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Measuring productivity growth, technical progress, and efficiency changes of CPA firms prior to, and following the Sarbanes–Oxley Act
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In this article, the authors investigated productivity growth, technical progress, and efficiency change for a group of the 56 largest CPA firms in the US from the period 1996-1999 through the period 2003-2006, where the former preceded, and the latter followed, enactment of the Sarbanes-Oxley Act (SOX).Abstract:
This paper investigates productivity growth, technical progress, and efficiency change for a group of the 56 largest CPA firms in the US from the period 1996–1999 through the period 2003–2006, where the former preceded, and the latter followed, enactment of the Sarbanes–Oxley Act (SOX). Data envelopment analysis (DEA) is used to calculate Malmquist indices of three measures of interest: productivity growth, technical progress, and efficiency change. Results indicate that CPA firms, on average, experienced a productivity growth of approx. 17% from the pre- to post-SOX period. Consistent with the finding of Banker et al. [Banker RD, Chang H, Natarajan R. Productivity change, technical progress and relative efficiency change in the public accounting industry. Management Science 2005;51:291–304], this productivity gain can be attributed primarily to technical progress rather than a change in relative efficiency. In addition, results indicate that the “Big 4” firms underperformed their non-Big 4 counterparts in both productivity growth and technical progress.read more
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A hybrid multiple criteria decision making model of sustainability performance evaluation for Taiwanese Certified Public Accountant firms
TL;DR: Based on interviews with partners of Taiwanese certified public accountant firms, the authors finds that Client is the most important factor, followed by Internal processes, Learning and growth, and then Finance. But the empirical result shows that client orientation rather than price-cutting may be a right strategy.
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A comparison of the technical efficiency of accounting firms among the US, China, and Taiwan under the framework of a stochastic metafrontier production function
Abstract: This study employs the newly developed stochastic metafrontier production function by Huang et al. (A new approach to estimating the metafrontier production function based on a stochastic frontier framework. Working paper, Vanderbilt University, National Cheng-chi University, Taiwan, 2012) to compare the technical efficiencies of accounting firms (AFs) among the US, China, and Taiwan, operating under different technologies. Although AFs play an important role in a nation’s capital market, the accounting industry has not attracted much attention to academic researchers. The main difference between the stochastic metafrontier function and the one proposed by Battese et al. (J Prod Anal 21:91–103, 2004) and O’Donnell et al. (Empir Econ 34:231–255, 2008) lies in the second step, where the stochastic frontier approach (SFA) is recommended instead of programming techniques. Taiwan’s AFs are found to have the highest average metafrontier technical efficiency (MTE) and AFs in the US have the highest technology gap ratio (TGR). Nonetheless, the average TGR and MTE values of American AFs are closer to those of Taiwan. The low performance of Chinese AFs may be attributed to government regulations and the lack of market competition. However, the programming technique suggests reverse results for AFs in Taiwan and the US and larger variances for TGR and MTE. Then these three countries’ AFs show decreasing returns to scale, indicating that mergers and acquisitions may not be advantageous for expanding their production scale.
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Does intellectual capital matter? assessing the performance of CPA firms based on additive efficiency decomposition DEA
TL;DR: This study analyzed the "Cost efficiency" and "Revenue efficiency" of 207 certified public accountant firms in Taiwan by using the additive efficiency decomposition DEA approach and found that IC played an important role in performance representation both in cost efficiency and revenue efficiency.
The introduction of the law on external audit and its impacts on the auditing profession in Vietnam
TL;DR: In this article, the authors tried to identify the government's motivations for the introduction of the Law on External Audit (2011) in Vietnam, in particular the law on external audit (2011).
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Productivity Analysis of UK Auditing Firms
TL;DR: In this paper, the authors analyzed the productivity change in the United Kingdom (UK) of auditing firms over the period 2005-2012, using a Malmquist index with a technological bias.
References
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Journal ArticleDOI
Measuring the efficiency of decision making units
TL;DR: A nonlinear (nonconvex) programming model provides a new definition of efficiency for use in evaluating activities of not-for-profit entities participating in public programs and methods for objectively determining weights by reference to the observational data for the multiple outputs and multiple inputs that characterize such programs.
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Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis
TL;DR: The CCR ratio form introduced by Charnes, Cooper and Rhodes, as part of their Data Envelopment Analysis approach, comprehends both technical and scale inefficiencies via the optimal value of the ratio form, as obtained directly from the data without requiring a priori specification of weights and/or explicit delineation of assumed functional forms of relations between inputs and outputs as mentioned in this paper.
Book
Data Envelopment Analysis: A Comprehensive Text with Models, Applications, References and DEA-Solver Software
TL;DR: In this article, the basic CCR model and DEA models with restricted multipliers are discussed. But they do not consider the effect of non-discretionary and categorical variables.
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The pricing of audit services - theory and evidence
TL;DR: In this paper, the authors provide evidence from a test of the hypothesis that price competition prevails throughout the market for the audits of publicly held companies, irrespective of the share of a market segment which is serviced by the Big Eight firms.
Journal ArticleDOI
Auditor brand name reputations and industry specializations
TL;DR: In this paper, the authors found that industry expertise is a dimension of the demand for higher quality Big 8 audits and a basis for within Big 8 product differentiation, and that on average, industry specialist Big 8 auditors earn a 34% premium over nonspecialist Big Eight auditors.