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Accounting Firms (accounting + firm)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	75%
Humanities and Social Sciences	12%

Kinds of Accounting Firms

public accounting firm

Selected Abstracts

Production Efficiency and the Pricing of Audit Services,

CONTEMPORARY ACCOUNTING RESEARCH, Issue 1 2003
Nicholas Dopuch
Abstract In this paper, we examine the relative efficiency of audit production by one of the then Big 6 public accounting firms for a sample of 247 geographically dispersed audits of U.S. companies performed in 1989. To test the relative efficiency of audit production, we use both stochastic frontier estimation (SFE) and data envelopment analysis (DEA). A feature of our research is that we also test whether any apparent inefficiencies in production, identified using SFE and DEA, are correlated with audit pricing. That is, do apparent inefficiencies cause the public accounting firm to reduce its unit price (billing rate) per hour of labor utilized on an engagement? With respect to results, we do not find any evidence of relative (within-sample) inefficiencies in the use of partner, manager, senior, or staff labor hours using SFE. This suggests that the SFE model may not be sufficiently powerful to detect inefficiencies, even with our reasonably large sample size. However, we do find apparent inefficiencies using the DEA model. Audits range from about 74 percent to 100 percent relative efficiency in production, while the average audit is produced at about an 88 percent efficiency level, relative to the most efficient audits in the sample. Moreover, the inefficiencies identified using DEA are correlated with the firm's realization rate. That is, average billing rates per hour fall as the amount of inefficiency increases. Our results suggest that there are moderate inefficiencies in the production of many of the subject public accounting firm's audits, and that such inefficiencies are economically costly to the firm. [source]

Ethical evaluations and behavioural intentions of early career accountants: the impact of mentors, peers and individual attributes

ACCOUNTING & FINANCE, Issue 3 2009
Lisa McManus
I20; M40; M41 Abstract This study examined how mentoring support, peer influence and individual attributes of early career accountants (ECA) influence their ethical evaluations and behavioural intentions. Respondents indicate that their evaluation of the seriousness of the ethical conflict is affected by the perceived standard of ethical conduct of their peers, their personal ethical orientation, the extent of ethics education at university, and gender. ECAs' evaluation of a senior colleague's unethical behaviour is affected by mentoring support and the perceived standard of ethical conduct of peers. In terms of ECAs' willingness to contact accounting professional bodies for ethical advice, the size of the accounting firm and the extent of their ethics education at university are significant factors. Furthermore, the likelihood of respondents choosing a more ethical decision is correlated with his or her individual ethical orientation and the extent of ethics education at university. [source]

Group support systems in Hong Kong: an action research project

INFORMATION SYSTEMS JOURNAL, Issue 1 2000
Robert Davison
Abstract. The last dozen years have seen a considerable investment of resources into the research and development of group support systems (GSS) technology. This paper describes how GSS was used to support a process improvement project in a Hong Kong accounting firm. Although the project encountered many difficulties, the application of action research facilitated the adaptation of the GSS to the shifting circumstances, and the project was successfully completed. A variety of lessons concerning the use of GSS are presented, while increased use of action research in complex organizational contexts is recommended. [source]

Auditors' Perceived Business Risk and Audit Fees: Analysis and Evidence

JOURNAL OF ACCOUNTING RESEARCH, Issue 1 2001
Timothy B. Bell
This study analyzes the relation between auditors' perceived business risk and audit fees to determine whether audit firms or their clients bear the expected legal costs of business risk. We predict that hourly audit fees and the number of audit hours are increasing in business risk. Using confidential survey data collected by a large international accounting firm for 422 audits, we find that high business risk increases the number of audit hours, but not the fee per hour. This implies that firms perceive firm-level differences in business risk and obtain compensation through billing additional hours, not by raising the hourly charge. [source]

Determinants of the adoption of sustainability assurance statements: an international investigation

BUSINESS STRATEGY AND THE ENVIRONMENT, Issue 3 2010
Ans Kolk
Abstract This paper explores the factors associated with voluntary decisions to assure social, environmental and sustainability reports. Since the market for assurance services in this area is in its formative stages, there is a limited understanding of the demand for this emergent non-financial auditing practice, which is evolving rapidly across different countries. Drawing from extant literature in international auditing and environmental accounting, we focus on a set of country-level institutional factors to explain the adoption of sustainability assurance statements among an international panel of 212 Fortune Global 250 companies for the years 1999, 2002 and 2005. Consistent with our expectations, our results provide evidence that companies operating in countries that are more stakeholder oriented and have a weaker governance enforcement regime are more likely to adopt a sustainability assurance statement. Further, the demand for assurance is higher in countries where sustainable corporate practices are better enabled by market and institutional mechanisms. Our exploratory findings also indicate that the likelihood of choosing a large accounting firm as assurance provider increases for companies domiciled in countries that are shareholder oriented and have a lower level of litigation. We conclude the paper by suggesting three directions of research in the area of sustainability assurance that have relevant academic and practical implications. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment. [source]

Production Efficiency and the Pricing of Audit Services,

Brand Name Audit Pricing, Industry Specialization, and Leadership Premiums post-Big 8 and Big 6 Mergers,

CONTEMPORARY ACCOUNTING RESEARCH, Issue 1 2002
Andrew Ferguson
Abstract This paper investigates brand name, industry specialization, and leadership audit pricing in the wake of the mergers that created the Big 6 and the Big 5 accounting firms. For samples of Australian listed public companies in each of the postmerger years 1990, 1992, 1994, and 1998, we estimate national audit fee premiums for the Big 6/5 auditors and the industry specialists and leaders. We find limited support for the ability of the Big 6/5 to obtain fee premiums over non-Big 6/5 for those industries not having specialist auditors. Nonspecialist Big 6/5 auditors are able to obtain fee premiums over nonspecialist non-Big 6/5 auditors for those industries having specialist auditors. However, this result only holds among the smaller half of our sample. We do not find strong support for the presence of industry specialist premiums in the postmerger years, especially after 1990, using various definitions of industry specialist. We find, at best, limited support for the presence of industry leadership premiums. The evidence suggests that after the Big 8/6 audit firm mergers, some caution is required in generalizing the Craswell, Francis, and Taylor 1995 finding of national market industry specialist premiums. More generally, the study raises questions about the tenuous link between the concept of specialization and national market-share statistics. [source]

The Impact of Internal Auditor Compensation and Role on External Auditors' Planning Judgments and Decisions,

CONTEMPORARY ACCOUNTING RESEARCH, Issue 2 2001
F. Todd Dezoort
Abstract This paper reports the results of an experiment that investigates how external audit planning is affected when internal auditors have incentives and the opportunity to bias their evaluations. Specifically, we draw on attribution theory to examine how internal auditor eligibility for incentive compensation and participation in consulting (i.e., two factors that provide incentives to bias audit evaluations) affect external audit planning. In addition, we examine the effects of incentive compensation and a consulting role across two routine internal audit tasks , an objective tests of controls task and a subjective inventory valuation task , to evaluate whether their effects are contingent upon task subjectivity (i.e., opportunity to bias audit evaluations). Seventy-six external auditors from four Big 5 public accounting firms participated in an experiment that manipulated internal auditor compensation (fixed salary versus incentive compensation), the type of work that the internal auditors routinely perform (primarily auditing versus primarily consulting), and audit task subjectivity (objective tests of controls versus subjective inventory valuation). Our results suggest that the nature of internal auditors' compensation and work affect audit planning recommendations differently. The opportunity to receive incentive compensation results in less reliance on internal auditors' work and greater budgeted audit hours, but only for the subjective task. Although a consulting role decreases perceived internal auditor objectivity, it has a limited effect on planning recommendations. Specifically, consulting has no effect on reliance, and leads to greater budgeted audit hours only when incentive compensation is available. We discuss potential explanations for the results as well as implications for audit research, practice, and regulation. [source]

Outsourcing and Audit Risk for Internal Audit Services,

CONTEMPORARY ACCOUNTING RESEARCH, Issue 3 2000
DENNIS H. CAPLAN
Abstract Some companies now outsource their internal audit function to public accountants. Internal auditors and accounting firms disagree about the merits of outsourcing. Each type of auditor claims to provide more cost-effective services and appears to claim superior expertise. This paper uses agency theory to examine outsourcing and reconciles the outsourcing debate without resorting to differential auditor expertise. Under the assumptions that public accountants' "deep pockets" provide incentives to outsource and their higher opportunity cost provides a disincentive, we characterize the optimal employment contract with each auditor. We find that public accountants provide higher levels of testing, but possibly for a higher expected fee. This result supports both the internal auditor's claim as the lower cost provider, and the public accountant's claim of higher quality. We also find that incentives to outsource generally increase in various measures of risk, including the risk that a control weakness exists and the size of the loss that can result from an undetected control weakness. [source]

Toward the Development of an Interdisciplinary Information Assurance Curriculum: Knowledge Domains and Skill Sets Required of Information Assurance Professionals,

DECISION SCIENCES JOURNAL OF INNOVATIVE EDUCATION, Issue 1 2008
Casey G. Cegielski
ABSTRACT Since the ratification of the Sarbanes-Oxley Act of 2002, both publicly traded companies and their respective financial statement auditors have struggled to comply with the requirements of the legislation. Utilizing three individual Delphi studies, separately, I surveyed partners, managers, and staff associates in the United States from each of the "Big 4" international accounting firms to ascertain from each respective group what knowledge domains and technical skills are most important in the practice of Sarbanes-Oxley,related information assurance compliance. Analysis of the data collected provided the basis for the development and subsequent implementation of a new interdisciplinary business curriculum in information assurance. [source]

Regrounding the ,Ungrounded Empires':localization as the geographical catalyst for transnationalism

GLOBAL NETWORKS, Issue 2 2001
Yu Zhou
The emerging literature on transnationalism has reshaped the study of immigration in the USA from ,melting pot' and later ,salad bowl', to ,switching board', which emphasizes the ability of migrants to forge and maintain ties to their home countries. Often under the heading of ,transnationalism from below', these studies highlight an alternative form of globalization, in which migrants act as active agents to initiate and structure global interactions. The role of geography, and in particular, localization in transnational spaces, is central to the transnationalism debate, but is yet to be well articulated. While it has been commonly claimed that transnationalism represents deterritorialized practices and organizations, we argue that it is in fact rooted in the territorial division of labour and local community networks in immigrant sending and receiving countries. We examine closely two business sectors engaged in by the Chinese immigrants in Los Angeles: high-tech firms and accounting firms. Each illustrates, respectively, the close ties of Chinese transnational activities with the economic base of the Los Angeles region, and the contribution of local-based, low-wage, small ethnic businesses to the transnational practices. We conclude that deeper localization is the geographical catalyst for transnational networks and practices. [source]

Psychological Characteristics Contributing to Expertise in Audit Judgment

INTERNATIONAL JOURNAL OF AUDITING, Issue 2 2006
Pamela Kent
Prior research has sought a better understanding of the relation between audit expertise and judgment of auditors. The motivation for this study is derived from the need to further understand psychological characteristics contributing to audit expertise. This paper adopts part of a framework derived from the decision-making literature in psychology and applies it to auditing. Shanteau proposes that expert decision makers inherently possess 14 psychological characteristics. The importance of these characteristics is assessed using the perceptions of 55 practising auditors from three national accounting firms in Australia within and across four phases of the audit using a survey instrument. The results indicate that each of the 14 characteristics is important across all four phases of the audit in varying degrees. In addition, the degree of importance varies across characteristics and between audit phases. These findings indicate that psychological characteristics are associated with audit expertise to be applied and tested in future research. [source]

Auditor Detected Misstatements and the Effect of Information Technology

INTERNATIONAL JOURNAL OF AUDITING, Issue 3 2004
William F. Messier Jr.
This paper presents information on the causes and detection of misstatements by auditors and the relationship of those misstatements with information technology (IT). The last major study of misstatements and IT used data that were gathered in 1988. In the intervening period, there have been significant changes in IT, possibly altering the error generation and detection process. Two research questions related to detected misstatements and the effect of IT are examined. The six largest public accounting firms in Norway provided data from 58 engagements. We find that (1) the major causes of misstatements were missing, poorly designed, and improperly applied controls; inadequate methods used to select, train and supervise accounting personnel; and an excessive workload for accounting personnel, (2) missing and poorly designed controls, and excessive workload for accounting personnel were more likely to be causes of misstatements in computerized business processes than those that were not computerized, and (3) the increased use of tests of details over attention directing procedures on audits appears to result from auditors deciding that it is more effective or efficient to conduct such tests than rely upon IT controls. These findings have important implications for both audit practitioners and researchers. [source]

The Influence of Gender, Ethnicity, and Individual Differences on Perceptions of Career Progression in Public Accounting

INTERNATIONAL JOURNAL OF AUDITING, Issue 1 2001
D. Jordan Lowe
Prior research examining gender and diversity issues has generally lacked supporting theory and experimental investigation. This study provides theory-based experimental evidence regarding the effects of gender, ethnicity, and other individual differences on performance evaluations of audit seniors. We utilized organizational socialization theory in examining the accounting profession's view of diversity issues. The process model of performance evaluation provided guidance in the selection of ratee, rater, and contextual characteristics as factors to analyze. An experiment was conducted with 95 audit seniors from one of the Big 5 public accounting firms. Results indicate that gender and ethnic heritage are important factors in the career prospects of audit seniors. The demeanor of an auditor was also important as an interactive factor and influences judgments differently depending on the gender or ethnic origin of the auditor evaluated. These results suggest that diversity is a very complex issue. Examining single factors without considering the interactions of a variety of factors may lead to incorrect conclusions. [source]

The Association between External Monitoring and Earnings Management in the Property-Casualty Insurance Industry

JOURNAL OF ACCOUNTING RESEARCH, Issue 2 2001
Jennifer J. Gaver
This paper examines the association between external monitoring and earnings management by property-casualty insurers. We extend previous work by Petroni and Beasley (1996) by expanding the set of external monitors to include both auditors and actuaries. We investigate whether certain auditor-actuary pairs are associated with less understatement of the loss reserve account by financially struggling insurers. Our data consist of loss adjustments reported by 465 property-casualty insurers for reserves established in 1993. The results indicate that under-reserving by weak insurers is essentially eliminated when the firm uses auditors and actuaries that are both from Big Six accounting firms. In contrast, non-Big Six actuaries have less impact on under-reserving by weak insurers. Our results suggest that the quality usually associated with Big Six auditors falls when the audit firm relies on third party actuaries to evaluate the loss reserve estimates of struggling insurance clients. We conjecture that Big Six actuaries insist on more conservative loss reserve levels because, compared to actuarial consulting firms, they are more attuned to the liability exposure of the auditor. [source]

Was Arthur Andersen Different?

JOURNAL OF EMPIRICAL LEGAL STUDIES, Issue 2 2004
An Empirical Examination of Major Accounting Firm Audits of Large Clients
Enron and other corporate financial scandals focused attention on the accounting industry in general and on Arthur Andersen in particular. Part of the policy response to Enron, the criminal prosecution of Andersen eliminated one of the few major audit firms capable of auditing many large public corporations. This article explores whether Andersen's performance, as measured by frequency of financial restatements, measurably differed from that of other large auditors. Financial restatements trigger significant negative market reactions and their frequency can be viewed as a measure of accounting performance. We analyze the financial restatement activity of approximately 1,000 large public firms from 1997 through 2001. After controlling for client size, region, time, and industry, we find no evidence that Andersen's performance significantly differed from that of other large accounting firms. [source]