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The effect of auditor narcissism on audit market competition

Hojat Mohammadi (Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran)
Mahdi Salehi (Department of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran)
Meysam Arabzadeh (Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran)
Hassan Ghodrati (Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran)

Management Research Review

ISSN: 2040-8269

Article publication date: 16 June 2021

Issue publication date: 9 November 2021

595

Abstract

Purpose

This paper aims to assess auditor narcissism’s effect on audit market competition (auditor concentration, clients’ concentration and competitive pressure).

Design/methodology/approach

This paper’s method is descriptive-correlational based on published information from listed firms on the Tehran Stock Exchange from 2012 to 2018 using a sample of 188 firms (1,310 observations). The method used for hypothesis testing is linear regression using panel data.

Findings

The results show a negative and significant relationship between auditor narcissism and audit market competition and its indices, including auditor concentration, clients’ concentration and competitive pressure. Moreover, a positive and significant relationship was observed between audit quality and audit market competition and its indices, including auditor concentration, client concentration and competitive pressure.

Originality/value

To analyzes competition indices in the audit market (auditor concentration, clients’ concentration and competitive pressure). The variable is assessed once more using the exploratory factor analysis of the so-called three variables single variable, named audit market competition. So the central question of the study is investigated within a broader sense. Moreover, as the present study is carried out in the emergent financial markets with extremely competitive audit markets to figure out the effect of auditors’ intrinsic characteristics on such markets’ competitiveness, it can provide useful information in this field.

Keywords

Citation

Mohammadi, H., Salehi, M., Arabzadeh, M. and Ghodrati, H. (2021), "The effect of auditor narcissism on audit market competition", Management Research Review, Vol. 44 No. 11, pp. 1521-1538. https://doi.org/10.1108/MRR-08-2020-0517

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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