How can features of the markets for audit and nonaudit services (NAS) affect an audit firm's incentives to invest in audit quality, average audit quality, and social welfare? We address these questions in a model focusing on competition in both audit and NAS markets. We show that, when audit and NAS demand are positively correlated, prohibiting auditors from providing NAS to audit clients leads to higher investments in audit quality, but can decrease average audit quality if marginal clients switch to lower quality auditors. The effect on social welfare can be positive or negative, depending on the distribution of clients' service demands. General bans on auditor provision of NAS can, via similar channels, increase or decrease audit quality and social welfare. Overall, our findings suggest a more nuanced view of how regulating an auditor's provision of NAS might affect audit quality and social welfare, and are driven by the effects of multimarket competition on the auditor's incentives to invest in audit quality, rather than previously identified auditor independence or knowledge spillover channels.

中文翻译：

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非审计服务市场的特征如何影响审计市场？

审计和非审计服务 (NAS) 市场的特征如何影响审计事务所投资于审计质量、平均审计质量和社会福利的动机？我们在一个专注于审计和 NAS 市场竞争的模型中解决这些问题。我们表明，当审计和 NAS 需求呈正相关时，禁止审计师向审计客户提供 NAS 会导致对审计质量的更高投资，但如果边缘客户转向质量较低的审计师，则会降低平均审计质量。对社会福利的影响可以是正面的，也可以是负面的，这取决于客户服务需求的分布。普遍禁止审计师提供 NAS 可以通过类似的渠道提高或降低审计质量和社会福利。全面的，