A Field Study on Small Accounting Firm Membership in Associations and Networks: Implications for Audit Quality

2018 ◽  
Vol 93 (5) ◽  
pp. 73-96 ◽  
Author(s):  
Kenneth L. Bills ◽  
Christie Hayne ◽  
Sarah E. Stein
Keyword(s):  
Field Study ◽  
Small Firms ◽  
Resource Dependence ◽  
Audit Quality ◽  
Accounting Firms ◽  
Factors Affecting ◽  
Accounting Firm ◽  
Audit Market ◽  
New Perspective ◽  
Do So

ABSTRACT Small accounting firms represent important participants in the audit market, yet details of how they operate and develop competencies remain unexplored. Small firms often join forces through accounting associations and networks (AANs), which may help them overcome significant challenges commonly faced by smaller firms. We interview 37 partners from 18 firms representing nine AANs to examine how small firms leverage their AAN membership and to understand the related implications for audit quality. Our findings indicate that small firms acquire needed resources and enhance their market legitimacy through AAN membership; however, the nature and extent to which they do so varies by AAN type. Importantly, we also find that the majority of respondents perceive AAN resources, especially access to expertise, as critical to their firms' audit quality. Our research, informed by a theoretical lens based on resource dependence and legitimacy, enriches existing auditing literature, provides a new perspective for member firms and regulators, and responds to recent calls to understand factors affecting accounting firms' competencies.

Comments by the Auditing Standards Committee of the Auditing Section of the American Accounting Association on the PCAOB Rulemaking Docket Matter No. 31: PCAOB Release No. 2010-005, Application of the “Failure to Supervise” Provision of the Sarbanes-Oxley Act of 2002 and Solicitation of Comment on Rulemaking Concepts

2011 ◽  
Vol 5 (1) ◽  
pp. C11-C15 ◽  
Author(s):  
Joseph Brazel ◽  
James Bierstaker ◽  
Paul Caster ◽  
Brad Reed
Keyword(s):  
Audit Quality ◽  
Exposure Period ◽  
Public Accounting ◽  
Accounting Firms ◽  
Accounting Firm ◽  
The Public ◽  
Sarbanes Oxley ◽  
Public Company ◽  
Auditing Standards ◽  
Supervision Practices

SUMMARY: Recently, the Public Company Accounting Oversight Board (“PCAOB” or “Board”) issued a release to address, in two ways, issues relating to the responsibilities of a registered public accounting firm and its supervisory personnel with respect to supervision. First, the release reminds registered firms and associated persons of, and highlights the scope of, Section 105(c)(6) of the Sarbanes-Oxley Act of 2002 (“the Act”), which authorizes the Board to impose sanctions on registered public accounting firms and their supervisory personnel for failing to supervise reasonably an associated person who has violated certain laws, rules, or standards. Second, the release discusses and seeks comment on conceptual approaches to rulemaking that might complement the application of Section 105(c)(6) and, through increased accountability, lead to improved supervision practices and, consequently, improved audit quality. The PCAOB provided for a 91-day exposure period (from August 5, 2010, to November 3, 2010) for interested parties to examine and provide comments on the conceptual approaches to rulemaking that might complement the application of Section 105(c)(6). The Auditing Standards Committee of the Auditing Section of the American Accounting Association provided the comments in the letter below to the PCAOB on the PCAOB Release No. 2010-005, Application of the “Failure to Supervise” Provision of the Sarbanes-Oxley Act of 2002 and Solicitation of Comment on Rulemaking Concepts.

scholarly journals The Influence of Competency, Independency, and Professionalism on Audit Quality

2019 ◽  
Vol 2 (2) ◽  
pp. 157-169
Author(s):  
Dewi Kartika ◽  
Bambang Agus Pramuka
Keyword(s):  
Audit Quality ◽  
Hypotheses Testing ◽  
Validity And Reliability ◽  
Accounting Firms ◽  
Accounting Firm ◽  
Future Studies ◽  
Internal Auditors ◽  
Central Java ◽  
Testing Techniques

The purpose of this research is to examine the influence of competency, independency, and professionalism on audit quality. Competency, independency, and professionalism are three characteristics of a competent auditor. The population of this research is the auditor of accounting firms in Central Java. The samples of this research are employees of auditors working at accounting firm (KAP) Budiman, Wawan, Pamudji Tegal, KAP Wartono & Fellow Surakarta, KAP Sophian Wongsaro Semarang, KAP Heliantono & Semarang Branch.  Forty-five questionnaires are employed in this study. Before the hypotheses testing, validity and reliability tests are run to determine the validity and reliability of the data. Hypothesis testing techniques use regression analysis. These research results show that competency, independency, professionalism influence the quality of the audit. However, these results have to be cautiously interpreted since only a few auditors’ questionnaires were worth analyzing. Future studies may increase the number of KAPs from other districts in Indonesia or using not only auditors from accounting firms but also government auditors or internal auditors.

scholarly journals Merger Auditor dan Kualitas Audit: Bukti Empiris Dari Bursa Efek Indonesia

2016 ◽  
Vol 17 (2) ◽  
pp. 107
Author(s):  
Sansaloni Butar-Butar
Keyword(s):  
Audit Quality ◽  
Empirical Studies ◽  
The United States ◽  
Legal Issues ◽  
Accounting Firms ◽  
Accounting Firm ◽  
Audit Failure ◽  
Audit Technology ◽  
Huge Investment

<em>Merge rof Pricewaterhouse and Coopers &amp; Lybrands that occurred in 1998 creates PricewaterhouseCoopers as the biggest accounting firm in history. Conceptually and supported by previous empirical result firm size is expected to be positively correlated with audit quality. Large accounting firms have financial ability to improve its auditors skill and can act more independently because major part of their income do not come from one or two clients. They spend huge investment in audit technology as well. However, this positive relationship only applies to environments where punishment is strictly imposed on audit failure. Unlike their counterparts in the United States and Europe, auditors working in Indonesia rarely face legal issues related to the audit assignment. In addition, empirical studies in Indonesia have always classified local auditors as Big N auditors if they affiliate with one of Big N auditors assuming same quality with that of Big N auditors. This assumption does not necessarily hold. Therefore, in the context of Indonesia environtments, this study predicts PricewaterhouseCoopers merger does not affect the quality of the audit. Using abnormal accruals as a proxy for audit quality, the results show that after the merger audit quality has declined significantly.</em>

scholarly journals Dilema Praktik Kantor Akuntan Publik: Pertautan Antara Keberlangsungan Hidup dengan Kualitas Audit

2018 ◽  
Vol 14 (3) ◽  
pp. 177-194
Author(s):  
Anggi Ratna Anggraini
Keyword(s):  
Audit Quality ◽  
Growth Strategy ◽  
Case Study Method ◽  
Public Accounting ◽  
Accounting Firms ◽  
Accounting Firm ◽  
Working Paper ◽  
Interpretive Paradigm ◽  
Audit Fee

This research focuses on the dilemma of small Public Accounting Firms in maintaining their survival, but still maintaining their audit quality. This research is qualitative research with interpretive paradigm and the case study method. This study shows how Public Accounting Firm X faces a dilemma situation when auditing small clients with low fees, while maintaining their audit quality. Public Accounting Firm X in its survival growth strategy uses a "zebra", a "radar" and a business diamond strategy. Public Accounting Firm X itself has a dilemma when faced with a small client who can only pay a low fee for audit services, if using the indicator minimum hourly charge-out rates determined by IAPI, then the audit fee cannot be applied on the client. In the end, the audit procedures carried out must be adequate to maintain audit quality, where Public Accounting Firm X uses Excel based Standard Working Paper during audits and cuts the leveling level. Regulations that accommodate more smaller clients in the area are needed related to audit services.

scholarly journals Introduction To Compilation Services As A Reinforcement Of Basic Accounting Concepts For Intermediate Accounting Students

2011 ◽  
Vol 5 (5) ◽  
pp. 9
Author(s):  
Evelyn A. McDowell ◽  
Wei Li ◽  
Karen McDougal
Keyword(s):  
Information Systems ◽  
Small Firms ◽  
Accounting Information ◽  
Financial Statements ◽  
Financial Accounting ◽  
Accounting Students ◽  
Academic Experience ◽  
Accounting Firms ◽  
Accounting Information Systems ◽  
Accounting Firm

According to a recent survey of accounting firms in 2008, Compilation and write-up services make up 23% of accounting firm billing for small firms with less than $1 Million in fee billings and 14% overall for all types of firms (Anonymous 2008), yet accounting students are rarely exposed to these services in their accounting academic experience. This comprehensive case gives students an opportunity to develop proficiencies in providing accounting compilation and write-up services to small business clients. Specifically, the goals of the case are to help students review the steps of the accounting cycle, understand how each of the four basic financial statements are inter-related, improve their ability to prepare financial statements and related disclosures, and enhance their spreadsheet skills. This case has been classroom tested and is appropriate for an intermediate accounting; honors introduction financial accounting course; or an accounting information systems course.

JOB BURNOUT DAN REDUCED AUDIT QUALITY PRACTICES (RAQP) DALAM PERSPEKTIF ROLE STRESS

SIMAK ◽  
2019 ◽  
Vol 17 (01) ◽  
pp. 42-83
Author(s):  
Richard Wiratama ◽  
Suwandi Ng ◽  
Lukman Lukman
Keyword(s):  
Role Conflict ◽  
Role Ambiguity ◽  
Audit Quality ◽  
Job Burnout ◽  
Role Overload ◽  
Public Accounting ◽  
Accounting Firms ◽  
Accounting Firm ◽  
Role Stressors ◽  
Quality Practices

The purpose of this study were to investigate the influence of role stressors (role ambiguity, role conflict, and role overload) to the reduced audit quality practices (RAQP) were tested both directly and indirectly through the variable job burnout. Respondents in this study are auditors who working in 15 Public Accounting Firms at Sulawesi, Papua, and Maluku. Data collection procedures in the study were taken directly (Administered Personality Questionnaires) in Public Accounting Firm located in Makassar, while the public accounting firm which the outside of Makassar were spread by sending questionnaires (Mail Questionnaires). Data were analyzed using the path analysis. The results of this study indicate that role stressors (role ambiguity, role conflict, and role overload) have a positive and significant effect on job burnout and also job burnout has a positive and significant effect on reduced audit quality practices (RAQP). The direct influence of role stressors (role ambiguity, role conflict, and role overload) have a positive but not high enough to have a strong influence on reduced audit quality practices (RAQP). Implications practice of this research are as learning profession Public Accountants and auditors to take preventive actions and improvements on stress due to role stressors.

scholarly journals Investigating the Relationship between Intellectual Capital and Audit Quality Based on China Audit Market

2020 ◽  
Vol 7 (1) ◽  
pp. 65-75
Author(s):  
Meng Chao ◽  
Dewi Fariha Abdullah ◽  
Norhalimah Idris
Keyword(s):  
Human Capital ◽  
Conceptual Framework ◽  
Financial Reporting ◽  
Intellectual Capital ◽  
Audit Quality ◽  
Accounting Firms ◽  
Audit Market ◽  
Knowledge Intensive ◽  
The Relationship

Audit quality is often considered as the probability that auditors can detect and report misstatements of clients’ financial reporting, and enhance the credibility of stakeholders on disclosed information. Hence, the importance of intellectual capital can be tracked to the audit quality of accounting firms with knowledge-intensive feature. This paper discusses a more comprehensive perspective of intellectual capital in auditing area, with the opinion that all of the four components will have critical impact on audit quality. Not only human capital and spiritual capital including such as knowledge, skills, expertise, ethics, moral and values etc., but also the rules, systems, norms within the firm and the relationship characteristics of the firm with its clients are all closely related to audit quality. This paper introduces a more complete conceptual framework of intellectual capital on the basis of exploring the factors mentioned in previous studies and discusses the influencing factors of intellectual capital on audit quality, and finally puts forward some suggestions on the structure of intellectual capital, the internal management of accounting firms and industry supervision based on China's audit market.

Effect of Professional Ethics, Audit Quality, and Workload on Materiality Levels Consideration

2021 ◽  
Vol 3 (1) ◽  
pp. 93-105
Author(s):  
Ni Wayan Rustiarini ◽  
I Kadek Listawan ◽  
Ni Putu Shinta Dewi
Keyword(s):  
Professional Ethics ◽  
Audit Quality ◽  
Financial Statements ◽  
Professional Judgment ◽  
Public Accounting ◽  
Accounting Firms ◽  
Accounting Firm ◽  
Study Population ◽  
Positive Effect ◽  
Ethics Audit

The level of materiality is a professional judgment that affects the auditor's perception of the needs of those who have sufficient knowledge and who place confidence in the financial statements. Materiality relates to decision making that will give rise to confidence in users of financial statements that the financial statements are free from material misstatement and are by accounting principles. This study aims to examine and obtain evidence of the influence of professional ethics, audit quality, and workload on the consideration of Bali public accounting firms' materiality levels. The study population was auditors at Bali's public accounting firm, registered in the Ikatan Akuntan Public Indonesia Directory, which was still active until 2020. The sample in this study was 80 respondents who were determined based on the purposive sampling method. The analytical tool used to test the hypothesis is multiple linear regression. The results showed that professional ethics and audit quality had a positive effect on the materiality level. Meanwhile, the workload does not affect the materiality level consideration.

The Introduction of State Regulation and Auditor Retendering in School Districts: Local Audit Market Structure, Audit Pricing, and Internal Controls Reporting

2019 ◽  
Vol 39 (2) ◽  
pp. 81-115
Author(s):  
Randal J. Elder ◽  
Alfred A. Yebba
Keyword(s):  
New York ◽  
School Districts ◽  
Internal Control ◽  
Small Firms ◽  
Audit Quality ◽  
New York State ◽  
Audit Fees ◽  
State Regulation ◽  
New York School ◽  
Audit Market

SUMMARY Scandals discovered in New York school districts resulted in two legislative acts designed to improve internal control systems and independent audit quality within the State's school district audit market. The legislation requires that audits be awarded through a formal requisitioning process (RFP), including optional rotation, every five years. The Office of the New York State Comptroller auditors also began performing internal control inspections at school districts and performing audit quality inspections of independent auditors. Post-regulation, the audit market became more concentrated, with greater usage of specialist audit firms and fewer small firms. Audit fees and audit report lag increased substantially and specialist auditors began earning a fee premium. We also find a significant increase in internal control exceptions reported by New York school districts and variation in the reporting of control deficiencies by auditor type.

scholarly journals The Effect of Auditor Ethics, Auditor Experience, Audit Fees and Auditor Motivation on Audit Quality

2017 ◽  
Vol 1 (2) ◽  
pp. 203
Author(s):  
Yeni Kuntari ◽  
Anis Chariri ◽  
Nurdhiana Nurdhiana
Keyword(s):  
Audit Quality ◽  
Audit Fees ◽  
Total Sample ◽  
Certified Public Accountants ◽  
Significant Positive Effect ◽  
Public Accounting ◽  
Accounting Firms ◽  
Accounting Firm ◽  
One Year ◽  
Positive Effect

This study aimed to determine the effect of auditor ethics, auditor experience, audit fees, and auditor motivation on audit quality of public accounting firm in Semarang. The populations in this study were auditors who work on public accounting firm in Semarang. The total population of public accounting firm in Semarang according to Indonesian Institute of Certified Public Accountants in 2016 was 98 respondents from 14 public accounting firms. Questionnaires were distributed to auditors in all those public accounting firm. This study used purposive sampling judgement with criteria of sample were they have worked and experienced in public accounting firm for one year. A total sample of this study is 30 respondents. Using multiple linier regression analysis the results show that auditor ethics had a significant positive effect on audit quality; auditor experience had a significant positive effect on audit quality; audit fees had a significant positive effect on audit quality; and auditor motivation had a significant positive effect on audit quality. Ethics, experience, fees and motivation of auditor had a significant positive effect on audit quality.

Sign in / Sign up

Export Citation Format

Share Document