Auditing Section Research Summaries Space

A Database of Auditing Research - Building Bridges with Practice

This is a public Custom Hive  public

Posts

  • Jennifer M Mueller-Phillips
    A Contemporary Analysis of Accounting Professionals'...
    research summary posted April 18, 2016 by Jennifer M Mueller-Phillips, tagged 05.0 Audit Team Composition, 05.04 Staff Hiring, Turnover and Morale 
    Title:
    A Contemporary Analysis of Accounting Professionals' Work-Life Balance.
    Practical Implications:

    This study offers (1) insights into how different types of accountants perceive work-life balance and alternative work arrangements (which are supposed to fix the work-life imbalance) and (2) advice from accountants on how firms can make alternative work arrangements more effective. The findings of this study may be useful to public accounting firms (employers in industry) that wish to understand their employees’ perceptions of work-life balance and potentially implement changes to enhance their employees’ actual work-life balance.

    Citation:

    Buchheit, S., D.W. Dalton, N.L. Harp, and C.W. Hollingsworth. 2016. A Contemporary Analysis of Accounting Professionals' Work-Life Balance. Accounting Horizons 30 (1): 41-62.

    Keywords:
    work-life balance, work-family conflict, burnout, alternative work arrangements
    Purpose of the Study:

    Work-life balance is not only the biggest driver of job satisfaction among accountants, but it also has important implications for audit quality and the supply of accountants. Despite its importance, little research has investigated how accountants, employed in various settings, perceive work-life balance (e.g., work-family conflict and job burnout) as well as support for and viability of the alternative work arrangements that are reputed to encourage better work-life balance. The authors address this gap by studying differences in such perceptions between accountants working in (1) Big 4 versus non-Big 4 firms, (2) audit versus tax, and (3) public accounting versus industry. This research not only provides a snapshot of how current accountants, employed in various settings, view work-life balance, but also provides a baseline against which the authors can compare future views of work-life balance.

    Design/Method/ Approach:

    The authors use data from two sources. First, the authors administer a survey to certified public accountants to obtain their perceptions of work-family conflict, job burnout, support for alternative work arrangements, and viability of alternative work arrangements. Second, the authors administer another open-ended survey to a different set of certified public accountants to obtain suggestions for how firms can improve employees’ work-life balance.

    Findings:
    • Support for alternative work arrangements lowers employee burnout, partly by decreasing work-family conflict.
    • Firm Size: Work-family conflict and employee burnout is higher among accountants at Big 4 (mid-sized) firms than their counterparts at mid-sized (local) firms. Big 4 accountants report lower viability of alternative work arrangements than their counterparts at mid-sized firms and local firms.
    • Gender: Work-family conflict is similar between male and female accountants. Male accountants report lower support for and lower viability of alternative work arrangements than female accountants.
      • More female than male accountants report previously utilizing alternative work arrangements. Accountants who report utilizing alternative work arrangements also report higher support for and viability of alternative work arrangements.
    • Rank: Accountants at higher ranks have lower employee burnout than their counterparts at lower ranks. Higher ranking accountants report higher support for and lower viability of alternative work arrangements than lower rankings accountants.
    • Role: Accountants working in audit, tax, and other roles experience similar levels of work-family conflict and employee burnout, as well as support for and viability of alternative work arrangements.  
    • Public vs. Private Sector: Work-family conflict is higher among public accountants than those working in industry. Meanwhile, accountants working at Big 4 firms have higher employee burnout than accountants in industry, accountants working at local firms or as sole practitioners have lower burnout than accountants in industry, and accountants working at mid-sized firms have the same levels of employee burnout as accountants in industry. Furthermore, accountants working in public accounting report higher support for alternative work arrangements than their counterparts working in industry. However, compared to accountants in industry, accountants working at mid-sized firms and local firms report higher viability of alternative work arrangements, but accountants working at Big 4 firms report lower viability of alternative work arrangements.
    • Accountants consider improving work-life balance the best way for firms to improve retention of high-quality employees. Accountants suggest that firms can make alternative work arrangements more effective by:
      • creating greater peer and supervisor support,
      • rating employees on productivity instead of visibility,
      • educating employees more about alternative work arrangements, 
      • keeping promises regarding alternative work arrangements,
      • providing balanced role models and mentors,
      • recognizing that younger employees value work-life balance,
      • offering mini-sabbaticals to employees, and
      • offering other programs to facilitate work-life balance.
    Category:
    Audit Team Composition
    Sub-category:
    Staff Hiring - Turnover & Morale
  • Jennifer M Mueller-Phillips
    A Post-SOX Examination of Factors Associated with the Size...
    research summary posted October 31, 2013 by Jennifer M Mueller-Phillips, tagged 01.0 Standard Setting, 01.05 Impact of SOX, 05.0 Audit Team Composition, 05.04 Staff Hiring, Turnover and Morale, 13.0 Governance, 13.01 Board/Audit Committee Composition 
    Title:
    A Post-SOX Examination of Factors Associated with the Size of Internal Audit Functions
    Practical Implications:

    This study provides insights that should be useful for CAEs and boards of directors (or audit committees) in discussions related to (1) internal audit philosophy regarding its potential contributions to an organization, (2) alternative staffing models, (3) resource allocation, and (4) embracement of audit technology. The study could also help guide external auditors’ evaluation of client internal audit functions. The authors find that the mission of internal audit functions differs from organization to organization. Additionally, the results suggest that internal audit functions used for leadership development purposes (i.e., a rotational staffing strategy) are larger, presumably because the staff have less experience and staff are rotating in and out of the department more frequently. Finally, these findings help illustrate the importance of internal audit proving that it is ‘‘value added’’ to the organization. Management and audit committees are often looking for more than financial statement compliance, and those internal audit functions that have responded to these greater needs are rewarded with more resources, likely because they are perceived to deliver more value.

    For more information on this study, please contact Karla Johnstone.
     

    Citation:

    Anderson, U. L., M. H. Christ, K. M. Johnstone, and L. E. Rittenberg. 2012. A Post-SOX Examination of Factors Associated with the Size of Internal Audit Functions. Accounting Horizons 26(2): 167-191

    Keywords:
    Internal Audit; resource allocation; budgeting; staffing.
    Purpose of the Study:

    Internal auditing is a key element of an organization’s governance, risk management, and internal control structure. However, many organizations struggle to know if the investments they make in the internal audit function are appropriate and use size benchmarking data (e.g., firm assets, revenues, number of employees) to determine if internal audit is appropriately sized. However, benchmark data fails to incorporate other factors that influence internal audit size such as the effectiveness and efficiency of an internal audit function, the scope of the internal audit mission, or internal audit objectives and staffing strategies. Therefore, the objectives of the study include the following:

    • Develop and test a conceptual model that articulates the factors associated with internal audit size in the contemporary post-SOX era. The model includes four determinants of internal audit size: (1) audit committee characteristics, (2) internal audit characteristics and mission, (3) assurance activities performed by others (including internal audit outsourcing providers and assurance provided by other functions within the organization), and (4) organization characteristics.
    • Conduct an examination using contemporary post-SOX data in order to extend earlier related research on internal audit sizing by considering a variety of previously unexamined characteristics that differentiate internal audit functions from one another.
    • Examine the state of internal audit staffing in the post-SOX environment.
       
    Design/Method/ Approach:

    The authors collected data with which to test their model by first conducting field interviews with a variety of chief audit executives across a broad range of industries. The authors then distributed a survey to chief audit executives that are members of the Institute of Internal Auditors. The survey includes questions related to each of the four determinants of internal audit size (as mentioned above), as well as internal audit size based on number of internal audit personnel. The field interviews were conducted between August 2006 to November 2006 and the survey was conducted from August 2007 and October 2008.

    Findings:

    The authors find that internal audit size is positively associated with:

    Audit Committee Characteristics:

    • the size of the audit committee;
    • the frequency of audit committee meetings with the CAE
    • audit committee review and approval of the internal audit budget.

    Internal Audit Characteristics and Mission:

    • CAE tenure in the organization;
    • performance of IT auditing;
    • the use of a staffing model in which internal audit is used for rotational leadership development
    • the use of sophisticated audit technology.

    Organization Characteristics:

    • the total assets of the organization
    • the number of foreign subsidiaries that the organization possesses.


    Further, the authors find that internal audit size is inversely associated with:

    Internal Audit Characteristics and Mission:

    • the percent of audit staff designated as Certified Internal Auditors.

    Internal Audit Activities Performed by Others:

    • the extent of internal audit activities outsourced to a third party.
    Category:
    Audit Team Composition, Governance, Standard Setting
    Sub-category:
    Board/Audit Committee Composition, Impact of SOX, Staff Hiring - Turnover & Morale
  • The Auditing Section
    A Theoretical Framework of the Relationship between Public...
    research summary posted May 9, 2012 by The Auditing Section, tagged 05.0 Audit Team Composition, 05.04 Staff Hiring, Turnover and Morale 
    Title:
    A Theoretical Framework of the Relationship between Public Accounting Firms and Their Auditors
    Practical Implications:

    The model developed by the authors provides a theoretical foundation for understanding and exploring issues related to CPA firm and auditor employee behavior in the public accounting environment. Most important, the framework identifies factors impacting both what firms should provide to their CPA employees and how the employees may value what is provided. For example, the compensation package received by employees should include not only salaries and benefits, but also the opportunities for future development, flexibility of work and personal satisfaction.

    Citation:

    Almer, E. D., J. L. Higgs, and K. L. Hooks. 2005.  A Theoretical Framework of the Relationship between Public Accounting Firms and Their Auditors. Behavioral Research in Accounting 17: 1-22.

    Purpose of the Study:

    The behavior of auditors employed by public accounting firms has drawn significant attention.  Prior accounting research explains and predicts auditor behavior in the work environment, such as socialization, turnover, expertise and audit quality reduction acts. However, none has developed an overall model of the auditor-public accounting firm employment relationship. The primary purpose of this study is to provide a model for the auditor-public accounting firm employment relationship, and to identify how auditing professionals contribute and what they receive as a result of their work efforts, as well as influences on those work efforts.

    Design/Method/ Approach:

    Not applicable, it is a theoretical paper.

    Findings:

    Propositions

    • An employment contract represents the relationship between a CPA firm employer and an employee. The value of the CPA-
      employee provided professional work received by the CPA firm should be equal to the compensation package received by the CPA employee.
    • Some factors can influence the value received by the CPA firms, such as the value of the CPA employees’ professional work, or some inefficiency due to temporary interruptions of work, and labor market forces. Also, the compensation package should include salary, benefits, development, flexibility, deferred compensation, and satisfaction of personal preferences.
    • The two parties of an employment contract may not well understand the nature of multidimensional job activities of an auditor, as well as how they are valued, communicated and measured.
    • It is unclear how CPA firms incorporate the temporary interruptions of work into the employment contracts and how interruptions may or may not benefit the firm and the auditors.
    • Salary and traditional benefits are not the only compensation received by auditors.
    • The value placed on professional development is unknown and influenced by various factors, and may differ between the auditor and the firm.
    • The value placed on flexibility is influenced by the personal needs of the auditor and confidence in the firm’s information system.
    • The value placed on deferred compensation is unknown and influenced by unspecified factors, and differs between the parties to the contract.
    • Satisfaction of personal preferences is necessary to the auditor, but the personal preferences are ill-defined and thus may not be properly valued or explicitly recognized in the employment contract.
    Category:
    Audit Team Composition
    Sub-category:
    Staff Hiring - Turnover & Morale
    Home:
    home button
  • The Auditing Section
    Accountants’ Commitment to Their Profession: Multiple D...
    research summary posted May 9, 2012 by The Auditing Section, tagged 05.0 Audit Team Composition, 05.04 Staff Hiring, Turnover and Morale 
    Title:
    Accountants’ Commitment to Their Profession: Multiple Dimensions of Professional Commitment and Opportunities for Future Research
    Practical Implications:

    This paper studies professional commitment and is of importance to practitioners. The results contribute to a greater understanding of how accountants’ professional commitment forms. Most importantly, it helps practitioners to better understand how the combination of an accountant’s professional commitment and other factors influence work related outcomes (e.g. work performance, turnover intentions, job satisfaction, ethical development, etc.).

    Citation:

    Hall, M., D. Smith, and K. Langfield-Smith. 2005.  Accountants’ Commitment to Their Profession: Multiple Dimensions of Professional Commitment and Opportunities for Future Research. Behavioral Research in Accounting 17: 89-109.

    Purpose of the Study:

    Professional commitment (PC) refers to the attachments that individuals form to their profession. Since PC has been linked to important outcomes such as improved work performance, reduced turnover intentions, and greater satisfaction at both the organizational and professional levels, it is very important to develop a more complete understanding of individuals’ PC. Professional Commitment consists of three dimensions, including affective PC (of or relating to experience of feeling or emotion), continuance PC, and normative PC. The primary purpose of this study is to examine the different dimensions of PC, how they develop, and how they affect accountants’ professional and organizational outcomes.

    Design/Method/ Approach:

    Not applicable; this is a review paper.

    Findings:
    • Affective PC leads one to willingly stay in his/her profession. Continuance PC leads one to stay in the profession because of the high costs associated with leaving. Normative PC leads one to remain in the profession out of a sense of obligation.
    • The factors which affect affective PC include job level, personal characteristics (personality type and ethical orientation), organizational characteristics (work environment such as public accounting, private industry, or government), and situational factors (e.g. satisfaction with rewards). Affective PC together with job and professional satisfaction influence employees’  urnover intentions, organizational-professional conflict, and ethical attitudes and decision making.
    • Examining multiple dimensions of PC may provide a more complete understanding of an individual’s commitment to his/her profession.
    Category:
    Audit Team Composition
    Sub-category:
    Staff Hiring - Turnover & Morale
    Home:
    home button
  • Jennifer M Mueller-Phillips
    Antecedents and Consequences of Perceived Gender...
    research summary posted September 17, 2015 by Jennifer M Mueller-Phillips, tagged 05.0 Audit Team Composition, 05.04 Staff Hiring, Turnover and Morale, 05.10 Impact of Diversity - e.g., gender - on Group Decision Making 
    Title:
    Antecedents and Consequences of Perceived Gender Discrimination in the Audit Profession.
    Practical Implications:

    The authors’ findings provide public accounting firms with critical factors that can enhance gender equality. Specifically, the findings indicate that (1) firms that offer more support from organizational leaders, (2) firms that provide higher levels of support for alternative work arrangement initiatives, and (3) firms that provide stronger ethical climates are each negatively associated with perceived gender discrimination, suggesting that organizational climate factors have a strong impact on female auditors’ perceptions of gender equality. The findings suggest that female accounting professionals must reach high-status positions within the organizational structure to substantively influence perceptions of gender equality. Public accounting firms should encourage formal and informal mentoring relationships targeting female auditors. 

    Citation:

    Dalton, D. W., J. R. Cohen, N. L. Harp, and J. J. McMillan. 2014. Antecedents and Consequences of Perceived Gender Discrimination in the Audit Profession. Auditing: A Journal of Practice & Theory 33 (3): 1-32.

    Keywords:
    alternative work arrangements, audit profession, ethical climate, female partners, gender discrimination, organizational citizenship behavior, turnover intentions
    Purpose of the Study:

    The purpose of this study is to examine the effects of workgroup composition factors and organizational climate factors on perceived gender discrimination, along with the impact of perceived gender discrimination on several critical organizational outcomes. The authors test a theoretical model of perceived gender discrimination in order to;

    1. Advance theory development within gender-based research in accounting, 
    2. Stimulate future research related to gender equality in the audit profession,
    3. Provide public accounting firms with critical insights regarding the factors that contribute to gender inequality, and
    4. Highlight adverse organizational outcomes associated with gender discrimination in the audit profession.

    Turnover of female auditors leads to a loss of expertise, which, in turn, can reduce audit quality, leading to adverse organizational outcomes. In addition, recent evidence suggests that female audit partners more effectively constrain earnings management by their clients; however, female auditors are more likely than male auditors to leave public accounting prior to reaching the partner level. Therefore, gaining a better understanding of how perceptions of gender equality impact female auditors’ turnover intentions is particularly important. Existing research suggests that organizations that promote gender equality and gender diversity engender high-quality teamwork environments that foster creativity and innovation, resulting in higher levels of organizational performance. Therefore, given the relative importance of high-quality teamwork environments in the audit profession, the authors seek to gain a better understanding of the factors that impact perceptions of gender equality in the audit profession.

    Design/Method/ Approach:

    This paper tests a model of perceived gender discrimination in the audit profession. The authors obtained mailing lists of female CPAs from the Boards of Accountancy in Ohio, Oklahoma, Oregon, Tennessee, and Washington. Using both email and mail requests, the authors gathered a sample of 234 female auditors employed in public accounting firms. From the mail requests, the authors received a 17.1 percent response rate. From the email requests, the authors received an 8.1 percent response rate.

    Findings:

    The results indicate that female auditors report lower levels of gender discrimination when employed:

    1. In firms with more female partners,
    2. In firms with stronger ethical climates,
    3. In firms that are more supportive of alternative work arrangements, and
    4. In firms that provide higher levels of top management support for the personal well-being of their employees.
    • The findings indicate that while female coworker compositions do not impact female auditors’ perceptions of gender discrimination, female partner compositions can, in fact, increase perceptions of gender equality.
    • These results suggest that it is not sufficient for firms to simply hire/retain more females at the staff, senior, and manager levels; instead, the proportion of female auditors in partner positions within the organizational structure must increase to substantively enhance perceptions of gender equality.
    • The results indicate that public accounting firms can impact perceptions of gender equality by cultivating specific organizational climates.
    • The authors find that perceived gender discrimination is directly associated with higher turnover intentions, thereby providing additional motivation for the promotion of gender equality within the audit profession.
    Category:
    Audit Team Composition
    Sub-category:
    Impact of Diversity (e.g. gender) on Group Decision Making, Staff Hiring - Turnover & Morale
  • Jennifer M Mueller-Phillips
    Attracting Applicants for In-House and Outsourced Internal...
    research summary posted April 18, 2016 by Jennifer M Mueller-Phillips, tagged 05.0 Audit Team Composition, 05.04 Staff Hiring, Turnover and Morale, 08.0 Auditing Procedures – Nature, Timing and Extent, 08.11 Reliance on Internal Auditors, 13.0 Governance, 13.07 Internal auditor role and involvement in controls and reporting 
    Title:
    Attracting Applicants for In-House and Outsourced Internal Audit Positions: Views from External Auditors.
    Practical Implications:

    This study offers insights into why internal auditing is experiencing a shortage of qualified job candidates and offers a potential solution to the problem. The authors find that external auditors have negative perceptions about internal auditing, and these negative perceptions are associated with a (1) decreased desire to apply for internal auditing positions, (2) lower likelihood of recommending an in-house internal auditing career to high-performing students, and (3) higher likelihood of recommending an in-house internal auditing career to mediocre students. Internal auditors can try solving this problem by improving perceptions about internal auditing via a media campaign that raises awareness about the true internal audit career path.

    Citation:

    Bartlett, G.D., J. Kremin, K.K. Saunders, and D.A. Wood. 2016. Attracting Applicants for In-House and Outsourced Internal Audit Positions: Views from External Auditors. Accounting Horizons 30 (1): 143-156.

    Keywords:
    internal audit, hiring decisions, outsourcing, external auditors
    Purpose of the Study:

    The internal audit function can help organizations strengthen their risk management and corporate governance, yet the demand for qualified candidates to fill internal audit job openings exceeds the supply of interested applicants. Consequently, the internal audit function may find itself short-staffed and/or staffed with lower quality candidates, which may limit its ability to add value to the organization. In order to correct this problem, it is important to fully understand its scope and its root cause(s). Prior research attempting to gain this understanding has focused on investigating how accounting students’ beliefs about internal audit impact their interest to pursue an internal audit career. The authors of this paper extend this research by:

    • Investigating how external auditors’ beliefs about internal audit impact (1) their interest to pursue an internal audit career and (2) their recommendations to students about pursuing an internal audit career,  
    • Investigating differences in external auditor’s perceptions of in-sourced versus out-sourced internal audit, and
    • Asking external auditors to suggest what needs to be done to improve their perceptions of internal audit.
    Design/Method/ Approach:

    The authors use data from three sources. First, the authors performed an experiment using experienced external auditorsmostly seniors or associateswho were asked whether they would apply for a job described as either an accounting, in-house internal audit, or outsourced internal audit position. Second, the authors performed another experiment using experienced external auditorsmostly managers or directorswho were asked whether they would recommend that a high-performing (mediocre performer) student pursue an external audit, in-house internal audit, or outsourced internal audit career. Third, the authors surveyed high-ranking former/current external auditors who never worked in internal audit about what would make internal auditing a more appealing career for them.

    Findings:
    • When the same job opening is labeled as either accounting, in-house internal auditing, or outsourced internal auditing, the accounting label is likely to attract two times as many external auditor applicants as the other two labels.
    • External auditors are equally willing to apply for in-house internal auditing or outsourced internal auditing positions.
    • External auditors have more negative perceptions of in-house internal auditors than outsourced internal auditors.
    • External auditors have negative perceptions of the internal auditing profession. They believe that (1) others have negative stereotypes about the profession, (2) business professionals do not respect internal auditors, and (3) internal auditors do boring work.
    • Those less interested in applying for internal audit jobs have negative perceptions of internal auditing.
    • The average external auditor willing (unwilling) to apply for an internal audit position would want to receive at least 124% (149%) of his current salary before being willing to switch from his current external audit job to an internal audit job.  
    • External auditors will be most likely to recommend that top-performing students work in external audit and mediocre students work in in-house internal audit.
    • External auditors will equally recommend that top-performing students and mediocre students should consider outsourced internal audit as a second best career path.
    • External auditors have more negative perceptions of outsourced internal auditing than external auditing on most dimensions, except in regards to work-life balance. They believe that work-life balance is better for outsourced internal auditors.
    • Current and former external auditors believe that internal auditing could become more appealing if internal auditors do more interesting work, receive more respect, perform value-added tasks, receive better compensation, and have better promotion opportunities. Because internal auditors appear to already be following these suggestions, internal auditors may benefit from giving others a better understanding of internal audit careers.
    Category:
    Audit Team Composition, Auditing Procedures - Nature - Timing and Extent, Governance
    Sub-category:
    Internal auditor role and involvement in controls and reporting, Reliance on Internal Auditors, Staff Hiring - Turnover & Morale
  • Jennifer M Mueller-Phillips
    Audit and Tax Career Paths in Public Accounting: An Analysis...
    research summary posted February 24, 2015 by Jennifer M Mueller-Phillips, tagged 05.0 Audit Team Composition, 05.04 Staff Hiring, Turnover and Morale 
    Title:
    Audit and Tax Career Paths in Public Accounting: An Analysis of Student and Professional Perceptions
    Practical Implications:

    Competition for talent that requires students to make a professional career-track choice at an increasingly early stage in their development can lead to harmful “job market unraveling” that has been observed in other professional fields (e.g., law, medicine).  To the extent aspiring public accountants can make well-informed career track decisions, individuals and public accounting firms should benefit from improved person-job fit.  In this study, we provide systematic survey evidence about tax versus audit career alternatives which should be helpful to future accounting professionals.  We also note that ‘career track choice prior to internship’ appears to be an increasingly prevalent aspect of the public accounting labor market that would benefit from additional research.

    For more information on this study, please contact Derek W. Dalton.

    Citation:

    Dalton, D. W., S. Buchheit and J.J. McMillan. 2014. Audit and Tax Career Paths in Public Accounting: An Analysis of Student and Professional Perceptions.  Accounting Horizons 28 (2): 213-231

    Keywords:
    Theory of Planned Behavior; person-job fit; career choice; audit versus tax
    Purpose of the Study:

    Accounting students increasingly select their public accounting career path, either the audit or tax ‘track’, during university study.  Frequently, a career track decision is made prior to a public accounting internship.  We wanted to learn (1) how students make this important career decision and (2) whether the factors important to students’ audit vs. tax career choice seemed reasonable based on the perceptions of practicing accounting professionals.  In short, we wanted to learn whether students’ employment expectations matched professionals’ perceptions of job reality.

    Design/Method/ Approach:

    We gathered initial perceptions using a survey involving Masters of Accounting students during the fall of 2011.  Results helped us develop a relatively comprehensive survey for 171 upper-level accounting students at two large public universities during spring semester 2012.  The upper-level students largely had not yet made a ‘career track’ decision.  During the summer of 2012, we provided a similar survey to 310 public accounting professionals who had, on average, 10 years of work experience.  Respondents were evenly split as to professional track and were distributed across a wide distribution of employers (e.g., Big 4, national, regional, and local firms).

    Findings:

    Student career path choice is associated with students’ perceptions of job characteristics such as

    • Professional travel requirements,
    • Expected amount of client interaction, and
    • Long-term career opportunities in industry

    In large part, student perceptions agreed with those of practicing professionals; however, career misconceptions were noted.  Contrary to evidence from practicing professionals, students believed that:

    • Tax is less ambiguous than audit,
    • Tax is more difficult than audit, and
    • Auditors are more extroverted than tax professionals.
    Category:
    Audit Team Composition
    Sub-category:
    Staff Hiring - Turnover & Morale
  • Jennifer M Mueller-Phillips
    Characteristics of Relatively High-Performance Auditors
    research summary posted October 29, 2013 by Jennifer M Mueller-Phillips, tagged 05.0 Audit Team Composition, 05.04 Staff Hiring, Turnover and Morale, 11.0 Audit Quality and Quality Control, 11.01 Supervision and Review – Effectiveness 
    Title:
    Characteristics of Relatively High-Performance Auditors
    Practical Implications:

    The findings of this article have implications important to both accounting firms and auditors. If pertinent behavioral skills can be learned, auditors could increase their level of performance by engaging in training to enhance those skills. CPA firms could benefit from identifying characteristics that lead to higher job performance by making those characteristics a focus in the process of hiring personnel. Existing firm employees could emphasize their understanding of the importance of taking a more comprehensive view of the auditing profession and CPA firms could emphasize hiring employees that exemplify a balance of task-oriented aspects, personality aspects, and a willingness to extend standardized tasks to ensure high auditor performance.

    For more information on this study, please contact Constance A. McKnight.
     

    Citation:

    McKnight, C.A., and W.F. Wright. 2011. Characteristics of relatively high-performance auditors. Auditing: A Journal of Practice and Theory 30 (1): 191-206.

    Keywords:
    job performance; tacit knowledge; task structure; locus of control; expertise.
    Purpose of the Study:

    The job performance of auditors is a main driver of the quality of financial statement audits. Accordingly, audit firms find it appropriate to give auditors performance evaluations to maintain audit quality. This study examines the characteristics of relatively high-performance auditors to assess how the determinants of auditor job performance have evolved from concentration on the quality of judgments made based on technical knowledge and ability to a more overall view of performance which includes tacit knowledge on a broad set of performance attributes. The following are the three possible characteristics of higher-performance auditors that the authors chose to assess:

     

    • Ability to identify  technical knowledge and ability, client interaction skills, and professional attitudes and behaviors as more relevant
    • Higher inclination to extend the standard audit procedures
    • A more proactive and involved internal locus of control i.e., the extent to which a person chooses to be involved with, and influence, a process leading to an eventual outcome.
       
    Design/Method/ Approach:

    This study was conducted using directly reported CPA firm performance evaluations from public accounting firms including the ranks of staff auditor, senior, and manager. The two most recent supervisor-assessed performance evaluations and annual compensation were used. Additionally, auditors provided self-assessments of their performance over the same period. The data was gathered prior to 2011.

    Findings:
    • Higher performing auditors exhibited higher technical knowledge and ability and they placed and emphasis on client interaction skills as well as professional attitudes and behaviors compared to low performers.
    • Auditors who did not rely on standard audit procedures and were more inclined to extend those procedures performed at higher levels than auditors that were more inclined rely on the standard procedures.
    • When auditors are more proactive regarding the performance of audit judgment tasks and decisions i.e. have more of an internal locus of control, they will be associated with a better job performance.
    • Secondary Findings:
      • The relatively high-performance auditors indicated significant awareness of their superior performance in their self-reported performance evaluations indicating confidence in high-performers.
      • Although, compensation varies according to rank and is higher at larger firms, the authors found that firm-reported job performance evaluations do have an impact on auditor compensation.
         
    Category:
    Audit Quality & Quality Control, Audit Team Composition
    Sub-category:
    Staff Hiring - Turnover & Morale, Supervision & Review – Effectiveness
  • The Auditing Section
    Mentoring and turnover intentions in public accounting...
    research summary posted May 4, 2012 by The Auditing Section, tagged 05.0 Audit Team Composition, 05.04 Staff Hiring, Turnover and Morale 
    Title:
    Mentoring and turnover intentions in public accounting firms: A research note
    Practical Implications:

    The results of this study are important for audit firms to consider when designing their mentoring processes.  The evidence indicates that psychological mentoring programs can decrease employee turnover intentions, and that the career development mentoring can actually result in increased turnover intentions.  The latter is most likely a result of the mentee developing skills and experiences that can make the employee a more desirable candidate for employment opportunities outside of the firm.   However, the authors suggest that both types of mentoring (career development and psychological support) are important for the development of younger staff members.  They suggest that firms should be sensitive to the possible outcomes of each of these mentoring programs and that mentors be made aware of the potential effects before starting mentoring relationships.  This awareness could help mentors anticipate any of the potentially negative aspects of career development mentoring.

    Citation:

    Hall, M. and D. Smith. 2009. Mentoring and turnover intentions in public accounting firms: A research note. Accounting, Organizations and Society 34 (6): 695-704

    Keywords:
    Mentoring, turnover intentions, job satisfaction, psychological support, career development support, procedural justice, affective organizational commitment, psychological empowerment
    Purpose of the Study:

    During the recent years, public accounting firms have begun to foster and utilize mentoring relationships in which less experienced staff members (mentees) are paired with more experienced staff members (mentors).  One goal of these initiatives is to increase staff retention by focusing on two primary aspects of mentoring relationships: 

    • Career development support, which primarily focuses on helping the mentee to advance through the ranks of the firm by encouraging learning and facilitating membership on teams for important assignments
    • Psychological support, which primarily focuses on serving as a role model, providing friendship, and offering a venue to share personal experiences with the mentee.  

    Since previous research has only examined the implications of the existence of a mentoring program on turnover intentions, the authors conducted this study to determine if the different aspects of a mentoring program can have separate or distinct impacts on a person’s intent to leave the firm.  The authors also consider if the different types of mentoring have indirect effects on mentees’ intention to leave the firm.  An indirect effect occurs if the mentoring program impacts how accountants view their respective firms, and these perceptions then lead to turnover intentions.  Examples of these perceptions include the following: 

    • Psychological empowerment, which is the perception of individuals’ abilities, the intrinsic value of their work tasks, and the role that they can have over work productivity and workplace policies.
    • Procedural justice, which is the perception of how fairly individuals are treated by organizational policies and practices
    • Affective organizational commitment, which refers to individuals’ emotional attachment to the organization.
    Design/Method/ Approach:

    The research evidence is collected prior to 2009.  The authors use a group of accountants below partner level from seven Australian public accounting firms (one Big 4 firm and six middle-tier firms). Each participant completed a survey which was distributed by a representative of their accounting firm.  The surveys utilized to gather the data were based on surveys that were previously developed and utilized in conducting similar research conducted in other disciplines.

    Findings:
    • The authors find that career development support is associated with higher levels of psychological empowerment, which leads to higher levels of turnover intentions. 
    • The authors find that psychological support is associated with higher levels of both procedural justice and affective organizational commitment.  Each of these are then associated with lower levels of turnover intentions.
    • The authors find that while specific mentoring behaviors affect job satisfaction and turnover, the mere existence/absence of a mentor has no effect.  This emphasizes the importance of considering the nature of a mentoring relationship.
    Category:
    Audit Team Composition
    Sub-category:
    Staff Hiring - Turnover & Morale
    Home:
    home button
  • The Auditing Section
    Organizational justice and turnover in public accounting...
    research summary posted May 3, 2012 by The Auditing Section, tagged 05.0 Audit Team Composition, 05.04 Staff Hiring, Turnover and Morale 
    Title:
    Organizational justice and turnover in public accounting firms: A research note
    Practical Implications:

    The results of this study are important for audit firms to consider when designing their employee evaluation processes which determine promotions and pay increases.  The evidence indicates that if employees perceive that the process is unfair and biased, they will be less committed to the accounting firm and that they will experience lower levels of job satisfaction.  The evidence also suggests that as employees experience lower levels of commitment to the accounting firm, they will be more likely to consider exploring employee opportunities outside of the accounting firm. Therefore, the authors suggest that accounting firms may be able to partially increase employee commitment to the firm by maintaining a fair process for determining promotions and pay increases, and this increase in commitment may result in decreased turnover.

    Citation:

    Parker, R. J. and J. M. Kohlmeyer III. 2005. Organizational justice and turnover in public accounting firms: a research note. Accounting, Organizations and Society 30 (4): 357-369

    Keywords:
    Perceived discrimination, job satisfaction, staff promotion and compensation, organizational justice, organizational commitment, turnover intentions
    Purpose of the Study:

    This study considers the relationship between “organizational justice” which is employees’ perceptions of how fairly they are being treated by their employer and “turnover intentions” which refers to employees’ intentions to leave their existing employer.     

    Even though previous research conducted within the management discipline has considered the effects of employee perceptions of organizational justice, very little research has been conducted on organizational justice in accounting settings.  Therefore, the authors developed a theoretical model that could explain how organizational justice and turnover intentions could impact a public accounting firm.  The theoretical model predicts that employees who perceive the firm’s process for determining promotions and raises to be biased will experience higher levels of “perceived discrimination” which, in turn, leads to lower levels of job satisfaction.  These individuals should also experience lower levels of “affective organizational commitment,” which can be described as the following: 

    • A strong belief in the goals or values of the organization
    • A willingness to exert effort for the organization
    • A strong desire to continue to be part of the organization 

    The authors also consider that lower levels of job satisfaction and organizational commitment will be associated with higher levels of turnover intentions. 

    Design/Method/ Approach:

    The research evidence is collected prior to 2005.  The authors use a group of accountants from offices of three Big 5 firms in one Canadian metropolitan area.  Participants completed a survey which was distributed by a representative from each of the firms.  The surveys utilized to gather the data were based on surveys that were previously developed and utilized in conducting similar research in other disciplines.

    Findings:
    • The authors find that increases in the level of perceived discrimination is associated with lower levels of job satisfaction and lower levels of organization commitment. 
    • The authors find that lower levels of organizational commitments are associated with greater employee turnover intentions.  However, changes in the level of job satisfaction are not associated with changes in employees’ intentions to leave the firm.

     

    Category:
    Audit Team Composition
    Sub-category:
    Staff Hiring - Turnover & Morale
    Home:
    home button

Filter by Type

Filter by Tag