Deloitte’s response to the ‘Initial review of relevant academic literature’
Professor Vivien Beattie of Glasgow University prepared a review of academic literature for the Competition Commission (CC), published in April 2012. The Literature Review sought to present an overview of research in a number of areas, including audit quality, non-audit services, tendering, etc; and focuses on the more recent research.
In this paper, Deloitte sets out comments on a number of the key issues raised in the Literature Review, and concludes that the most up to date, empirical literature relating to the UK is broadly supportive of the perspective that Deloitte has set out to the CC. The Literature Review acknowledges:
- The multi-dimensional nature of audit quality
- That high concentration in a market does not necessarily imply the existence of market power/lack of competition
- That when audit firms compete on price and quality, high levels of concentration do not indicate a lack of competition