, and on the ot...

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Autores principales:	Ovidiu-Constantin BUNGET, Alin-Constantin DUMITRESCU, Rodica Gabriela BLIDISEL, Oana Alina BOGDAN, Valentin BURCA
Formato:	article
Lenguaje:	EN
Publicado:	Chamber of Financial Auditors of Romania 2021
Materias:	audit market structure fees financial audit services non-audit services Accounting. Bookkeeping HF5601-5689 Finance HG1-9999
Acceso en línea:	https://doaj.org/article/4948d6cbf449452b88a281bdfc48870d
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spelling	oai:doaj.org-article:4948d6cbf449452b88a281bdfc48870d2021-11-08T12:36:53ZAspects Regarding the Structure of the Financial Audit Market in the European Union from Fees Perspective10.20869/AUDITF/2021/164/0241583-58121844-8801https://doaj.org/article/4948d6cbf449452b88a281bdfc48870d2021-11-01T00:00:00Zhttp://revista.cafr.ro/temp/Article_9682.pdfhttps://doaj.org/toc/1583-5812https://doaj.org/toc/1844-8801The audit market, developed out of the need to strengthen the credibility and the quality of financial reporting, has led since the 1980s to a concentration around large audit firms, the dominance effect being marked on the one hand by the auditor’s increasing reputation and notoriety, and on the other hand by the client’s association with a reputed auditor, which contributes to improving the company’s image on the market. In this context, a major issue is represented by the level of the fees charged, as they represent key elements that may affect the auditor’s independence. Moreover, a sensitive aspect is the relationship between the fee charged for financial audit services and the one for non-audit services and the compensation practices between them. The European Commission wants to facilitate competition in an overly concentrated market and also provide the opportunity for small and medium-sized audit firms to become active players in the large corporate audit market through joint audit, in which at least one of the audit firms is not part of the Big4 group. The mandatory audit firm rotation and the limitation on the non-audit services provided are the main aspects of the recent audit reform that directly influences the fee level. The main purpose of this study is to analyse whether there is a pattern of audit costs at the community level. In this context, this paper aims to assess the uniformity of audit costs, namely to determine the structure of the audit market in the European Union. The research involves data set comparison methods, by analysing a sample of 2,896 firms listed on the stock exchange in 35 different states over the period 2013-2021. The main results of the research highlight the fact that entities outside the Big4 charge lower rates than large firms for the audit or audit-related services they provide. There is an obvious declining trend in the percentage of non-audit fees against the total fees since the entry into force of the two European reform regulations in 2014.Ovidiu-Constantin BUNGETAlin-Constantin DUMITRESCURodica Gabriela BLIDISELOana Alina BOGDANValentin BURCAChamber of Financial Auditors of Romaniaarticleaudit market structurefeesfinancial audit servicesnon-audit servicesAccounting. BookkeepingHF5601-5689FinanceHG1-9999ENAudit Financiar, Vol 19, Iss 164, Pp 724-742 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	audit market structure fees financial audit services non-audit services Accounting. Bookkeeping HF5601-5689 Finance HG1-9999
spellingShingle	audit market structure fees financial audit services non-audit services Accounting. Bookkeeping HF5601-5689 Finance HG1-9999 Ovidiu-Constantin BUNGET Alin-Constantin DUMITRESCU Rodica Gabriela BLIDISEL Oana Alina BOGDAN Valentin BURCA Aspects Regarding the Structure of the Financial Audit Market in the European Union from Fees Perspective
description	The audit market, developed out of the need to strengthen the credibility and the quality of financial reporting, has led since the 1980s to a concentration around large audit firms, the dominance effect being marked on the one hand by the auditor’s increasing reputation and notoriety, and on the other hand by the client’s association with a reputed auditor, which contributes to improving the company’s image on the market. In this context, a major issue is represented by the level of the fees charged, as they represent key elements that may affect the auditor’s independence. Moreover, a sensitive aspect is the relationship between the fee charged for financial audit services and the one for non-audit services and the compensation practices between them. The European Commission wants to facilitate competition in an overly concentrated market and also provide the opportunity for small and medium-sized audit firms to become active players in the large corporate audit market through joint audit, in which at least one of the audit firms is not part of the Big4 group. The mandatory audit firm rotation and the limitation on the non-audit services provided are the main aspects of the recent audit reform that directly influences the fee level. The main purpose of this study is to analyse whether there is a pattern of audit costs at the community level. In this context, this paper aims to assess the uniformity of audit costs, namely to determine the structure of the audit market in the European Union. The research involves data set comparison methods, by analysing a sample of 2,896 firms listed on the stock exchange in 35 different states over the period 2013-2021. The main results of the research highlight the fact that entities outside the Big4 charge lower rates than large firms for the audit or audit-related services they provide. There is an obvious declining trend in the percentage of non-audit fees against the total fees since the entry into force of the two European reform regulations in 2014.
format	article
author	Ovidiu-Constantin BUNGET Alin-Constantin DUMITRESCU Rodica Gabriela BLIDISEL Oana Alina BOGDAN Valentin BURCA
author_facet	Ovidiu-Constantin BUNGET Alin-Constantin DUMITRESCU Rodica Gabriela BLIDISEL Oana Alina BOGDAN Valentin BURCA
author_sort	Ovidiu-Constantin BUNGET
title	Aspects Regarding the Structure of the Financial Audit Market in the European Union from Fees Perspective
title_short	Aspects Regarding the Structure of the Financial Audit Market in the European Union from Fees Perspective
title_full	Aspects Regarding the Structure of the Financial Audit Market in the European Union from Fees Perspective
title_fullStr	Aspects Regarding the Structure of the Financial Audit Market in the European Union from Fees Perspective
title_full_unstemmed	Aspects Regarding the Structure of the Financial Audit Market in the European Union from Fees Perspective
title_sort	aspects regarding the structure of the financial audit market in the european union from fees perspective
publisher	Chamber of Financial Auditors of Romania
publishDate	2021
url	https://doaj.org/article/4948d6cbf449452b88a281bdfc48870d
work_keys_str_mv	AT ovidiuconstantinbunget aspectsregardingthestructureofthefinancialauditmarketintheeuropeanunionfromfeesperspective AT alinconstantindumitrescu aspectsregardingthestructureofthefinancialauditmarketintheeuropeanunionfromfeesperspective AT rodicagabrielablidisel aspectsregardingthestructureofthefinancialauditmarketintheeuropeanunionfromfeesperspective AT oanaalinabogdan aspectsregardingthestructureofthefinancialauditmarketintheeuropeanunionfromfeesperspective AT valentinburca aspectsregardingthestructureofthefinancialauditmarketintheeuropeanunionfromfeesperspective
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Aspects Regarding the Structure of the Financial Audit Market in the European Union from Fees Perspective

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