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This study investigates the relation between the line of service (audit, tax, advisory) of Big Four office managing partners (OMPs) and both non-audit service fees and audit quality. Given that audit quality has been shown to vary across offices and

This study investigates the relation between the line of service (audit, tax, advisory) of Big Four office managing partners (OMPs) and both non-audit service fees and audit quality. Given that audit quality has been shown to vary across offices and because changes in office-level leadership can impact the office culture, I examine the impact of the OMP’s line of service on non-audit service fees and audit quality. I find that when an accounting firm office changes leadership to an advisory OMP, non-audit service revenues increase while audit quality suffers. This finding is consistent with advisory partners encouraging an office culture that emphasizes selling non-audit services more than conducting quality audits. Overall, this study provides evidence consistent with regulators’ concerns that the recent trend toward greater advisory services at the largest accounting firms reduces their focus on providing high-quality audits, thereby leading to decreased audit quality.
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    Details

    Title
    • Office managing partners, non-audit services, and audit quality
    Contributors
    Date Created
    2016
    Resource Type
  • Text
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    Note
    • thesis
      Partial requirement for: Ph.D., Arizona State University, 2016
    • bibliography
      Includes bibliographical references (pages 42-47)
    • Field of study: Accountancy

    Citation and reuse

    Statement of Responsibility

    by Michael Mowchan

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