Clients' Homogeneity?Industry Specialization And Audit Market Concentration

In recent years,the industry specialization strategy has been recognized by the audit market as an effective competition strategy.Firm which has implemented of specific industry invest a lot of auditing resources,to make the auditor in this industry to fully understand the industry status and industry environment,and at the time of audit in the industry can targetedly implement the audit procedures,improve the quality of audit.The high quality service once recognized by the customer,the customer who need the high quality based on the financial statements of information demand will tend to choose firm which implement audit industry specialization strategy,so that the firm which not carried out the strategy of industry specialization will be excluded outside of the market,and audit market concentration will increase.Based on the sample of a-share listed companies from 2011 to 2015,this paper studies the influence of accounting firm's implementation of industry specialization strategy on the concentration degree of industry audit market The results show that the industry specialization strategy can improve the concentration of industry audit market.In addition,we have studied the influence of the nature of customer industry on relationship between the market competition and the industry specialization.When customer industry are high homogeneity,industry customers' business activities will be highly similar,so that the auditor audit in the industry holded the accumulation of experience can be applied to multiple clients,and audit experience and audit technology sharing between customers in the industry can reduce the industry average cost.And low cost to implement industry specialization in market competition while maintaining the high audit quality has the opportunity to reduce audit fees to attract customers,expulsion of audit fees in either high or low audit quality of the firm,to further improve the industry concentration of audit market.Our results show that when the customer is a homogeneity industry,the influence of the industry specialization strategy on the audit market concentration will be further intensified.This conclusion provides guidance on how to implement industry specialization strategy to gain market competitive advantage.