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The consequences of audit firm mobility for attestation services across states.

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Title: The consequences of audit firm mobility for attestation services across states.
Authors: Pan, Pecky Yi1 (AUTHOR), Lee, Gladys1 (AUTHOR), Lin, Yi-Hung1 (AUTHOR) Jerry.Lin@monash.edu
Source: Review of Accounting Studies. Aug2026, p1-44. 44p.
Subject Terms: *Accounting firms, *Economic competition, *Industrial concentration, *Auditing
Abstract: This study investigates how audit firm-level spatial licensing requirements affect audit market competition and audit quality, focusing on small (triennially inspected) audit firms, for which licensing frictions are most relevant. Exploiting the staggered state-level adoption of CPA firm mobility provisions that remove spatial licensing barriers, we find that adoption increases competition among small audit firms, as reflected by lower market concentration and greater first-time entry by small out-of-state auditors. Firm mobility adoption also improves audit quality, as indicated by a lower likelihood of client misstatements. These effects are concentrated in less competitive audit markets and among auditors with higher PCAOB deficiency rates. Audit quality improvements extend to both incumbent auditors and new out-of-state entrants, and we find no evidence of audit fee discounting. Overall, our results suggest that removing spatial licensing barriers fosters a more competitive small audit firm market while improving audit outcomes, without increasing audit costs. [ABSTRACT FROM AUTHOR]
Copyright of Review of Accounting Studies is the property of Springer Nature and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
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  – Url: https://dx.doi.org/doi:10.1007/s11142-026-09989-6
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  Data: The consequences of audit firm mobility for attestation services across states.
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  Data: <searchLink fieldCode="AR" term="%22Pan%2C+Pecky+Yi%22">Pan, Pecky Yi</searchLink><relatesTo>1</relatesTo> (AUTHOR)<br /><searchLink fieldCode="AR" term="%22Lee%2C+Gladys%22">Lee, Gladys</searchLink><relatesTo>1</relatesTo> (AUTHOR)<br /><searchLink fieldCode="AR" term="%22Lin%2C+Yi-Hung%22">Lin, Yi-Hung</searchLink><relatesTo>1</relatesTo> (AUTHOR)<i> Jerry.Lin@monash.edu</i>
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  Data: <searchLink fieldCode="JN" term="%22Review+of+Accounting+Studies%22">Review of Accounting Studies</searchLink>. Aug2026, p1-44. 44p.
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  Data: *<searchLink fieldCode="DE" term="%22Accounting+firms%22">Accounting firms</searchLink><br />*<searchLink fieldCode="DE" term="%22Economic+competition%22">Economic competition</searchLink><br />*<searchLink fieldCode="DE" term="%22Industrial+concentration%22">Industrial concentration</searchLink><br />*<searchLink fieldCode="DE" term="%22Auditing%22">Auditing</searchLink>
– Name: Abstract
  Label: Abstract
  Group: Ab
  Data: This study investigates how audit firm-level spatial licensing requirements affect audit market competition and audit quality, focusing on small (triennially inspected) audit firms, for which licensing frictions are most relevant. Exploiting the staggered state-level adoption of CPA firm mobility provisions that remove spatial licensing barriers, we find that adoption increases competition among small audit firms, as reflected by lower market concentration and greater first-time entry by small out-of-state auditors. Firm mobility adoption also improves audit quality, as indicated by a lower likelihood of client misstatements. These effects are concentrated in less competitive audit markets and among auditors with higher PCAOB deficiency rates. Audit quality improvements extend to both incumbent auditors and new out-of-state entrants, and we find no evidence of audit fee discounting. Overall, our results suggest that removing spatial licensing barriers fosters a more competitive small audit firm market while improving audit outcomes, without increasing audit costs. [ABSTRACT FROM AUTHOR]
– Name: AbstractSuppliedCopyright
  Label:
  Group: Ab
  Data: <i>Copyright of Review of Accounting Studies is the property of Springer Nature and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract.</i> (Copyright applies to all Abstracts.)
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      – SubjectFull: Economic competition
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      – SubjectFull: Industrial concentration
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      – TitleFull: The consequences of audit firm mobility for attestation services across states.
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              Text: Aug2026
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