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Article
Publication date: 1 November 2003

Shah Jalal Sarker, Alf Crossman and Parkpoom Chinmeteepituck

Earlier studies suggest age is positively associated with job satisfaction, while others use length of service, or tenure, as a predictor of job satisfaction levels. This…

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Abstract

Earlier studies suggest age is positively associated with job satisfaction, while others use length of service, or tenure, as a predictor of job satisfaction levels. This article examines whether age and tenure are individual determinants of satisfaction, or whether there is an interaction between the two. The results indicate that employee age is not significantly associated with overall job satisfaction level, but that tenure is. There is also significant relationship between tenure and facets of satisfaction (job, pay and fringe benefits), but the effect of tenure on satisfaction is significantly modified by age.

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Journal of Managerial Psychology, vol. 18 no. 7
Type: Research Article
ISSN: 0268-3946

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Article
Publication date: 20 October 2021

Rachana Kalelkar and Qiao Xu

The authors investigate whether the different tenure phases of executives have a differential effect on audit pricing. Two alternate views – career concern and power – can…

Abstract

Purpose

The authors investigate whether the different tenure phases of executives have a differential effect on audit pricing. Two alternate views – career concern and power – can explain the effect of executives’ tenure on audit pricing. This paper aims to determine, which viewpoint dominates in explaining the relationship between audit pricing and executive tenure phases.

Design/methodology/approach

Using a sample of 11,198 firm-year observations from 2007 to 2016, the authors adopt an ordinary least squares regression model to assess the impact of the middle and long phases of executives’ tenure on audit fees.

Findings

Audit fees are significantly lower when executives enter the middle and long phases of tenure. The reduction in audit fees is greatest as both chief executive officers and chief financial officers enter the long tenure phase. Although audit fees gradually decrease as executive tenure is extended, they start increasing two years before the end of executive tenure. Furthermore, the negative association between the executive tenure phase and audit fees is greater when the executive is appointed externally. Finally, the long phase of executive tenure also mitigates the positive relationship between audit fees and internal control weaknesses.

Research limitations/implications

This study is based on US data. Future research may extend this study to other countries.

Practical implications

The findings are important to firms, practitioners and academicians, particularly, as the length of tenure of top executives has increased in recent years. By documenting that executives’ middle and long tenure phases reduce audit fees, the findings highlight the importance of maintaining executives in the firm. Finally, the findings have implications for investors, policymakers and auditors to identify companies with high audit risk.

Originality/value

This study is the first to document the impact of executives’ middle and long tenure phases on audit fees.

Details

Review of Accounting and Finance, vol. 20 no. 5
Type: Research Article
ISSN: 1475-7702

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Article
Publication date: 17 August 2021

Qiliang Liu, Lei Zhao, Li Tian and Jian Xie

This paper aims to investigate whether close auditor-client relationships affect audit quality over the tenure of the audit partner and the potential role of partner…

Abstract

Purpose

This paper aims to investigate whether close auditor-client relationships affect audit quality over the tenure of the audit partner and the potential role of partner rotation in mitigating this effect.

Design/methodology/approach

Using the Chinese mandatory audit partner rotation setting, the authors identify the existence of a close auditor-client relationship if the audit partner tenure with a client is larger than the audit firm tenure with that client. The sample period (1998–2009) is divided into voluntary and mandatory rotation periods when examining the effects of audit partner tenure on audit quality for the normal and close auditor-client relationship subsamples, respectively. The authors also conduct a propensity score matching analysis to address a selection issue.

Findings

The paper finds that under the voluntary partner rotation regime, audit quality decreases with audit partner tenure for the subsample with close auditor-client relationships, whereas this effect is not shown in the normal relationship subsample. However, audit quality no longer declines with audit partner tenure under the mandatory partner rotation regime.

Originality/value

This is the first study that directly examines the effect of audit partner tenure on audit quality associated with close auditor-client relationships under the voluntary and mandatory partner rotation regimes.

Details

Managerial Auditing Journal, vol. 36 no. 6
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 3 August 2021

Nemiraja Jadiyappa, L. Emily Hickman, Ram Kumar Kakani and Qambar Abidi

The Indian Companies Act 2013 mandated auditor rotations in the financial year 2018–2019. Similar regulations are being considered in many countries, based on the…

Abstract

Purpose

The Indian Companies Act 2013 mandated auditor rotations in the financial year 2018–2019. Similar regulations are being considered in many countries, based on the assumption that longer tenure is detrimental to audit quality; yet, the evidence from investigations of this assumption is inconclusive. This paper aims to examine the effect of moderating factors on the relation between audit quality and audit tenure, given the regulatory trend and the lack of consensus in extant literature.

Design/methodology/approach

This paper examines the relationship between audit quality and audit tenure among Indian firms from 2001 to 2015 and tests for moderating factors including auditor compensation, business group affiliation and chief executive officer (CEO) duality.

Findings

Contrary to the objective of mandatory rotations, this study finds that longer auditor tenure generally enhanced audit quality among Indian firms prior to mandatory rotations. However, for companies paying abnormally high compensation to auditors, this paper finds that longer tenure decreases audit quality, particularly if the firm is affiliated with a business group or firms where the CEO also serves as the board chair. Thus, the potential benefits of mandated shorter tenure appear to be confined to high-fee paying companies with a business group affiliation and/or a dual-role CEO.

Originality/value

This study is one of the first to examine conditioning factors that affect the relationship between audit quality and auditor tenure. Results suggest that regulations limiting auditor tenure would be beneficial only to the shareholders of a narrow group of firms; while for the majority of firms, limiting auditor tenure may actually be counter-productive.

Details

Managerial Auditing Journal, vol. 36 no. 5
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 30 August 2021

Osama F. Atayah, Khakan Najaf, Ravichandran K. Subramaniam and Phaik Nie Chin

This study aims to investigate the implication of top executives’ number of years of experience (tenure) on corporate risk-taking behaviour and corporate performance in…

Abstract

Purpose

This study aims to investigate the implication of top executives’ number of years of experience (tenure) on corporate risk-taking behaviour and corporate performance in Malaysian corporations.

Design/methodology/approach

To test the hypothesis efficiently, the authors have extracted the data from Bloomberg for 788 listed companies of the Malaysian Stock Exchange. The methodology entails ordinary least squares regressions, quantile regression and dynamic system generalized method of moments model.

Findings

First, the authors show that executive management tenure has a significant negative relationship with corporate risk-taking. It means that the long-tenured executives tend to undertake less risky strategies and decisions. Second, this study reveals that the longer executive management tenure has a positive relationship with corporate performance. Third, the moderating effect of corporate risk-taking with executive tenure (Tenure dummy*Risk) has a negative relationship with the corporate performance by 1%.

Practical implications

It implies that the appointment of experienced executive management contributes towards corporate performance directly. However, experienced management trends take less risk, which eventually results in mitigating the corporate performance. On that basis, the findings are significant in highlighting the usefulness of executive leadership term and offers insights to academics, practitioners and policymakers.

Originality/value

This paper is novel since it is unique in evaluating the executive tenure and the preferences to handle risk strategies and how that impact the firm performance.

Details

Asia-Pacific Journal of Business Administration, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1757-4323

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Article
Publication date: 16 August 2021

Khairul Anuar Kamarudin, Wan Adibah Wan Ismail and Akmalia M. Ariff

This study aims to investigate whether auditor tenure has a significant influence on accounting quality and whether investor protection moderates the effect of auditor…

Abstract

Purpose

This study aims to investigate whether auditor tenure has a significant influence on accounting quality and whether investor protection moderates the effect of auditor tenure on accounting quality.

Design/methodology/approach

This study uses weighted least squares regression on a sample of 77,855 firm-year observations from 36 countries during the period 2010–2016. This study uses the absolute value of performance-matched discretionary accruals to measure financial reporting quality.

Findings

This study finds that a longer auditor tenure is associated with higher accounting quality, thus supporting the knowledge effect arguments. The results on the joint effect of investor protection and auditor tenure show evidence of the substitutive effect of investor protection, where the positive impact of auditor tenure on accounting quality is weaker in a high investor-protection environment.

Practical implications

These findings provide input for policy implications involving the auditing profession. Regulators may need to weigh the costs and benefits of mandatory audit rotation because country-level institutional factors influence auditing regulations and practices, as well as the auditors’ behaviors.

Originality/value

This study adds to the limited, albeit important, evidence on the joint effect of auditor tenure and country-level governance on accounting quality. The authors respond to the call by Brooks et al. (2017) for more evidence on the role of audits on financial reporting outcomes across various legal institutions for creating effective policies.

Details

Accounting Research Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1030-9616

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Book part
Publication date: 29 January 2018

Huat Bin (Andy) Ang and Arch G. Woodside

This study applies asymmetric rather than conventional symmetric analysis to advance theory in occupational psychology. The study applies systematic case-based analyses to…

Abstract

This study applies asymmetric rather than conventional symmetric analysis to advance theory in occupational psychology. The study applies systematic case-based analyses to model complex relations among conditions (i.e., configurations of high and low scores for variables) in terms of set memberships of managers. The study uses Boolean algebra to identify configurations (i.e., recipes) reflecting complex conditions sufficient for the occurrence of outcomes of interest (e.g., high versus low financial job stress, job strain, and job satisfaction). The study applies complexity theory tenets to offer a nuanced perspective concerning the occurrence of contrarian cases – for example, in identifying different cases (e.g., managers) with high membership scores in a variable (e.g., core self-evaluation) who have low job satisfaction scores and when different cases with low membership scores in the same variable have high job satisfaction. In a large-scale empirical study of managers (n = 928) in four (contextual) segments of the farm industry in New Zealand, this study tests the fit and predictive validities of set membership configurations for simple and complex antecedent conditions that indicate high/low core self-evaluations, job stress, and high/low job satisfaction. The findings support the conclusion that complexity theory in combination with configural analysis offers useful insights for explaining nuances in the causes and outcomes to high stress as well as low stress among farm managers. Some findings support and some are contrary to symmetric relationship findings (i.e., highly significant correlations that support main effect hypotheses).

Details

Improving the Marriage of Modeling and Theory for Accurate Forecasts of Outcomes
Type: Book
ISBN: 978-1-78635-122-7

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Book part
Publication date: 6 September 2016

Elizabeth Dreike Almer, Amelia A. Baldwin, Allison Jones-Farmer, Margaret Lightbody and Louise E. Single

To understand the reasons that accounting academics leave the tenure-track academic pipeline.

Abstract

Purpose

To understand the reasons that accounting academics leave the tenure-track academic pipeline.

Design/methodology/approach

Survey study was conducted of PhD graduates who left the tenure-track accounting pipeline over a 22-year period.

Findings

We located and surveyed accounting PhD graduates who have opted out of the tenure-track. These opt-outs included those who have left academia entirely and those who have moved into non-tenure-track positions. Survey results indicate that dissatisfaction with research expectations is the most significant factor for faculty now employed in non-tenure-track positions. Although there were no gender-related differences in the number of faculty who left the tenure-track but stayed in academia, there were some gender differences in the importance of family-related factors in motivating the move off of the tenure-track.

Research limitations/implications

The study examines the importance of the “push” and “pull” factors associated with changing career paths in academia that have been identified in the literature. The study finds some differences in influential factors between accounting academia and other fields. Sample size is a potential limitation.

Practical implications

The study provides recommendations for PhD program directors and for hiring institutions to help reduce the number of opt-outs.

Social implications

Retention of qualified faculty who are dedicated teachers improves students’ educational outcomes.

Originality/value

This is the first study to examine factors that drive accounting academics to opt-out of the tenure-track.

Details

Advances in Accounting Education: Teaching and Curriculum Innovations
Type: Book
ISBN: 978-1-78560-969-5

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Book part
Publication date: 11 August 2014

John G. Sessions and Nikolaos Theodoropoulos

Efficiency wage theory predicts that firms can induce worker effort by the carrot of high wages and/or the stick of monitoring worker performance. Another option available…

Abstract

Efficiency wage theory predicts that firms can induce worker effort by the carrot of high wages and/or the stick of monitoring worker performance. Another option available to firms is to tilt the remuneration package over time such that the lure of high future earnings acts as a deterrent to current shirking. On the assumption that firms strive for the optimal trade-off between these various instruments, we develop a two-period model of efficiency wages in which increased monitoring attenuates the gradient of the wage-tenure profile. Our empirical analysis, using two cross sections of matched employer-employee British data, provides robust support for this prediction.

Details

New Analyses of Worker Well-Being
Type: Book
ISBN: 978-1-78350-056-7

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Book part
Publication date: 23 November 2020

Xin Jin

This chapter studies the negative signals associated with nonpromotion. I first show theoretically that, when workers' productivity rises little with additional years on…

Abstract

This chapter studies the negative signals associated with nonpromotion. I first show theoretically that, when workers' productivity rises little with additional years on the same job level, the negative signal associated with nonpromotion leads to wage decreases. On the other hand, when additional job-level tenure leads to a sizable increase in productivity, workers' wages increase. I then test my model's predictions using the personnel records from a large US firm from 1970–1988. I find a clear hump-shaped wage-job-tenure profile for workers who stay at the same job level, which supports my model's prediction.

Details

Change at Home, in the Labor Market, and On the Job
Type: Book
ISBN: 978-1-83909-933-5

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