Long-term concentration in the Dutch audit market : the use of auditor association membership lists in historical research
van Witteloostuijn, Arjen
Faculty of Applied Economics
Abacus: a journal of accounting and business studies / University of Sydney. Department of Accounting. - Sydney
, p. 152-177
This article provides an empirical description of the complete Dutch audit market from its inception, in the late nineteenth century, to the present day. Specifically, it documents the development of the structure of the Dutch audit industry in terms of the number of audit firms and the audit firm size distribution. The audit firm size measure used is the number of auditors affiliated with an audit firm. Central in the collection of the audit firm data are the membership lists of Dutch auditor associations. These, with additional information from Dutch financial directories, permit the calculation, with two-year intervals, of the size of each existing audit firm with the number of auditors as firm-size measure. The data so obtained give the opportunity to extend existing research on audit market concentration. The level of concentration in the Dutch audit market is determined over a long period, at a large number of points in time. The results show concentration levels that are low and stable for a long period. Only in the past two decades have these levels increased substantially. Potential explanations for this pattern are: (a) increasing regulation of the demand side of the Dutch audit market, (b) increasing technological complexity of the audit process, (c) increasing (international) client concentration, and (d) mergers of the international affiliates of the Dutch audit firms. The article concludes that auditor association membership lists provide a rich data set and create other opportunities for further historical audit (market) research.