The Relationship between Intellectual Capital Components and Audit Market Competition

The present study aims to assess the relationship between intellectual capital and competition in the audit market.The audit market concentration index is used to measure competition in the audit market, calculated according to three auditor concentration indices, client concentration and competitio...

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Main Authors: Mozhgan Khodadadi, Fariba Darrodi
Format: Article
Language:English
Published: Ferdowsi University of Mashhad 2020-05-01
Series:Iranian Journal of Accounting, Auditing & Finance
Subjects:
Online Access:https://ijaaf.um.ac.ir/article_39282_c8491a670377495e8c3ab6b0d6f36670.pdf
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author Mozhgan Khodadadi
Fariba Darrodi
author_facet Mozhgan Khodadadi
Fariba Darrodi
author_sort Mozhgan Khodadadi
collection DOAJ
description The present study aims to assess the relationship between intellectual capital and competition in the audit market.The audit market concentration index is used to measure competition in the audit market, calculated according to three auditor concentration indices, client concentration and competition pressure. The study period is from 2013 to 2017, during which 705 firm-years is selected among the listed firms on the Tehran Stock Exchange as the sample of the study and is tested using the panel method.The results indicate a negative and significant relationship between human, structural, and relational capital and auditor concentration. There is a positive and meaningful relationship between relational and structural capital and client concentration and a negative and significant relationship between human capital and client concentration. Furthermore, the relationship between structural and relational capital and competition pressure of rivals is positive and meaningful. The relationship between human capital and the competition pressure of competitors is negative and significant.This paper enables the firms to lower their auditors' fees by employing exert and experienced people in making the best use of intellectual capital. This paper also causes the wise people to benefit from all production capacities of the firm. It enhances products' sales to increase the competition in the audit market and sometimes lower clients' costs for audit fees.
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publishDate 2020-05-01
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spelling doaj-art-276d5ebe92a34514abdd0ffde724d2942025-08-20T02:00:09ZengFerdowsi University of MashhadIranian Journal of Accounting, Auditing & Finance2717-41312588-61422020-05-0142678410.22067/ijaaf.2020.3928239282The Relationship between Intellectual Capital Components and Audit Market CompetitionMozhgan Khodadadi0Fariba Darrodi1Department of Economics and Administrative Sciences, Attar Institute of Higher Education, Mashhad, IranDepartment of Economics and Administrative Sciences, Attar Institute of Higher Education, Mashhad, IranThe present study aims to assess the relationship between intellectual capital and competition in the audit market.The audit market concentration index is used to measure competition in the audit market, calculated according to three auditor concentration indices, client concentration and competition pressure. The study period is from 2013 to 2017, during which 705 firm-years is selected among the listed firms on the Tehran Stock Exchange as the sample of the study and is tested using the panel method.The results indicate a negative and significant relationship between human, structural, and relational capital and auditor concentration. There is a positive and meaningful relationship between relational and structural capital and client concentration and a negative and significant relationship between human capital and client concentration. Furthermore, the relationship between structural and relational capital and competition pressure of rivals is positive and meaningful. The relationship between human capital and the competition pressure of competitors is negative and significant.This paper enables the firms to lower their auditors' fees by employing exert and experienced people in making the best use of intellectual capital. This paper also causes the wise people to benefit from all production capacities of the firm. It enhances products' sales to increase the competition in the audit market and sometimes lower clients' costs for audit fees.https://ijaaf.um.ac.ir/article_39282_c8491a670377495e8c3ab6b0d6f36670.pdfintellectual capitalaudit market concentrationhuman capitalstructural capitalrelational capital
spellingShingle Mozhgan Khodadadi
Fariba Darrodi
The Relationship between Intellectual Capital Components and Audit Market Competition
Iranian Journal of Accounting, Auditing & Finance
intellectual capital
audit market concentration
human capital
structural capital
relational capital
title The Relationship between Intellectual Capital Components and Audit Market Competition
title_full The Relationship between Intellectual Capital Components and Audit Market Competition
title_fullStr The Relationship between Intellectual Capital Components and Audit Market Competition
title_full_unstemmed The Relationship between Intellectual Capital Components and Audit Market Competition
title_short The Relationship between Intellectual Capital Components and Audit Market Competition
title_sort relationship between intellectual capital components and audit market competition
topic intellectual capital
audit market concentration
human capital
structural capital
relational capital
url https://ijaaf.um.ac.ir/article_39282_c8491a670377495e8c3ab6b0d6f36670.pdf
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