Using labor supply shocks from the 150-Hour Rule, I find that a reduction in the labor supply of accountants increases audit firms' mergers and acquisitions (M&A) and the audit market concentration. These M&A deals connect audit firms serving clients in the same states and lead to greater industry specialization of the merging firms. Although both small and large auditors generally engage in labor supply–driven M&A deals, large audit firms’ engagement in M&A is restricted to markets with a tight supply of accounting labor. Attenuations of the labor supply restrictions tend to limit the heightened M&A activities and mitigate the rise in the audit-market concentration from the 150-Hour Rule. I conclude that labor supply reductions affect the boundaries of audit firms, potentially changing the structure of the entire audit market.

中文翻译：

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审计市场的劳动力供给与并购


利用 150 小时规则带来的劳动力供给冲击，我发现会计师劳动力供给的减少会增加审计公司的并购（M&A）和审计市场的集中度。这些并购交易将服务于同一州客户的审计公司联系起来，并导致合并公司更加专业化。尽管小型和大型审计师通常都会参与劳动力供应驱动的并购交易，但大型审计公司参与并购仅限于会计劳动力供应紧张的市场。劳动力供应限制的减弱往往会限制并购活动的加剧，并缓解 150 小时规则导致的审计市场集中度的上升。我的结论是，劳动力供应的减少影响了审计公司的边界，可能会改变整个审计市场的结构。