EU Statutory Audit Reform

Audit Analytics was recently cited in a study commissioned by the European Parliament, EU Statutory Audit Reform: Impact on costs, concentration and competition. The authors, Marlene Willekens, Simon Dekeyser, and Ines Simac of KU Leuven and BI Norwegian Business School, aim to analyze the impact of the EU Audit Reform on audit fees and the audit market.

The study investigates three main objectives:

  1. Is there a (quantifiable) result of the Audit Reform in terms of reduced market concentration and increased market competition in the EU?
  2. Is there a material difference in costs for auditees after the Audit Reform?
  3. Are there inconsistencies in implementation of the Audit Reform by Member States, and if so, what are the consequences?

The authors concluded:

“Based on data from archival databases and a survey, we present evidence suggesting that rivalry between the largest audit suppliers increased, as did audit costs, non-Big 4 audit market share, and joint audit rates. Non-audit services (NAS) fees earned by the incumbent auditor decreased.”

Here are some recent blog posts where Audit Analytics has looked at similar topics such as joint audit fees, auditor changes, and market concentration on certain indices:

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