Measuring the Competition in Audit services Market Through Examination of Audit Fee Stickiness

The purpose of this research is to understand the factors that affect the pricing of audit services and measurement of competition in audit services market through examination of audit fee stickiness. The study helps to explain why the audit fee model does not fully explain the level of audit fees. For this purpose, a sample of 61 companies listed in TSE from 2009 to 2014 is selected. Hypotheses have been examined using panel data and cross-sectional data regression. Research evidence shows that audit fees are sticky. That is, audit fees do not immediately or fully adjust to changes in their determinants. Furthermore, audit fees also respond to changes leading to an increase more quickly than they respond to changes leading to a decrease. This means that audit clients respond less to the increase in the amount of audit fee. These results indicate that Audit services market in Iran is Non-competitive and is not determined on the basis of all available information.