Collusion in Auditing, Collusion ensues when two or more parties that ordinarily compete covertly decide to work together to achieve an advantage. The usual approach is to either curb supplies of goods in order to drive up prices or to set artificially high prices.
Cases of Collusion in Auditing are regularly illegal since they are administered by antitrust laws. The consequence of collusion is that the consumer ends up paying higher prices than would have been the case if there had been an amplified level of competition.
Collusion is hard to coordinate if there are numerous competitors in a marketplace. Therefore, it is most frequently found in oligopoly situations where there are just a few competitors, or where just a few competitors have a maximum market share.