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Current accounting investigations: effect on Big 5 market shares

Christie L. Comunale (School of Professional Accountancy, Long Island University – C.W. Post Campus, Brookville, New York, USA)
Thomas R. Sexton (Harriman School for Management and Policy, Stony Brook University, Stony Brook, New York, USA)

Managerial Auditing Journal

ISSN: 0268-6902

Article publication date: 1 August 2003


Arthur Andersen’s conviction and its decision not to audit public firms will transform the Big 5 into the Big 4. Meanwhile, other Big 4 firms face investigations that threaten their future market shares. The article compares the observed post‐scandal shifts in market share with those estimated by a Markov model. It then estimates the year‐by‐year and long‐term market shares that the Big 4 firms would have achieved had they remained untouched by these investigations. The study finds that the absence of Arthur Andersen alone would not have led to excessive market share concentration. It demonstrates how the post‐scandal shifts reveal the impacts of the investigations on the Big 4 firms and provides market share benchmarks against which the firms can evaluate the long‐term effects of the investigations. Finally, the article concludes that a firm’s long‐term gain in market share depends on its ability to retain audit clients.



Comunale, C.L. and Sexton, T.R. (2003), "Current accounting investigations: effect on Big 5 market shares", Managerial Auditing Journal, Vol. 18 No. 6/7, pp. 569-576.




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