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Influence of Banks on Company Auditor Choice: The Case of Japan
Author(s) -
Pong Christopher K. M.,
Kita Tsutomu
Publication year - 2006
Publication title -
international journal of auditing
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.583
H-Index - 21
eISSN - 1099-1123
pISSN - 1090-6738
DOI - 10.1111/j.1099-1123.2006.00344.x
Subject(s) - audit , accounting , business , stock exchange , sample (material) , auditor independence , external auditor , stock market , finance , joint audit , internal audit , paleontology , horse , biology , chemistry , chromatography
The purpose of the paper is to examine the auditor services market in Japan in 2000. We used a sample of 1,485 companies listed on the Tokyo Stock Exchange. We found that auditor mix within the client base was dependent on the main bank. There was evidence that in some cases companies had a tendency to choose their main bank’s preferred auditor. We also found that the market was dominated by four audit firms: Shin Nihon, ChuoAoyama, Asahi and Tohmatsu. These four firms collectively audited 81% of the companies. There were reasonable levels of auditor choice for companies within each industry sector. One or more of the Big 4 firms had substantial market share in each industry sector.