计量经济分析 = Econometric analysis

Earnings Management and Investor Protection: An International Comparison

What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

* Starting from Need* Evolution of the Toyota Production System* Further Development* Genealogy of the Toyota Production System* The True Intention of the Ford System* Surviving the Low-Growth Period

Toyota production system : beyond large-scale production

We define higher audit quality as greater assurance of high financial reporting quality. Researchers use many proxies for audit quality, with little guidance on choosing among them. We provide a framework for systematically evaluating their unique strengths and weaknesses. Because it is inextricably intertwined with financial reporting quality, audit quality also depends on firms’ innate characteristics and financial reporting systems. Our review of the models commonly used to disentangle these constructs suggests the need for better conceptual guidance. Finally, we urge more research on the role of auditor and client competency in driving audit quality.

A Review of Archival Auditing Research

The reliability of internal control systems is a primary concern of auditors (AU, sec. 320). As a basis for improving assessments of reliability, accounting researchers have experimented with the development and use of formal models of the reliability of an accounting system (see Yu and Neter [1973] and Cushing [1974] for early examples). A primary objective of these models is to provide a less-subjective technique for assessing system reliability and the degree of audit reliance to be placed on internal controls. One common criticism of these models is that they tend to be based on restrictive assumptions about actual accounting environments.' Of course, models based on restrictive assumptions may still yield robust results, at least from an empirical viewpoint. This paper addresses this issue directly by examining the effect on the estimates derived from reliability models of various simplifying assumptions made about the interdependence of accounting errors. The next section of this paper discusses the error assumptions which are implicit in all reliability models. In section 3, a reliability model is developed which incorporates two alternative error assumptions. Then, in section 4, the prediction results of the reliability model under each

An Analysis of Alternative Error Assumptions in Modeling the Reliability of Accounting Systems

SUMMARY: This study examines the association between certain audit firm characteristics and audit firm litigation risk. Previous research shows a link between audit client characteristics and audit firm litigation risk. However, insurance companies do not make extensive use of financial information about individual audit clients to make risk assessments. Instead, they primarily use information about the audit firms themselves. Using data from a large insurance company, we examine the link between several audit firm characteristics and audit-related litigation. Based on a dichotomous measure of risk (existence of a lawsuit), we find that larger firms, firms experiencing rapid growth, firms that sue their clients, and firms with a history of problems all face greater litigation risk. Introducing a continuous measure of the cost of litigation we find, in addition to the previously mentioned risk factors, that firms with a prior history of regulatory problems and firms that choose smaller deductibles are more...

Litigation Risk and Audit Firm Characteristics

This study investigates the implicit financial incentives of individual Big 4 audit partners by examining the association between a partner’s compensation and characteristics of the audit firm, audit partner, and individual partner clientele for Big 4 firms in Sweden. Using tax and financial data for individual audit partners and clients, our empirical findings indicate that there is significant variation in the implicit determinants that are associated with compensation across the Big 4. We find that audit partners’ compensation is positively associated with the size of their clientele or the number of publicly-traded clients, both of which represent revenue generating opportunities. Similarly, compensation and developing an industry specialization are positively related. In three firms, gaining clients is clearly related to an increase in compensation, while losing a client is associated with a reduction in partner income in only one firm. We find that audit partner income is more sensitive to performance-related incentives, such as attracting new clients, as partners progress in their career. Finally, we find evidence that audit failures, proxied by reporting errors related to issuing a going concern opinion, are associated with lower compensation. These results should be of interest to the auditing profession, audit firms and regulators when they consider the effects of implicit incentives of partner compensation on audit quality.

Empirical Evidence on the Implicit Determinants of Compensation in Big Four Audit Partnerships

SUMMARY: This study uses an experiment to investigate how management turnaround initiatives influence auditors' going-concern decisions for financially distressed firms. Using mediation analysis, we are able to distinguish between a direct effect of strategic and operating turnaround initiatives on going-concern judgment and a mediated effect through auditors' evaluation of subsequent financial evidence. Results from the experiment indicate that operating turnaround initiatives (e.g., cost cutting) are associated with lower relative recall of positive financial evidence and a higher likelihood of receiving a going-concern opinion. Further, we find no evidence of a direct link between client operating or strategic initiatives and an auditor's going-concern judgment. Data Availability: Data are available from the authors upon request.

Turnaround initiatives and auditors' going-concern judgment: Memory for audit evidence

We use data from internal assessments of audit quality in a Big 4 firm to investigate the impact of audit firm tenure and auditor-provided non-audit services (NAS) on audit quality. We find that first-year audits receive lower assessments of audit quality and that quality improves shortly thereafter and then declines as tenure becomes very long. Partitioning our sample between SEC registrants and private clients, we find that the decline in audit quality in the long tenure range is attributable to audits of private clients. For audits of SEC registrants, the probability of a high quality audit reaches its maximum with very long tenure. We also find that audit fees are discounted for first-year audits but auditor effort is higher than in subsequent years. We find no association, on average, between total NAS fees and audit quality in the full sample but observe that total NAS fees are positively associated with quality for SEC registrants and negatively associated with quality for privately held clients. Our findings are important for regulatory policies related to audit firm tenure and auditor-provided NAS.

W. Robert Knechel

Papers

An Analysis of Alternative Error Assumptions in Modeling the Reliability of Accounting Systems

Litigation Risk and Audit Firm Characteristics

Empirical Evidence on the Implicit Determinants of Compensation in Big Four Audit Partnerships

Turnaround initiatives and auditors' going-concern judgment: Memory for audit evidence

Audit Firm Tenure, Non-Audit Services, and Internal Assessments of Audit Quality