Date of Graduation
8-2024
Document Type
Dissertation
Degree Name
Doctor of Philosophy in Business Administration (PhD)
Degree Level
Graduate
Department
Accounting
Advisor/Mentor
Shipman, Jonathan
Committee Member
Peters, Gary
Second Committee Member
Cassell, Cory
Keywords
Auditing; Competition; Mutual funds
Abstract
Mutual funds are an important industry and component of capital markets, with $34 trillion in assets under management that hold 32 percent of exchange-traded common equities. In this industry, there are often multiple auditors serving the same client concurrently, which could impact auditor behavior. I examine the determinants of engaging with multiple auditors, finding that it is driven by fund complex size, recent merger activity, and having multiple locations. I also examine the consequences of this dynamic, finding that funds in multiple auditor complexes pay lower audit fees and have higher audit quality, as proxied by audit adjustments. I find that audits with adjustments have higher fees, which are driven by funds in multiple auditor complexes where auditors can recoup previously sacrificed fees when significant audit issues arise. Taken together, these results provide insight into how auditors manage their business, particularly when there is pressure to perform. The findings of this paper shed light on how auditors respond to varying competitive environments and maintain their client relationships, which is an aspect of audit market competition that has not been studied to date and should be of interest to academics, regulators, and practitioners.
Citation
Anderson, C. M. (2024). Determinants and Consequences of Engaging with Multiple Auditors in the Mutual Fund Industry. Graduate Theses and Dissertations Retrieved from https://scholarworks.uark.edu/etd/5434