Companies listed on the Jamaica Stock Exchange (JSE) are required to submit audited financial statements to the JSE at scheduled intervals. To meet this requirement, companies engage the services of auditing firms. The term “Big 4” has been used to characterize the top four leading auditing firms. Internationally during 2019, Deloitte was the largest auditing firm, followed by PricewaterhouseCoopers then Ernst & Young and KPMG.
Audit services markets are typically highly concentrated. The more concentrated a market is, the greater the opportunity for the auditors to exercise market power individually or by collaborating with each other. To counter this potential harm to their consumers (‘clients’), competition authorities in some jurisdictions monitor the audit services market for signs of coordinated or unilateral conduct.
The study examines auditing services provided to clients listed on the main and junior markets of the JSE during the period 2013-2018. This study provides an overview of the state of competition in the market for auditing services in Jamaica- focusing on trends in market concentration. Further analysis was done at the individual firm level and the industry level to determine industry-specific interactions between the Big 2 and other auditors.