Hiring multiple competing audit firms to oversee different parts of the same organization results in higher quality audits and lower fees.
April 1, 2026
Original Paper
One Client, Multiple Auditors: Audit Competition in the Mutual Fund Industry
SSRN · 6409458
The Takeaway
Common business practice favors using a single auditor for 'consistency,' but mutual fund complexes that engage multiple auditors create an internal competition. This structure forces auditors to prove their value and lower their prices to prevent the client from shifting more funds to their rivals.
From the abstract
Mutual funds are a major component of capital markets, with $39 trillion in assets under management representing approximately 32 percent of exchange-traded common equities in the United States. In this industry, a single clientthe mutual fund complexoften engages multiple auditors to audit different funds within the same organization, creating within-client auditor competition. I examine the determinants and consequences of this structure. Fund complex age, size, recent merger activity, and geo