AUDIT MARKET CONCENTRATION IN LATIN AMERICA

The purpose of this paper is to provide a descriptive analysis of changes in the competitiveness of the market for audit services in six Latin American countries. Using a proxy for audit fees, the study presents market shares of Big Four and non-Big Four accounting firms in Argentina, Brazil, Chile, Colombia, and Peru during the period 2005 to 2017. The paper identifies market leaders using market shares based on audit fees and reports four-firm concentration ratios and Herfindahl Indices for the Big Four firms for the full sample and for individual countries separately. The results show that Big Four firms dominate the market for audit services in the six countries taken as a whole, but that the level of concentration remains relatively stable during our sample period. When countries are examined separately, we observe a similar pattern of highly concentrated markets. The literature on the market for audit services is dominated by studies in the U.S. market and in developed countries. There is very little, if any, recent evidence related to audit market concentration in the Latin American region. Our study extends prior research in audit markets by assessing a more recent period than previously studied, and a sample of countries normally excluded from prior research.