Summary
This document is a study commissioned by Mazars Germany, conducted by Düsseldorf Competition Economics GmbH, focusing on options for reforming the audit market. It outlines the current challenges faced in the German audit market, particularly the high concentration of audit firms, which limits effective competition and threatens audit quality. The study discusses the implications of the Financial Market Integrity Strengthening Act and the Corporate Sustainability Reporting Directive, emphasizing that while these measures aim to improve transparency and integrity, they may inadvertently reinforce market concentration. The authors propose a new market design that includes mandatory joint audits and a Choice & Quality Framework to enhance competition and audit quality. This design aims to ensure that audit services are provided by multiple firms, thereby increasing accountability and improving the overall standard of audits. The document also addresses the need for regulatory adaptations and market transparency to support this new framework, ultimately aiming to restore confidence in the audit process and financial markets.
