Mark Tucker, Christine Jubb and Chee Jin Yap
The purpose of this paper is to investigate the extent to which the three constructs associated with the theory of planned behaviour (TPB) can explain student banking intentions…
Abstract
Purpose
The purpose of this paper is to investigate the extent to which the three constructs associated with the theory of planned behaviour (TPB) can explain student banking intentions and assist in understanding their bank satisfaction.
Design/methodology/approach
This research issue was investigated using a mixed methods approach, incorporating both qualitative and quantitative methods. Convenience sampling was used. Factor analysis and logistic regression were used to ascertain the relevance of the TPB in explaining student banking intentions.
Findings
Using factor analysis, perceived behavioural control was shown to be the key determinant in explaining student banking intentions. Using a logistic regression, the TPB was shown to have strong application in predicting customer satisfaction with all three of its constructs significant, but weaker application for predicting the likelihood of a bank switch, with subjective norms and attitude significant, and even less for the likelihood of recommending the bank to a friend, with only perceived behavioural control significant.
Research limitations/implications
The use of an online survey which limits the pool of respondents to internet users, together with the sample size, limit the generalisability of findings.
Practical implications
Banks can better target and understand the drivers that influence both student banking intentions and customer satisfaction. This knowledge will allow banks to better attract and retain student customers.
Originality/value
Provides insight to and a better understanding of how the TPB can explain and predict student banking intentions. This study fills a gap in the literature by concentrating on student banking behaviour in Australia, a substantial segment of bank customers that has received little research.
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The purpose of this study is to review a synthesis of International Financial Reporting Standards (IFRS) implementation in developing countries in an attempt to provide directions…
Abstract
The purpose of this study is to review a synthesis of International Financial Reporting Standards (IFRS) implementation in developing countries in an attempt to provide directions for future research. The in-depth analysis was performed with the use of the data analysis tool available in the Scopus databases. The study initially reviewed 145 papers and in particular 35 papers were analysed. Fifteen articles (43%) were published in seven journals including International Journal of Accounting, Critical Perspectives on Accounting, Advances in Accounting, International Journal of Accounting and Information Management, Asian Review of Accounting, Journal of Applied Accounting Research, and Asian Journal of Business and Accounting. Specifically, 89% citations were from 14 articles, but 9 (25%) articles were without any citations. Most of the studies focus on qualitative followed by quantitative, and very few studies were based on mixed methods. Researchers should focus on few areas for future research on IFRS implementation in developing countries including theory implications, policy prescriptions, and case of particular standard.
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Sumithira Thavapalan, Robyn Moroney and Roger Simnett
This paper investigates the impact of the PricewaterhouseCoopers (PwC) merger in Australia on existing and potential clients of the new merged firm. From prior theory it is…
Abstract
This paper investigates the impact of the PricewaterhouseCoopers (PwC) merger in Australia on existing and potential clients of the new merged firm. From prior theory it is expected that some existing clients may have an incentive to switch away from a newly merged firm as the same larger firm now audits close competitors once audited by separate firms. Prior theory also suggests that another group of potential clients should be attracted to the newly merged firm where the merger enhances or creates industry specializations. The expectation is that in both of these instances there will be increased switching activity associated with the newly merged audit firm. Contrary to expectations, a significantly lower level of switching behaviour was observed for the newly merged firm compared with that of the other Big 5 firms, suggesting that an advantage of enhanced specialization may not be the attraction of new clients but the retention of existing clients. When comparing the nature of the switches, some support was found for the view that the switches to the new firm were likely to be in enhanced areas of specialization, but no evidence was found to suggest that close competitors would switch away from this firm. The greater rate of retention of clients compared with other Big 5 firms was not associated with a more competitive audit pricing policy.
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This paper aims to investigate the association between the composition of boards of directors and the choice of external auditor among companies listed on the Kuwait Stock…
Abstract
Purpose
This paper aims to investigate the association between the composition of boards of directors and the choice of external auditor among companies listed on the Kuwait Stock Exchange (KSE) in 2013.
Design/methodology/approach
Consistent with prior research, audit quality is represented by two proxies, namely, a Big 4 and Non-Big 4 audit firm. Independence, diversity, interlocks, size and role duality are used as proxies for board composition. To accommodate the dichotomous dependent variable (auditor choice), a logistic regression model is used to test the hypothesized associations between board composition and auditor choice.
Findings
After controlling for firm-specific characteristics, results show that independence, diversity and size are statistically significant and increase the likelihood that a KSE-listed company selects a high-quality (Big 4) audit firm. Role duality is also statistically significantly but decreases the likelihood of choosing a Big 4 audit firm.
Practical/implications
This research has implications for regulators, shareholders, boards and academics. The paper underlines the importance of the composition of the board in increasing the likelihood of hiring a high-quality audit firm. Regulators can draw upon these results when assessing the effectiveness of corporate governance mechanisms.
Originality/value
This paper is among the first to study the association between auditor choice and board composition using data from the frontier market of Kuwait, thus responding to the call for empirical research into the issue in less-developed markets. Overall, it sheds light on the effectiveness of board composition and provides empirical evidence that it is an important element in the choice of auditors. The findings indicate that board composition may be a mechanism that can promote demand for high audit quality.
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Constantinos Caramanis and Charalambos Spathis
The objective of this paper is to test the extent to which combinations of financial information with non‐financial variables, such as audit fees and type of audit firm, can be…
Abstract
Purpose
The objective of this paper is to test the extent to which combinations of financial information with non‐financial variables, such as audit fees and type of audit firm, can be used in predicting qualified and unqualified audit reports.
Design/methodology/approach
The data were taken from a sample of 185 Greek companies listed at the Athens stock exchange and were analysed using logistic and OLS regression models.
Findings
It is found that audit fees and the type of audit firm (Big five vs non‐Big five) do not affect auditors' propensity to qualify their opinions. Instead, the occurrence of audit qualifications is associated with financial metrics such as operating margin to total assets and the current ratio. The model developed was successful in classifying 90 per cent of the total sample.
Originality/value
This study has implications for external auditors, regulators and investors. Also contributes to auditing and accounting research by examining the suggested variables to identify those that can best discriminate cases of audit opinion.
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Nejia Nekaa and Sami Boudabbous
The purpose of this study is to show the specificities of the corporate governance of Tunisian financial institutions and the impact of the internal mechanisms of corporate…
Abstract
Purpose
The purpose of this study is to show the specificities of the corporate governance of Tunisian financial institutions and the impact of the internal mechanisms of corporate governance of these institutions on their social performance. It is therefore interesting to establish the existing relationship between these mechanisms of corporate governance and the performance of a financial firm.
Design/methodology/approach
This study aims to study the financial sector, generally characterized by its opacity, its regulation, its evolution and its obscurity. Therefore, a study based on the questionnaire method was recommended. The questionnaire is intended for managers. Therefore, the authors interviewed 138 managers of Tunisian financial institutions dispersed between agencies and headquarters in different regions (Gabes, Tozeur, Gafsa, Sfax, Sousse and Tunisia).
Findings
As a result, an impact on performance was observed according to the empirical study. Therefore, the authors can conclude an essential role of internal mechanisms for improving the social performance of a financial institution. The empirical findings in this paper lead to important conclusions. Indeed, the variables measuring the governance mechanisms have divergent effects on the social performance of the financial institutions subject to the sample. For the variables board of directors, confidence, culture, auditing, they have a positive effect. While, the incentive remuneration effect negatively the social performance.
Originality/value
This study will be based essentially on the financial sector in Tunisia: the credit institutions (22 banks), the establishments of leasing (eight companies of leasing), two factoring companies and two banks of cases which are listed on the Stock Exchange of Tunis (BVMT).
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Hanmei Chen, Weishi Jia, Shuo Li and Zenghui Liu
The purpose of this paper is to examine how the concentration of a specific customer type – governmental customer, affects the pricing of audit services in the USA.
Abstract
Purpose
The purpose of this paper is to examine how the concentration of a specific customer type – governmental customer, affects the pricing of audit services in the USA.
Design/methodology/approach
This paper applies a standard audit pricing model by regressing audit fees on governmental customer concentration and other common determinants of audit fees. This paper also adopts an instrumental variable approach and performs propensity-score matched sample analyzes to mitigate the potential endogeneity problem.
Findings
Using data from major customer disclosures of US publicly listed firms from 2000 to 2014, this paper finds that governmental customer concentration is positively associated with audit fees, suggesting that a higher level of governmental customer concentration increases a firm’s audit risks and audit effort. In addition, this paper performs cross-sectional analyzes and show that the association between governmental customer concentration and audit fees is more pronounced for firms with weak internal governance, weak external monitoring and high financial risks.
Originality/value
This paper furthers the understanding of the interactive relationships in supply chain systems and adds new evidence to the literature on customer concentration. Prior studies on customer concentration typically treat all customer types in a uniform manner. To the knowledge, this is the first study that separates governmental customers from other types of customers in an audit pricing setting. The findings highlight the importance of examining governmental customer concentration when assessing a firm’s audit risks and audit fees.
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Kalyani Mulchandani, Ketan Mulchandani and Megha Jain
The study examines the influence of a firm's life cycle on the cash flow classification of Indian firms.
Abstract
Purpose
The study examines the influence of a firm's life cycle on the cash flow classification of Indian firms.
Design/methodology/approach
The study employs Dickinson's (2011) cash flow patterns to classify firm years under various life-cycle stages. Cash flow classification is employed to measure a firm's classification shifting (CS) practices. The study includes Indian firms listed on the Bombay Stock Exchange during 2012–2020, an ordinary least squares regression model, a fixed-effect model and a panel corrected with standard error regression method.
Findings
Firms face different opportunities and challenges at different stages of the firm's life cycle and therefore adopt cash flow CS. The results show that firms adopt cash flow CS during introduction, growth and decline stage of life cycle either to boost or to reduce operating cash flows.
Originality/value
This study is one of its kind to study the influence of a firm's life cycle on the cash flow classification of Indian firms.
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Stergios Leventis and Constantinos Caramanis
The purpose of this paper is to examine auditor‐ and auditee‐related factors that determine audit time, as a proxy of audit quality. The issue of audit quality is of particular…
Abstract
Purpose
The purpose of this paper is to examine auditor‐ and auditee‐related factors that determine audit time, as a proxy of audit quality. The issue of audit quality is of particular significance, while companies in Europe move towards adoption of international accounting standards.
Design/methodology/approach
The paper compares the actual audit hours for corporate audits of listed companies with a minimum prescribed by the Supervisory Council of the Hellenic Institute of Certified Auditors (known in Greek with the acronym SOEL). The data used are from the period immediately preceding the implementation of SOEL's minimum audit time criteria.
Findings
An “audit effort” ratio calculated as actual hours to minimum hours prescribed is found to bear a positive correlation with company size and gearing, and is also significantly higher for companies audited by large multinational audit firms and for companies that seek equity finance. A proportion of audits is found to have been conducted at less than the prescribed minimum.
Research limitations/implications
A number of theoretical and measurement limitations are acknowledged that could further increase the explanatory power of the model. A discussion is also included of the potential effectiveness of regulation as a mechanism for strengthening the agency relationship between management and shareholders.
Practical implications
The study should be of assistance to auditors, auditees and regulatory authorities.
Originality/value
This paper fills a widely acknowledged gap in the literature regarding the determinants of audit time and the concept of audit quality, particularly in a newly developed capital markets.
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C.A. Jubb, K.A. Houghton and S. Butterworth
Addresses concerns regarding perceptions and measurement of risk and the resultant confusion relating to understanding of the market for audit services. Examines the theoretical…
Abstract
Addresses concerns regarding perceptions and measurement of risk and the resultant confusion relating to understanding of the market for audit services. Examines the theoretical justification for a plural approach to dealing with “risk” in audit fee models. Reviews the relevant literature and undertakes a factor analysis of 229 Western Australian firms in search of evidence of plurality. Argues for recognition of the idea that risk in the audit context is composed of two separate but related concepts: audit risk and business risk.