Audit market structure, factors affecting audit fees and audit efforts in Turkey

Ulusoy Tokgöz, Sibel
This study explains the regulatory and competition structure of the audit market in Turkey by exploring types of audit firm, auditor changes and concentration levels in the audit market. The best way to analyse a market structure isto examine through a focus on fee and effort determinants. The association of audit fee and audit effort proxies with various independent variables generally employed in the literature are assessed, taking into account specificfeatures of the Turkish market. The results of teh study highlight that the main drivers of audit fees and audit hours are size of client company, number of consolidated firms in the financial reports of cilent companies, additional services for the all interim periods and type of audit firm (Big Four or not). Additionally, the impact of lowballing is detected in the Turkish setting. Further analysis focusing on audit firm changes enforced by the mandatory rotation period in 2010 supports a negative association between audit fees and change of audit firmrotation policy choice. The negotiation power of large business groups over audit fees is alsoexposed, making a contribution to studies of other emerging countries' audit markets. The study also identifies the importance, especially in the determination of audit effort, of rendering additional, differentiated audit services.
Citation Formats
S. Ulusoy Tokgöz, “Audit market structure, factors affecting audit fees and audit efforts in Turkey,” Ph.D. - Doctoral Program, Middle East Technical University, 2015.