Entry barriers, concentration and competition in the Spanish audit market

The high audit market concentration combined with the high entry barriers has caused concern among regulators and market participants due to the adverse effects on the level of audit market competition. This study is the first to provide evidence on the dynamics of the Spanish audit market competition using mobility indicators. We analyze the relationship of the entry barriers and the level of audit market concentration with the level of competition. Results show that despite the reduction the number of the audit firms, they engage in a high level of competition. Additionally, we found the high entry barriers to be the factor which exert a negative influence on the degree of competition. Contrary to the concerns of the competition authorities, the concentration level is not significant.