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Article
Publication date: 3 February 2014

Claus Holm and Frank Thinggaard

The authors aim to exploit a natural experiment in which voluntary replace mandatory joint audits for Danish listed companies and analyse audit fee implications of using one or…

2168

Abstract

Purpose

The authors aim to exploit a natural experiment in which voluntary replace mandatory joint audits for Danish listed companies and analyse audit fee implications of using one or two audit firms.

Design/methodology/approach

Regression analysis is used. The authors apply both a core audit fee determinants model and an audit fee change model and include interaction terms.

Findings

The authors find short-term fee reductions in companies switching to single audits, but only where the former joint audit contained a dominant auditor. The authors argue that in this situation bargaining power is more with the auditors than in an equally shared joint audit, and that the auditors' incentives to offer an initial fee discount are bigger.

Research limitations/implications

The number of observations is constrained by the small Danish capital market. Future research could take a more qualitative research approach, to examine whether the use of a single audit firm rather than two has an effect on audit quality. The area calls for further theory development covering audit fee and audit quality in joint audit settings.

Practical implications

Companies should consider their relationship with their auditors before deciding to switch to single auditors. Fee discounts do not seem to reflect long-lasting efficiency gains on the part of the audit firm.

Originality/value

Denmark is the first country to leave a mandatory joint audit system, so this is the first time that it is possible to study fee effects related to this.

Details

Managerial Auditing Journal, vol. 29 no. 2
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 21 June 2013

Mahbub Zaman and Gerrit Sarens

This paper aims to recognise the importance of informal processes within corporate governance and complement existing research in this area by investigating factors associated…

3885

Abstract

Purpose

This paper aims to recognise the importance of informal processes within corporate governance and complement existing research in this area by investigating factors associated with the existence of informal interactions between audit committees and internal audit functions and in providing directions for future research.

Design/methodology/approach

To examine the existence and drivers of informal interactions between audit committees and internal audit functions, this paper relies on a questionnaire survey of chief audit executives (CAEs) in the UK from listed and non‐listed, as well as financial and non‐financial, companies. While prior qualitative research suggests that informal interactions do take place, most of the evidence is based on particular organisational setting or on a very small range of interviews. The use of a questionnaire enabled the examination of the existence of internal interactions across a relatively larger number of entities.

Findings

The paper finds evidence of audit committees and internal audit functions engaging in informal interactions in addition to formal pre‐scheduled regular meetings. Informal interactions complement formal meetings with the audit committee and as such represent additional opportunities for the audit committees to monitor internal audit functions. Audit committees' informal interactions are significantly and positively associated with audit committee independence, audit chair's knowledge and experience, and internal audit quality.

Originality/value

The results demonstrate the importance of the background of the audit committee chair for the effectiveness of the governance process. This is possibly the first paper to examine the relationship between audit committee quality and internal audit, on the existence and driver of informal interactions. Policy makers should recognize that in addition to formal mechanisms, informal processes, such as communication outside of formal pre‐scheduled meetings, play a significant role in corporate governance.

Details

Managerial Auditing Journal, vol. 28 no. 6
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 1 December 1997

Ingmar Björkman and Sören Kock

Suggests that most research on internationalization of service firms has investigated how companies over time have developed their outward business operations. Finds, however…

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Abstract

Suggests that most research on internationalization of service firms has investigated how companies over time have developed their outward business operations. Finds, however, that some service firms, especially within the tourism industry, have chosen another way of handling international business operations, namely by marketing their services abroad, often helped by middlemen such as tour operators and travel agents, expecting customers to come to their home country where services are produced and consequently must be consumed. Uses three cases to describe and analyse the process of “inward internationalization”, and to illustrate how the inward international activities may be carried out.

Details

International Journal of Service Industry Management, vol. 8 no. 5
Type: Research Article
ISSN: 0956-4233

Keywords

Available. Open Access. Open Access
Article
Publication date: 5 January 2024

Jesper Haga and Kim Ittonen

This paper examines the organizational resilience of audit firms during the early stages of COVID-19. The unexpected restrictions placed on travel and on-site working created…

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Abstract

Purpose

This paper examines the organizational resilience of audit firms during the early stages of COVID-19. The unexpected restrictions placed on travel and on-site working created unanticipated barriers for auditors in Hong Kong. The authors expect that auditors with greater organizational resilience can respond to unexpected situations and restore expected performance levels relatively quickly.

Design/methodology/approach

The authors utilize a sample of 1,008 companies listed on Hong Kong Stock Exchange (HKEX) with a financial year-end of December 31. The authors identify five proxies contributing to organizational resilience: auditor size, industry specialization, diversity, geographic proximity to the client and auditing a new client. The authors use audit report timeliness as this study's main dependent variable.

Findings

This study's full-sample results suggest that larger auditors, industry specialists and auditors with closer relationships to clients issued more timely audit reports during the pandemic. The analysis of a subsample of companies that initially published unaudited financial statements reveals that industry expertise and longer auditor-client relationships significantly reduced the need for year-end audit adjustments. Finally, the authors find that larger auditors were more likely to offload clients, whereas industry specialists were more likely to retain clients.

Research limitations/implications

The results of the paper suggests that audit firm characteristics associated cognitive abilities, behavioral characteristics and contextual conditions are associated with audit firm organizational resilience and, consequently, helps auditors respond unexpected changes in the audit environment.

Practical implications

The findings of the paper are informative for those involved in audit firm management or auditor hiring and retention decisions.

Originality/value

This study is the first to link organizational resilience to the performance of audit firms in a time of unexpected events. The authors connect three auditor and two auditor-client dimensions to the organizational resilience of the audit firms.

Details

Journal of Applied Accounting Research, vol. 26 no. 6
Type: Research Article
ISSN: 0967-5426

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Article
Publication date: 3 July 2017

Damai Nasution and Karin Jonnergård

This study aims to examine the association between auditor and chief financial officer (CFO) gender and earnings quality, utilising data from Sweden. This study also aims to…

2027

Abstract

Purpose

This study aims to examine the association between auditor and chief financial officer (CFO) gender and earnings quality, utilising data from Sweden. This study also aims to examine whether interactions between auditor and CFO, which may affect a firm’s earnings quality, are associated with their gender. These aims are inspired by the notion that gender differences will be overruled by the rewards and socialisation into the occupational roles as suggested by the structural approach to gender.

Design/methodology/approach

This study uses a multivariate regression model to test its hypotheses. The sample consists of 976 firm-year observations covering the period 2008 to 2013.

Findings

The results show that gender of the auditor and CFO is not associated with earnings quality, and the interactions between auditors and CFOs, which may affect earnings quality, are not associated with their gender. Consequently, the results give tentative support for the structural approach in gender studies in the accounting and auditing field.

Research limitations/implications

This study indicates that future research in gender studies should consider the structural approach based on the argument of gender similarities. This approach contends that work-related behaviour of women will more resemble men, and this is caused by the socialisation process into the occupational role and the structure where they work (e.g. organisational and professional culture, work conditions, a compensation scheme, national culture, etc.) instead of gender.

Originality/value

This study contributes to the understanding whether gender – auditor and CFO gender – is associated with firms’ earnings quality and standing whether the interactions between auditor and CFO are associated with their gender, something that, to the best of the authors’ knowledge, has not been tested previously. It also re-introduces the structural approach within the gender research in the accounting and auditing field.

Details

Gender in Management: An International Journal, vol. 32 no. 5
Type: Research Article
ISSN: 1754-2413

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Article
Publication date: 1 January 2014

Charl de Villiers, David Hay and Zhizi (Janice) Zhang

– This study aims to contribute to the understanding of audit pricing and the competitiveness of the audit fee market by examining audit fee stickiness.

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Abstract

Purpose

This study aims to contribute to the understanding of audit pricing and the competitiveness of the audit fee market by examining audit fee stickiness.

Design/methodology/approach

The authors explore the price behavior of audit fees in response to changes in the variables that are usually seen as their determinants, such as size, complexity, and risk in order to examine audit fee stickiness and the competitiveness of the market for audit services.

Findings

The authors find that audit fees are sticky, i.e. audit fees do not immediately or fully adjust to changes in their determinants. Audit fees also respond to changes leading to an increase more quickly than they respond to changes leading to a decrease. The difference between positive and negative fee adjustments declines over periods longer than one year and is no longer significant when four-year periods are considered.

Research limitations/implications

The study is limited to companies in the USA from 2000 to 2008. Future research should examine this issue in other settings and periods.

Practical implications

The results suggest that the audit market is competitive, at least in the medium term.

Originality/value

The study helps to explain why the audit fee model does not fully explain the level of audit fees; why audit fees are more likely to be too high than too low; and why auditor switches are commonly associated with larger changes in audit fees. The findings provide evidence that may be useful to managers and audit committees when managing their audit fees, auditors when considering the risks and opportunities associated with changes in the determinants of audit fees, and regulators concerned with the competitiveness of the audit market.

Details

Managerial Auditing Journal, vol. 29 no. 1
Type: Research Article
ISSN: 0268-6902

Keywords

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Article
Publication date: 1 July 2014

Mahbub Zaman and Jaravee Chayasombat

There is limited evidence on how differences in economic environments affect the demand for and supply of auditing. Research on audit pricing has mainly focused on large client…

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Abstract

Purpose

There is limited evidence on how differences in economic environments affect the demand for and supply of auditing. Research on audit pricing has mainly focused on large client markets in developed economies; in contrast, the purpose of this paper is to focus on the small client segment in the emerging economy of Thailand which offers a choice between auditors of two different qualities.

Design/methodology/approach

This paper is based on a random stratified sample of small clients in Thailand qualifying for audit exemption. The final sample consists of 1,950 firm-year observations for 2002-2006.

Findings

The authors find evidence of product differentiation in the small client market, suggesting that small firms view certified public accountants as superior and pay a premium for their services. The authors also find that audit fees have a positive significant association with leverage, metropolitan location and client size. Audit risk and audit opinion are not, however, significantly associated with audit fees. Furthermore, the authors find no evidence that clients whose financial year ends in the auditors’ busy period pay significantly higher audit fees, and auditors engage in low-balling on initial engagements to attract audit clients.

Research limitations/implications

The research shows the importance of exploring actual decisions regarding audit practice and audit pricing in different institutional and organizational settings.

Originality/value

The paper extends the literature from developed economies and large/listed market setting to the emerging economy and small client market setting. As far as the authors are aware, this is the first paper to examine audit pricing in the small client market in an emerging economy.

Details

Journal of Accounting in Emerging Economies, vol. 4 no. 2
Type: Research Article
ISSN: 2042-1168

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Article
Publication date: 1 April 2003

Georgios I. Zekos

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some…

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Abstract

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

Details

Managerial Law, vol. 45 no. 1/2
Type: Research Article
ISSN: 0309-0558

Keywords

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Article
Publication date: 20 January 2022

Victor F.A. Barros and Isabel Ramos

The purpose of the research described in this paper is to provide empirical evidence pointing to IT artifacts' contribution to organizational mindfulness.

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Abstract

Purpose

The purpose of the research described in this paper is to provide empirical evidence pointing to IT artifacts' contribution to organizational mindfulness.

Design/methodology/approach

To accomplish the specified aim, the authors studied how a leading company in the cork industry uses a platform to support the innovation process's ideation phase. This case study took two and a half years, and the research information was collected in documents, meetings, observations and interviews.

Findings

The study provides empirical evidence pointing to the funneling of collective attention induced by the studied platform. The use of an innovation platform was engaging the collective attention to the incremental innovation of processes to the detriment of products' disruptive innovation.

Originality/value

The authors’ findings contribute to developing an IS mindfulness theory and designing sociotechnical arrangements that expand organizational mindfulness. The analysis of the gathered research information resulted in a first explanation for the impact of using IT artifacts on organizational mindfulness. The resulting framework emerged as a first step in the effort to develop an IS mindfulness theory, paving the way for developing a methodological approach to support CIOs in addressing the challenges of the digital age.

Details

Information Technology & People, vol. 36 no. 1
Type: Research Article
ISSN: 0959-3845

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Article
Publication date: 17 August 2021

Jane Maley and Timothy Kiessling

The study explores inpatriation and the role of performance management (PM) upon knowledge transfer through the theoretical lenses of leader–member exchange (LMX) and social…

364

Abstract

Purpose

The study explores inpatriation and the role of performance management (PM) upon knowledge transfer through the theoretical lenses of leader–member exchange (LMX) and social embeddedness theories.

Design/methodology/approach

The study adopts a qualitative approach and focuses on inpatriate managers at the headquarters of three large UK healthcare multinational corporations (MNC). The authors were able to collect and analyze 24 interviews, with a focus on our key variables. The authors also conducted interviews with human resource (HR) personnel responsible for global mobility.

Findings

The findings suggest that the inpatriate managers’ willingness to transfer knowledge is contingent on their LMX with their supervisor and embeddedness within the firm. The authors found that good PM is the facilitator.

Originality/value

The critical contribution of the paper is exposing apparent weaknesses in current inpatriate PM practices in contributing to the MNCs' global knowledge flows, and ultimately, firm performance. This study's findings add to the awareness of how MNC knowledge flows transpire and emphasize the importance of rigorous PM practices for MNC knowledge transfer.

Details

Journal of Global Mobility: The Home of Expatriate Management Research, vol. 9 no. 4
Type: Research Article
ISSN: 2049-8799

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