This paper investigates the degree of market competition in the public accounting industry of Taiwan over the period 1994-2008, using the 'H statistic' proposed by Panzar & Rosse (1987). Differing from previous works, this paper applies a newly developed model, i.e., the censored stochastic frontier (CSF) model, to test whether the audit market has achieved its long-run equilibrium. The model is superior to the conventional model that requires researchers adding a unity to the dependent variable of returns on assets (ROA) for all observations, forcing the transformed dependent variable to be non-negative. One can then take the natural logarithm of this dependent variable. Evidence shows that Taiwan's accounting industry is characterized as monopolistic competition with a trend towards perfect competition. The result will help to build up the empirical model for public accounting industry. The CSF model confirms that this industry is already in a long-run equilibrium in the second half of the sample, which validates the use of the Panzar-Rosse model. Conversely, the employment of the conventional approach leads to a rejection of the long-run equilibrium over the entire sample period.