Search results

1 – 10 of over 120000
Article
Publication date: 31 August 2012

Magdy S. Farag and Rafik Z. Elias

The purpose of this study is to examine the impact of public accounting firms' mix of service revenue on their average productivity measured by total revenue per partner.

2002

Abstract

Purpose

The purpose of this study is to examine the impact of public accounting firms' mix of service revenue on their average productivity measured by total revenue per partner.

Design/methodology/approach

Using data from Public Accounting Report on top public accounting firms by revenue, an OLS regression model is applied by regressing revenue per partner on the percentage of revenue generated from auditing and attest, tax, management consulting, and other services independently.

Findings

Results show that the proportion of auditing and attest service revenue is negatively associated with public accounting firms' productivity. However, the proportion of other services revenue, other than tax and management consulting services, is positively associated with productivity. Additional investigation shows that if public accounting firms provide other services in their mix of services, then tax and management consulting services do not contribute to these public accounting firms' productivity.

Research limitations/implications

Results of this study cannot be generalized beyond the top 100 public accounting firms, and the measurement of revenue per partner ignores the exact number of partners within different service areas.

Practical implications

Although auditing and attest services are considered core services of public accounting firms, they do not increase the productivity of the firm.

Originality/value

This study helps in assessing whether average productivity of public accounting firms is affected by the proportion of a specific type of service in the post‐SOX era.

Details

Managerial Auditing Journal, vol. 27 no. 8
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 1 June 2005

Venkataraman M. Iyer, K. Raghunandan and Dasaratha V. Rama

To examine if there are systematic gender‐based differences in the perceptions of accounting firm alumni about their experiences with accounting firms.

1703

Abstract

Purpose

To examine if there are systematic gender‐based differences in the perceptions of accounting firm alumni about their experiences with accounting firms.

Design/methodology/approach

Alumni of Big 4 firms' offices in two large cities in the USA are surveyed. The analysis is based on responses from 110 alumni who had left the firm within the previous ten years.

Findings

Results indicate that women are less likely than men to believe that their former accounting firms developed their abilities to think and express themselves; helped them learn to manage others; and trained them for their present job. Further, women rated the training, personnel evaluation, and counseling programs at their former accounting firms lower than did men. Women were less likely to recommend their former firm to friends and acquaintances, and less likely to inform the former accounting firm about opportunities or pitfalls.

Research limitations/implications

Limitations associated with survey research such as non‐response bias must be taken into account.

Practical implications

The results suggest that more efforts are needed to bridge the gender gap in the public accounting profession.

Originality/value

This study is one of the few that have examined alumni's perceptions about their former firm.

Details

Managerial Auditing Journal, vol. 20 no. 5
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 6 January 2006

Mazni Abdullah and Zamzulaila Zakaria

This study is conducted to identify which attributes that are considered important by accounting students of University of Malaya and International Islamic University of…

Abstract

This study is conducted to identify which attributes that are considered important by accounting students of University of Malaya and International Islamic University of Malaysia in the job selection process. The questionnaires which lists the attributes of public accounting firms are distributed to the accounting students and they were asked to rate each attribute on a 5 point Likert scale. The students’ demographic profile and their academic achievements (CGPA) are also analysed to determine their relationships with the preference in the subjects’ job selection. It is found that the students rank opportunity and advancement as the most important attributes followed by office atmosphere/friendliness of staff and firms’ training programme. The findings from this study might assist public accounting firms in developing policies that might attract more quality recruits. They can also be used by institutions of higher learning to give more appropriate career advice to students who are seeking for their first accounting job.

Details

Journal of Financial Reporting and Accounting, vol. 4 no. 1
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 1 July 2004

Steven C. Hall and Laurie S. Swinney

Prior research provides evidence that firms make accounting choices to avoid violation of debt covenant provisions and the resulting costs of technical default. We extend…

1131

Abstract

Prior research provides evidence that firms make accounting choices to avoid violation of debt covenant provisions and the resulting costs of technical default. We extend this research by asking why some firms refrain from making accounting policy changes when faced with costs of technical default. We considered two possible explanations. First, we hypothesise that these defaulting firms may lack the flexibility to make accounting changes. Second, we hypothesise that these defaulting firms may lack incentive to change accounting methods. Results confirm prior research and indicate that defaulting firms make more accounting changes than non‐defaulting firms. The decision by defaulting firms to change or not change accounting methods during the three years ending in the year of a technical default of debt covenants can be explained in part by the ability of the firm and by the incentives of the firm to make a change.

Details

Management Research News, vol. 27 no. 7
Type: Research Article
ISSN: 0140-9174

Keywords

Article
Publication date: 1 April 2005

Christie L. Comunale and Thomas R. Sexton

To explore the effects of mandatory auditor rotation and retention on the long‐term market shares of the accounting firms that audit the members of the Standard and Poor's…

3581

Abstract

Purpose

To explore the effects of mandatory auditor rotation and retention on the long‐term market shares of the accounting firms that audit the members of the Standard and Poor's (S&P) 500.

Design/methodology/approach

A Markov model is constructed that depicts the movements of S&P 500 firms in the period 1995 to 1999 among Big 5 accounting firms. Auditor rotation and retention are reflected in the transition probabilities. The impacts of mandatory auditor rotation and retention policies are evaluated by examining the state probabilities after two, five, and nine years.

Findings

The paper finds that mandatory auditor rotation will have substantial effects on long‐term market shares, whereas mandatory auditor retention will have very small effects. It shows that a firm's ability to attract new clients, as opposed to retaining current clients, will be the primary factor in determining the firm's long‐term market share under mandatory auditor rotation.

Research limitations/implications

The paper assumes that S&P 500 firms will continue their reliance on Big 5 firms and that the estimated transition probabilities will remain stable over time.

Practical implications

Excessive market share concentration resulting from such policies should not be a concern of regulators. The paper conjectures that, under mandatory rotation, accounting firms will reallocate resources to attract new clients rather than retain existing clients. This may result in lower audit quality.

Originality/value

Interestingly, over the past 25 years, several bodies have considered mandatory auditor rotation and retention. Surprisingly, the authors have found no studies of the effects of mandatory auditor rotation and retention on audit market share.

Details

Managerial Auditing Journal, vol. 20 no. 3
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 13 September 2022

Shungen Luo and Fei Song

This study tests the effect of accounting standards precision on financial restatements and the influence of accounting standards precision on different types of…

Abstract

Purpose

This study tests the effect of accounting standards precision on financial restatements and the influence of accounting standards precision on different types of restatements (including errors and irregularities). What is more, the heterogeneity between accounting standards precision and financial restatements is verified in this paper. In the further analyses, the authors also examine the mediating roles and moderating roles on the correlation between accounting standards precision and financial restatements.

Design/methodology/approach

The focus is placed on an unbalanced panel of 18,766 samples over the period of 2007–2017.

Findings

The authors find that firms' restatements decrease when standards are more principles-based (low accounting standards precision). Especially, irregularities significantly decrease when firms' standards are more principles-based. What's more, the negative relationship between principles-based standards and restatements is more significant in “big four” accounting firms. Moreover, from the mediating effect results, the authors find that low accounting standards precision decreases a firm's financial reporting complexity and increases equity restriction, which in turn can help decreasing its financial misreporting. From the moderating effect results, the authors find that the higher the TOP1 and the more analysts following the firm, the higher the benefit of accounting standards precision to misstatements.

Originality/value

The results of this study provide a theoretical reference for accounting standard setters and are helpful to inform investors and regulators about the influence of Chinese accounting standards on restatements.

Details

Asian Review of Accounting, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1321-7348

Keywords

Book part
Publication date: 17 December 2005

Patricia H. Thornton, Candace Jones and Kenneth Kury

We contribute to the literature on institutional and organizational change by integrating two related areas of study: the theory and methods of analysis informed by the…

Abstract

We contribute to the literature on institutional and organizational change by integrating two related areas of study: the theory and methods of analysis informed by the research on institutional logics and historical-event sequencing. Institutional logics provide the theory to understand how the content of culture influences organizational change; historical-event sequencing reveals the underlying patterns of cultural transformation. We apply this dual perspective to the cases of institutional stability and change in organizational governance in three industries: accounting, architecture, and higher-education publishing. Research on governance has focused on changes in organizational design between markets, hierarchies, and networks. Missing from this research is an understanding of how institutions at the wider societal level motivate organizations to adopt one of these governance forms over another. We examine how the governance of firms in these industries has been influenced by the institutional logics of the professions, the market, the state, and the corporation by focusing on three mechanisms – institutional entrepreneurs, structural overlap, and historical-event sequencing. Overall, our findings reveal how accounting was influenced by state regulation producing a punctuated equilibrium model, architecture by professional duality producing a cyclical model, and publishing by market rationalization producing an evolutionary model of institutional change in organizational governance.

Details

Transformation in Cultural Industries
Type: Book
ISBN: 978-1-84950-365-5

Book part
Publication date: 26 June 2006

Namrata Malhotra, Timothy Morris and C.R. (Bob) Hinings

This chapter examines the sources of variation in organizational form among accounting and law firms. We first summarize research in the organization of professional…

Abstract

This chapter examines the sources of variation in organizational form among accounting and law firms. We first summarize research in the organization of professional service firms and explain its evolution. This is followed by the argument that variations around the P2 archetype have emerged in response to different market and institutional pressures faced by accounting and law firms. Drawing on contingency and institutional theory, we show how the changing balance between the influence of market and institutional factors has resulted in structural variation.

Details

Professional Service Firms
Type: Book
ISBN: 978-0-76231-302-0

Article
Publication date: 22 October 2021

Abdulbaset Ab Klish, Moade Fawzi Shaker Shubita and Junjie Wu

Global interest in adopting the International Financial Reporting Standards (IFRS) has risen rapidly; however, the Middle Eastern and North African (MENA) countries have…

Abstract

Purpose

Global interest in adopting the International Financial Reporting Standards (IFRS) has risen rapidly; however, the Middle Eastern and North African (MENA) countries have reacted differently towards the international diffusion. The purpose of this study is to examine the impact of the IFRS adoption/rejection decision on the quality of MENA region firms' financial reporting.

Design/methodology/approach

The quality of accounting is examined through five metrics models to measure earnings smoothing, managing earnings towards a target and timely loss recognition. The research sample consists of nine countries over a period of ten years (2006–2015), resulting in 3,040 firm-year observations in the main phase, and 2,580 firm-year observations in the additional analysis.

Findings

The findings reveal that the overall sample of IFRS adopters in the MENA region has benefited from the adoption of IFRS, as the results show that there is a reduction in earnings management for IFRS adopters in comparison to local standards adopters. The sub-sample analyses also reveal that firms that adopted IFRS, in both the rentier (oil-dependent states) and non-rentier states, have a higher financial reporting quality than non-IFRS adopters. However, the magnitude of the financial reporting quality was higher for IFRS adopters in rentier states.

Research limitations/implications

Similarly to previous research in this field, this study adopts a strict sample selection approach. Such an approach may limit the sample size, although the researchers have taken every possible step to ensure the use of an adequate sample size. The researchers acknowledge the strict period of ten years, despite having stated its rationale and importance of a more extended period to the quest of the paper.

Practical implications

This research provides valuable input by evaluating the current status of MENA region firms' financial reporting quality, based on their followed accounting regime. The implications of this paper result in better-informed decisions for investors as the information contents of the annual reports enhance comparisons that facilitate the further flow of investments. This research also provides significant insight into the International Accounting Standards Board (IASB). The findings of this study will assist the IASB in understanding the MENA region by measuring the consequences of the countries' decisions on the quality of firms' financial reporting.

Originality/value

The findings of this study contribute to the literature by revealing that countries with medium levels of governance quality have benefited the most from the IFRS adoption, while IFRS adopters in countries with stronger governance quality demonstrate lower financial reporting quality.

Details

Journal of Applied Accounting Research, vol. 23 no. 3
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 22 October 2021

Maria Cadiz Dyball and Ravi Seethamraju

The paper reports on a study that investigated the (potential) impact of client use of blockchain technology on financial statement audits of Australian accounting firms.

Abstract

Purpose

The paper reports on a study that investigated the (potential) impact of client use of blockchain technology on financial statement audits of Australian accounting firms.

Design/methodology/approach

Data were primarily collected from semi-structured interviews with a range of stakeholders including audit partners from first- and second-tier accounting firms in Australia. The interviews focused on the perceived (potential) impact of blockchain on the stages of obtain (retain) engagement, engagement planning, risk assessment, audit evidence and reporting of financial statement audits of clients that use blockchain technology. Perceptions of changes to financial statement audits were interpreted using the logics of professionalism and commercialism.

Findings

Australian accounting firms have either obtained or considered engagements with clients with a cryptocurrency business or that use a blockchain platform although they are a small group. There is a view that blockchain technology is distinctive and therefore poses risks not encountered before in audit engagements. These risks would most likely shift how firms plan, design audit methodologies and execute financial statement audits. The study showed that the logics of professionalism and commercialism are not conflicting but instead complementary. They present both opportunities and challenges for firms to apply and develop audit expertise in an emerging area in audit.

Research limitations/implications

Being an exploratory study, the findings are tentative. A case study of an audit engagement with a cryptocurrency business will add to a nuanced understanding of the challenges posed to financial statement audits by blockchain technology.

Originality/value

This study is novel because of its focus on the impact of an evolving technology on the stages of financial statement audits.

Details

Accounting, Auditing & Accountability Journal, vol. 35 no. 7
Type: Research Article
ISSN: 0951-3574

Keywords

1 – 10 of over 120000