What question did this study set out to answer?

The aim is to directly measure auditor concentration in the U.S. market using actual audit revenues.

June 15, 2026

Direct Measurement of Supplier Concentration in the Market for Audit Services.

Key Points

The aim is to directly measure auditor concentration in the U.S. market using actual audit revenues.
Analyzed actual audit revenues from the 28 largest CPA firms for the years 1983-1987.
Computed concentration measures to assess the market for audit services.
Compared direct measures with prior studies using surrogates for audit fees.
The U.S. market for audit services is found to be quite concentrated.
The concentration ratios derived are lower than those from previous studies based on surrogate measures.
Findings allow for more reliable international comparisons of auditor concentration.

Abstract

Abstract In this paper, auditor concentration in the United States is measured directly using actual audit revenues of public accounting firms. Direct measurement can reduce the bias that is generally present in concentration ratios that are based on surrogates for audit fees and yields measures that can be compared more reliably with ratios for other industries. Direct measures also can be used to make more reliable international comparisons of auditor concentration. Concentration measures for the years 1983 through 1987 that were computed from revenues of the 28 largest CPA firms indicate that the U.S. market for audit services is quite concentrated. Nonetheless, the ratios reported in this study are lower than the ratios reported in most of the prior studies on concentration that relied on various surrogates for audit fees.

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