The Effect of Competition in Audit Market on Investors’ Behavior: An Empirical Study on a Sample of Audit Firms in The Iraqi Environment
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Abstract
This study aims to measure and analyze the level of competition in the Iraqi auditing market and assess the nature of investor behavior and investment trends on the Iraq Stock Exchange in light of the level of competition in the auditing market.
To achieve the study's objectives, a main hypothesis was developed to look at the link between the variables in the study within the practical context. Utilizing evaluation and quantitative mathematical analysis, the research adopted an applied methodology. The annual financial statements of the companies listed on the Iraq Stock Exchange as well as the market official bulletins, were used as data sources for the study during the period of 2017 to 2021.
The study sample primarily consisted of a selection of 26 Iraqi audit offices and firms. These offices and firms were purposefully picked based on the identification and selection of audited companies registered on the Iraq Stock Exchange. The planned sample included 22 joint-stock enterprises. The information gathered from these businesses was used to assess the study variables pertaining to both the audit offices and the enterprises in the sample.
Based on the foregoing, the study reached a set of conclusions, the most prominent of which was the existence of an inverse and non-significant correlation between market competition and investor behavior expressed in trading volume and that it has an unimportant impact on the trading volume of the shares of the audited companies, which indicates that the increase in market competition leads to a decrease in the trading volume of the shares of the audited company. The study also made several recommendations, the most important of which was the need to educate the investor through awareness programs that should focus on the positive and negative effects of the level of competition in the auditing market and its effects on investor behavior and price formation in the market.
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