0000000000005636
AUTHOR
Ludmila Rozgina
PIE statutory audit market concentration: evidence from Latvia
The reform of EU audit legislation was adopted by the Council of the EU in April 2014. The legislation consists of an audit Directive and an audit Regulation. The Directive applies to all statutory audits; the Regulation contains specific requirements for the statutory audits of public-interest entities (PIEs). The Regulation aims both at enhancing audit quality and at promoting competition in the audit market. Mandatory rotation, together with the incentives for joint audit and tendering, as well as the prohibition of certain non-audit services to audit clients - requiring de facto that another audit firm provides these services - are examples of measures that should make the market more d…
Concentration Dynamics in the Market for Audit of Public Interest Entities in Latvia
This paper studies the dynamics of concentration levels in the market for audit of public interest entities (further PIEs) in Latvia from 2016 to 2018. This is important to identify initial effects on concentration and the likely consequences of the new EU statutory audit legislation (i.e. Directive 2014/56/EU and Regulation 537/2014) entered into force in June 2016. This paper relies primarily on the analysis of the annual reports of Latvian PIE audit firms and their associates and computes some key measures describing concentration – the Herfindahl-Hirschman index and concentration ratios CR1 or CR4. It also analyses market concentration in different categories of PIEs, notably banks. The…