A Theoretical Framework of the Relationship between Public Accounting Firms and Their Auditors

2005 ◽  
Vol 17 (1) ◽  
pp. 1-22 ◽  
Author(s):  
Elizabeth Dreike Almer ◽  
Julia L. Higgs ◽  
Karen L. Hooks
Keyword(s):  
Future Research ◽  
Public Accounting ◽  
Accounting Firms ◽  
The Public ◽  
Sociology Of Professions ◽  
Rich Description ◽  
Public Accounting Firms ◽  
Current Article ◽  
The Relationship ◽  
Significant Attention

The behavior of auditors in the context of their employment by public accounting firms has received significant attention in the accounting literature. The current article extends this literature by providing a framework that identifies what auditing professionals contribute and receive as a result of their work efforts, as well as related influences. Using agency theory modified with fundamental ideas from the sociology of professions literature, we develop a model of the auditor-public accounting firm employment relationship. This framework is grounded in a timely, contextually rich description of the public accounting work environment, and the pressures and incentives faced by auditors. Propositions for future research are suggested that arise from understanding the auditor-firm relationship.

scholarly journals The Influence of Reputation of Public Accounting Firms on the Integrity of Financial Statements with Corporate Governance as the Moderating Variable

2018 ◽  
Vol 9 (3) ◽  
pp. 177-186 ◽  
Author(s):  
Nera Marinda Machdar ◽  
Dade Nurdiniah
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Institutional Ownership ◽  
Financial Statements ◽  
Financial Statement ◽  
Public Accounting ◽  
Accounting Firms ◽  
Accounting Firm ◽  
The Public ◽  
Public Accounting Firms

This research aimed to determine the effect of the reputation of the public accounting firm on the integrity of financial statements by including leverage and firm size as the control variables. This research also investigated the effects of corporate governance moderation that was proxied by the independent commissioner, institutional ownership, and audit committee in strengthening or weakening the reputation of the public accounting firms on the integrity of the financial statements. The population was manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2013-2015. The sample utilized the purposive sampling method and resulted in 34 manufacturing firms, so the total observations were 102 firms in all observed years. This research performed statistical data processing with EVIEWS 8. There are two main findings of this research. First, the reputation of public accounting firm affects the integrity of the financial statement. Second, corporate governance that utilizes the independent commissioners and institutional ownership strengthen the effect of the reputation of the public accounting firm on the integrity of the financial statement. However, corporate governance using audit committee weakens the reputation of the public accounting firm on the integrity of financial statements.

Materiality Guidance of the Major Public Accounting Firms

2014 ◽  
Vol 34 (2) ◽  
pp. 3-26 ◽  
Author(s):  
Aasmund Eilifsen ◽  
William F. Messier
Keyword(s):  
Data Availability ◽  
Future Research ◽  
Public Accounting ◽  
Accounting Firms ◽  
Public Accounting Firms ◽  
Qualitative Factors ◽  
Research And Education ◽  
High Level ◽  
Implementation Of Standards

SUMMARY This paper examines the materiality guidance for eight of the largest U.S. public accounting firms. Knowledge of how materiality guidance is integrated into a firm's methodology is important for accounting and auditing researchers as well as for practitioners, regulators, and educators. Our results show a high level of consistency across the firms in terms of the quantitative benchmarks (e.g., income before taxes, total assets or revenues, and total equity) used to determine overall materiality, the related percentages applied to those benchmarks, the percentages applied to overall materiality for determining tolerable misstatement, and what constitutes a clearly trivial misstatement. We also find that the firms' guidance for evaluating detected misstatements, including qualitative factors and firm guidance for group audits, is consistent across firms. However, there are differences in how the firms consider the possibility of undetected misstatements when evaluating detected misstatements. The results of this study provide important insights into implementation of standards and valuable information for future research and education. Data Availability: The data used are proprietary to the firms and are not available for distribution.

scholarly journals Pengaruh Tekanan Ketaatan, Pengetahuan, Dan Pengalaman Auditor Terhadap Audit Judgment

InFestasi ◽  
2018 ◽  
Vol 14 (2) ◽  
pp. 169
Author(s):  
Lambok Tampubolon
Keyword(s):  
Quantitative Research ◽  
Primary Data ◽  
Significant Positive Effect ◽  
Public Accounting ◽  
Accounting Firms ◽  
The Public ◽  
Audit Judgment ◽  
Public Accounting Firms ◽  
Positive Effect

<p><em>This research is quantitative research. The data used in this study is primary data by distributing questionnaires to public accounting firms domiciled in DKI Jakarta. The population in this study were auditors who worked in the Public Accounting Office. Questionnaires were distributed as many as 130 questionnaires and data that could be processed as many as 100 questionnaires. Data is processed using the help of SPSS 23. The purpose of this study is to examine the effect of auditor compliance, knowledge and experience on audit judgment. From a sample of 17 public accounting firms in DKI Jakarta, this study shows that: (1) obedience pressure has a significant positive effect on audit judgment, (2) knowledge has a significant positive effect on judgment audits, and (3) auditor experience has no effect on judgment audit.</em></p>

scholarly journals Love of Money, Machiavellian, Religiusitas dan Kinerja Auditor

2020 ◽  
Vol 30 (12) ◽  
pp. 2999
Author(s):  
Ida Ayu Chintya Utami Dewi ◽  
Gayatri Gayatri
Keyword(s):  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Negative Influence ◽  
Public Accounting ◽  
Accounting Firms ◽  
The Public ◽  
Analysis Technique ◽  
Love Of Money ◽  
Public Accounting Firms ◽  
Saturated Sample

This study aims to determine the effect of love of money, machiavellian, religiosity on auditor performance. The population in this study were auditors working at the Public Accountant Firm in Bali which were listed in the Indonesia Public Accountants Institute Directory in 2019 so that a sample of 109 auditors was obtained using the technique of determining saturated sample data. The data analysis technique used is multiple linear regression analysis. The results of this study indicate that love of money and machiavellian have a negative influence on the performance of auditors in public accounting firms in Bali and religiosity has a positive effect on auditor performance in public accounting firms in Bali. This research can provide information about love of money, machiavellian, religiosity on the performance of auditors of Public Accounting Firms in Bali, because it can affect the auditor's performance in achieving better work results. Keywords: Love Of Money; Machiavellian; Religiosity.

scholarly journals Comments by the Auditing Standards Committee of the Auditing Section of the American Accounting Association on the PCAOB Rulemaking Docket Matter 029: PCAOB Release No. 2011-007, Improving Transparency Through Disclosure of Engagement Partner and Certain Other Participants in Audits

2012 ◽  
Vol 6 (1) ◽  
pp. C1-C6 ◽  
Author(s):  
Keith L. Jones ◽  
Jagadison K. Aier ◽  
Duane M. Brandon ◽  
Tina D. Carpenter ◽  
Paul Caster ◽  
...  
Keyword(s):  
Exposure Period ◽  
Data Availability ◽  
Audit Report ◽  
Public Accounting ◽  
Accounting Firms ◽  
The Public ◽  
Public Comment ◽  
Public Company ◽  
Public Accounting Firms ◽  
Auditing Standards

SUMMARY In October 2011, the Public Company Accounting Oversight Board (PCAOB or Board) issued a release to solicit public comment on amendments to its standards that would improve the transparency of pubic company audits. The objective of the release was to solicit public comments on a proposed standard that would (1) require registered public accounting firms to disclose the name of the engagement partner in the audit report, (2) amend the Board's Annual Report Form to require registered firms to disclose the name of the engagement partner for each audit report already required to be reported on the form, and (3) require disclosure in the audit report of other independent public accounting firms and other persons that took part in the audit. The PCAOB provided for a 91-day exposure period (from October 11, 2011, to January 9, 2012) for interested parties to examine the release and provide comments. The Auditing Standards Committee of the Auditing Section of the American Accounting Association provided the comments in the letter below to the PCAOB on PCAOB Rulemaking Docket Matter 029: PCAOB Release No. 2011-007, Improving Transparency Through Disclosure of Engagement Partner and Certain Other Participants in Audits. Data Availability: Information about and access to the release is available at: http://pcaobus.org/Rules/Rulemaking/Docket029/PCAOB_Release_2011-007.pdf

Pemetaan Penerapan Standar Audit Berbasis ISA Pada Kantor Akuntan Publik (KAP) di Daerah Istimewa Yogyakarta

MODUS ◽  
2016 ◽  
Vol 28 (1) ◽  
pp. 23
Author(s):  
Caecilia Mesian Anggit Sari ◽  
Rustiana Rustiana
Keyword(s):  
Descriptive Analysis ◽  
International Standards ◽  
Public Accounting ◽  
Accounting Firms ◽  
The Public ◽  
Public Accounting Firms ◽  
Questions And Answers ◽  
Level 3 ◽  
Level 1 ◽  
Business Entities

Abstrak Tujuan dari penelitian ini adalah untuk memetakan penerapan standar auditing berdasarkan International Standards on Auditing (ISA) di Kantor Akuntan Publik (KAP) di Yogyakarta. Penelitian ini merupakan penelitian kualitatif yang menggunakan wawancara mendalam dan kuesioner terbuka untuk mengumpulkan data dari KAP. Sampel penelitian adalah 6 dari 12 KAP di Yogyakarta. Analisis data menggunakan analisis deskriptif dan wawancara intensif dengan para pengambil keputusan dari KAP (manajer atau partner). Hasil penelitian menunjukkan bahwa 50% dari KAP di Yogyakarta berada pada tahap mengetahui (level 1), 17% pada tahap aplikasi (level 3), dan 33% pada tahap pendidikan (level 4). Implikasi dari penelitian ini adalah bahwa KAP di tingkat 1 harus berkontribusi secara aktif untuk mencari informasi tentang audit dari badan usaha kecil berdasarkan ISA yang telah diterbitkan oleh Ikatan Akuntan Indonesia. Pertanyaan dan Jawaban (TJ) buku pegangan berisi prinsip-prinsip audit yang berbasis ISA untuk badan usaha kecil dan menengah. Buku panduan ini dimaksudkan untuk membantu auditor dalam menerapkan standar audit yang relevan secara efektif dan efisien. Kata kunci: International Standards on Auditing (ISA), Kantor Akuntan Publik, Auditor Abstract The aim of this study is to map the application of the auditing standards based on the International Standards on Auditing (ISA) at public accounting firms in Yogyakarta. This study is a qualitative research that uses in-depth interviews and open-questionnaires to collect data from public accounting firms. The research sample consists of 6 of 12 public accounting firms. Data were analyzed by using descriptive analysis and intensive interviews with the decision makers of public accounting firms (managers or partners). The results show that 50% of public accounting firms in Yogyakarta are at the stage of knowing (level 1), 17% at the application stage (level 3), and 33% at the stage of education (level 4). The implication of this study is that the public accounting firms at level 1 should contribute actively to seek information about the audit of small business entities based on ISA which has been issued by the Indonesian Institute of Accountants. The Questions and Answers (TJ) handbook contains the ISA-based audit principles for small and medium business entities. This handbook is intended to assist the auditor in applying relevant audit standards effectively and efficiently. Keywords: International Standard on Auditing (ISA), Public Accounting Firm, Auditor

CPAs' Perceptions of the Emerging Multidisciplinary Accounting/Legal Practice

2001 ◽  
Vol 15 (1) ◽  
pp. 35-48 ◽  
Author(s):  
Kimberly E. Frank ◽  
Randall K. Hanson ◽  
D. Jordan Lowe ◽  
James K. Smith
Keyword(s):  
Legal Services ◽  
Certified Public Accountant ◽  
Public Accounting ◽  
Legal Ethics ◽  
Accounting Firms ◽  
Accounting Firm ◽  
The Public ◽  
Multidisciplinary Practice ◽  
Public Accounting Firms ◽  
Public Accountant

This paper reports the results of a survey of 219 American Institute of Certified Public Accountant members about legal services their public accounting firms currently offer and plan to offer in the future, and how they would organize their firm to deliver these services to clients. The survey is motivated by the legal profession's current investigation of whether to allow nonattorneys to share fees and become partners with nonattorneys and by the American Bar Association's call for evidence on the current existence of multidisciplinary practice (MDP). Forty-four states established MDP committees to recommend whether legal ethics rules should be relaxed to allow MDP. Relaxed ethics rules allow public accounting firms to employ attorneys to offer a full array of legal services to their clients. We find that public accounting firms already offer a number of legal services to their clients and are interested in increasing the offering of these services if allowed. The results also indicate that the size of the public accounting firm is likely to influence the types of legal services offered and the arrangements used to deliver the legal services to clients. The findings are important because they highlight the need for the legal and accounting professions to formulate rules regarding MDP.

Decision Making in a Public Accounting Firm: An Instructional Case in Risk Evaluation, Client Continuance, and Auditor Independence within the Context of the Sarbanes-Oxley Act of 2002

2006 ◽  
Vol 21 (4) ◽  
pp. 431-447 ◽  
Author(s):  
Ambrose Jones ◽  
Carolyn Strand Norman
Keyword(s):  
Decision Making ◽  
Risk Evaluation ◽  
Auditor Independence ◽  
Public Accounting ◽  
Audit Risk ◽  
Accounting Firms ◽  
The Public ◽  
Sarbanes Oxley ◽  
Public Accounting Firms ◽  
A Current

The purpose of this case, loosely based on an actual auditor-client situation, is to study decision making by auditors in public accounting firms regarding risk management (business, engagement, and audit risk), client continuance, and auditor independence. Audit partners often face difficult decisions for which they must balance the business objectives of the firm with their professional objective of satisfying the public interest. While most studies and cases focus on client-acceptance decisions (e.g., Johnstone 2000; Gendron 2002; Knapp and Knapp 2004), an equally important decision for public accounting firms in the Sarbanes-Oxley era is whether to keep a current client. This case encourages students to consider the decision with respect to client continuance, auditor independence, and risk evaluation.

Valuation Issues, Auditor Fraud, and PCAOB Confirmation: Findings From an Analysis of Lawsuits Against Large Public Accounting Firms

2021 ◽  
pp. 0148558X2110658
Author(s):  
Andrea Everard ◽  
Kent St. Pierre
Keyword(s):  
Third Parties ◽  
Legal Research ◽  
Public Accounting ◽  
Accounting Firms ◽  
Generally Accepted Accounting Principles ◽  
The Public ◽  
Accounting Principles ◽  
Public Company ◽  
Public Accounting Firms ◽  
Source Of Information

In this article, we bridge the gap between academia and practice by analyzing and presenting the results of allegations in more than 200 lawsuits against the largest public accounting firms. Our findings are critical as the lawsuits damage the firms’ reputations, the credibility of the profession in general, and may result in large monetary losses and loss of clients. We find three key results not found in previous legal research. First, we find that Generally Accepted Accounting Principles (GAAP) issues, especially those focused on valuation, dominate Generally Accepted Auditing Standards (GAAS) issues in the allegations. Second, fraud allegations against the auditors themselves are a significant problem, although often ignored in the fraud literature. Third, the Public Company Accounting Oversight Board (PCAOB) reports on the accounting firms provide an unintended source of information for third parties in future legal allegations against those same firms.

scholarly journals Comments by the Auditing Standards Committee of the Auditing Section of the American Accounting Association on PCAOB Release No. 2013-009, Proposed Rule on Improving the Transparency of Audit: Proposed Amendments to PCAOB Auditing Standards to Provide Disclosure in the Auditor's Report of Certain Participants in the Audit

2014 ◽  
Vol 8 (2) ◽  
pp. C1-C7 ◽  
Author(s):  
Urton L. Anderson ◽  
Lisa Milici Gaynor ◽  
Karl E. Hackenbrack ◽  
Ling Lei Lisic ◽  
Yi-Jing Wu
Keyword(s):  
Data Availability ◽  
Public Accounting ◽  
Accounting Firms ◽  
The Public ◽  
Related Information ◽  
Public Company ◽  
Public Accounting Firms ◽  
Auditing Standards

SUMMARY On December 4, 2013 the Public Company Accounting Oversight Board (PCAOB) solicited public comments on its reproposed amendments to its standards that would improve the transparency of public company audits. The amendments would require (1) disclosure in the auditor's report of the name of the engagement partner, and (2) disclosure in the auditor's report of the names, locations, and extent of participation of other independent public accounting firms that took part in the audit and the locations and extent of participation of other persons not employed by the auditor that took part in the audit. The comment period initially ended on February 3, 2014, but was subsequently extended to March 17, 2014. This commentary summarizes the contributors' views on these amendments. Data Availability: The exposure drafts of the proposed and reproposed rules and related information are available at: http://pcaobus.org/Rules/Rulemaking/Pages/Docket029.aspx

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