Office managing partners, non-audit services, and audit quality
Description
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.
Date Created
The date the item was original created (prior to any relationship with the ASU Digital Repositories.)
2016
Agent
- Author (aut): Mowchan, Michael
- Thesis advisor (ths): Kaplan, Steven E
- Committee member: Lamoreaux, Phillip T
- Committee member: Call, Andrew C.
- Publisher (pbl): Arizona State University