Christopher Bleibtreu

Bleibtreu, Christopher & Stefani, Ulrike (2018)

Auditor Incentives and the Structure of the Audit Market – A Basic Model for Investigating Simultaneous Effects of Audit Market Regulations

BFuP. Betriebswirtschaftliche Forschung und Praxis, 70(4), s. 416- 439.

For decades, legislators worldwide have been discussing the merits of regulating their national audit markets. In this debate, the focus has primarily been on the regulations’ effects on incentives, both those of preparers of financial statements to report truthfully and those of auditors to detect errors or even fraud and to correctly report their findings to the public. For some of the proposed measures, the empirical evidence as to whether they indeed improve such incentives remains inconclusive. In addition, there is a concern that certain regulations could negatively affect the structure of the audit market. Changes in the market structure, in turn, can either attenuate or reinforce the regulations’ effects on preparers’ and auditors’ incentives. To a large extent, this unintended side-effect has been neglected in the discussions. We adapt a spatial competition model to the audit market. This model allows simultaneously analyzing the incentive and market structure effects resulting from regulations and thus determining their overall impact

Bleibtreu, Christopher & Stefani, Ulrike (2018)

The Effects of Mandatory Audit Firm Rotation on Client Importance and Audit Industry Concentration

Accounting Review, 93(1), s. 1- 27. Doi: 10.2308/accr-51728

Recently, a system of audit firm rotation has been implemented for the audits of listed companies conducted in the European Union (EU). In the U.S., in contrast, the regulator decided against such rotation. Whereas proponents argue that rotation would strengthen independence and decrease audit market concentration, opponents stress the importance of auditors' learning effects, which would be eliminated by a change in auditors. In extending the market matching model of Salop (1979), we provide an analysis that integrates these contradictory views. We assume that both auditors' industry expertise and their experience in auditing a client decrease audit costs. We investigate the bidding strategies applied to re-acquire clients that were lost due to rotation, auditors' profit contributions, the equilibrium number of auditors (i.e., audit market concentration), and the economic importance of specific clients. Our findings indicate that the regulators' goals of simultaneously decreasing client importance and audit market concentration are in direct conflict and, therefore, the rotation system might have unintended consequences. Our model, thus, suggests how different institutional parameters give rise to economic forces that can support diverging decisions regarding the implementation of MAR.

Stefani, Ulrike & Bleibtreu, Christopher (2013)

Unternehmensbewertung

Klamar, Nils; Sommer, Ulrich & Weber, Ingo (red.). Der effiziente M&A Prozess

Bleibtreu, Christopher & Stefani, Ulrike (2012)

Auditing, Consulting, and Audit Market Concentration

Zeitschrift für Betriebswirtschaft / Journal of Business Economics, 82, s. 41- 70. Doi: 10.1007/s11573-012-0597-5

Bleibtreu, Christopher & Stefani, Ulrike (2018)

The interdependence between the structure of the audit market and financial reporting quality

[Academic lecture]. EIASM Workshop on Audit Quality.

Bleibtreu, Christopher & Stefani, Ulrike (2018)

The interdependence between the structure of the audit market and financial reporting quality

[Academic lecture]. AAA Annual Meeting.

Bleibtreu, Christopher (2018)

The effects of mandatory audit firm rotation on Big 4 and non-Big 4 audit firms' market shares and client importance

[Academic lecture]. Annual Accounting Conference.