The Value of Auditor Industry Specialization: Evidence from a Structural Model

This study investigates the value of auditor industry specialization. In the first step, we use a discrete choice model to derive the first-order demand for auditor industry specialization. Our results reveal that clients have a general preference for auditor industry specialization, relating to both audit firm and audit office specialization. Further, we observe that specializations at the audit firm and audit office level are substitutes. We also find that larger and more complex clients have a stronger demand for industry specialization at the audit office level. In the second step, we use the results from the discrete choice model to quantify the value of auditor industry specialist for clients. We find that the overall value of industry specialization aggregated across all clients is 5.2 million USD (0.36% of audit fees) and that industry specialization at the firm (office) level is decisive for auditor choice in 4% (6%) of all cases.

INSENTIF PPH FINAL DITANGGUNG PEMERINTAH SELAMA PANDEMI COVID-19 BAGI UMKM YANG MEMILIKI PEREDARAN BRUTO TERTENTU

ABSTRAK The COVID-19 pandemic has wreaked havoc on Indonesia's economy, including the MSME sector. Many MSMEs have seen a drop in revenue or have even gone out of business. The government provides fiscal cushions in the form of incentives for final PP 23 Income Tax borne by the government in order to save the sustainability of MSME actors. The use of these incentives, however, has not been optimal at the national level. This motivates the author to examine how incentive policies are implemented in DGT vertical agencies at the Small Tax Office level. This study employs a combination approach, with data collected via documentation and interviews. The findings revealed that the XYZ Small Tax Office's use of incentives is still inefficient. Several optimization efforts have been undertaken, including socialization, appeals, and AR-provided guidance. However, there are still barriers to using incentives. To make it easier for taxpayers to take advantage of this incentive, the author suggests that information about incentives be disseminated via SMS blast and that realization reporting be done directly on the web without having to upload csv files Pandemi COVID-19 telah memberikan dampak masif bagi sektor perekonomian Indonesia, tak terkecuali sektor UMKM. Banyak pelaku UMKM yang mengalami penurunan omset atau bahkan gulung tikar. Guna menyelamatkan keberlangsungan pelaku UMKM, pemerintah memberikan bantalan fiskal berupa insentif Pajak Penghasilan final PP 23 ditanggung pemerintah (DTP). Namun, pemanfaatan insentif tersebut secara nasional belum optimal. Hal tersebut mendorong penulis untuk meninjau pelaksanaan beleid insentif pada instansi vertikal DJP setingkat KPP Pratama. Penelitian ini menggunakan metode kombinasi dengan pengumpulan data melalui dokumentasi dan wawancara. Hasil penelitian menunjukkan bahwa pemanfaatan insentif di KPP Pratama XYZ masih belum optimal. Beberapa upaya optimalisasi telah dilakukan seperti sosialisasi, himbauan, serta pemberian panduan oleh AR. Namun, kendala pemanfaatan insentif masih timbul. Penulis merekomendasikan agar penyebaran informasi terkait insentif juga dilakukan melalui SMS blast serta pelaporan realisasi dapat dilakukan melalui web secara langsung tanpa mengunggah csv file sehingga lebih mempermudah Wajib Pajak dalam memanfaatkan insentif ini

Abundance and Seasonality of Phytoplankton, Zooplankton and Anuran Species in Selected Wetlands of Kogi State, Nigeria

Phytoplankton, Zooplankton and anurans play vital role in the working of wetland ecosystems as they form its dynamic food web. This study was designed to determine the abundance and seasonality of Phytoplankton, Zooplankton and Anuran species in selected wetlands of Kogi State, Nigeria. The study was performed in Abu’ja wetland in Dekina Local Government area and Egwubi seasonal wetland in Ejule, Ofu Local Government area of Kogi state. From each sampled wetlands planktons were collected with plankton net at the sites. Overall, 854 specimens of anurans, 584 from Abu’ja and 270 from Egwubi sites were collected within a period of eighteen months. The abundance of phytoplankton, zooplankton and anuran species were computed. Abundance was computed as a proportion of numbers of organisms in a group to the summation of the total number in all the groups being considered. Simpson’s index (Dominance), Gini-Simpson's, Shannon-Wiener index, Berger-Parker index, Margalef’s index, Menhinick’s index, Fisher alpha, Equitability index, Brillouin index and Chao index were all calculated following standard methods. The data collected was analyzed using the Statistical Package for Social Sciences (SPSS) version 20.0, PAST version 3.14 and Microsoft Office. Level of significance was p < 0.05. Anuran species found in both wetlands included Amietophrymus regularis, A. maculatus and Hoplobatracchus occipitalis. Phytoplankton species encountered in both study stations include Oscilatoria spp, Anabaenia spp, Anacystis spp, Spirogyra spp, Oedogonium spp, Savicular spp and Euglena spp. Zooplanktons encountered include Epiphanes spp, Philodina spp, Synchata spp, Poliathra spp, Holopedium spp, Daphnia spp, Alona spp and Bosmina spp. The abundance and seasonality of phytoplankton, zooplankton and anurans in the selected wetlands studied in Kogi state, Nigeria showed that the organisms abundance are highly influenced by the seasons in Kogi State, with its peak abundance in rainy season and very low abundance in dry season.

Audit Office Labor Market Proximity and Audit Quality

This study examines whether the audit quality of Big 4 audit firms is affected by an audit office's proximity to more target universities for appointing staff auditors. We identify these target universities using a recruitment map of a Big 4 audit firm and unique office-level hiring data hand collected from LinkedIn. Our findings suggest that audit offices closer to more of their key feeder schools and universities with accredited business schools are associated with higher audit quality, as observed by a lower likelihood of financial accounting misstatements. Our results are robust across alternative measures of labor market proximity and audit quality, and to a battery of sensitivity tests, including controlling for client firm's proximity to universities. Overall, our results suggest that audit offices benefit from being proximate to more key suppliers of staff auditors.

Do Individual Auditors Have Their Own Styles? Evidence from Clients' Financial Statement Comparability in China

In this study, we investigate whether individual auditors are associated with the comparability of their clients' financial statements, based on a sample of Chinese companies audited by 10 large audit firms. We demonstrate that individual auditors have an incremental effect on comparability, beyond the office-level effect. We also find that the style of individual auditors is stronger when they are affiliated with Big 4 audit firms (compared to non-Big 4 large audit firms) and when they are industry experts. In addition, two possible channels of enhanced comparability are identified: (i) client's accounting flexibility, which provides opportunities; and (ii) individual auditors' characteristics such as age, position, and academic degree, which affect auditors' abilities to exert influence. Our results are robust to alternative comparability and industry specialist measures, to various sampling methods, and to corrections for potential endogeneity problems.

Supporting Factors in Implementing Joint Analysis Policy between the Directorate General of Tax and Customs and Excise

The Ministry of Finance released the Synergy Program (Joint Program) in 2017, where one of the subprograms is a Joint Analysis between the Directorate General of Tax and Customs. Joint Analysis is intended to optimize state revenue, tax compliance and can be developed by other subprograms. The implementation of Joint Analysis can encompass non-compliant importers and exporters and close the tax avoidance gap by shifting the location of activities or company domiciles between regions of Indonesia. The purpose of this study is to analyze the enabling factors in implementing a joint analysis policy between the Directorate General of Tax and Customs. This study adopts the positivism paradigm with qualitative methods. Primary data sources were obtained through in-depth interviews with selected informants. The results showed that political support and commitment from the leadership were quite good, but equal treatment at the Regional Office level was still a chore to complete. The legal regulations are complete and clear enough to accommodate the implementation of the program even though the technical operational standards at the Regional Office level are not yet rigid. Resources and governance are quite good although it requires time for the joint team to learn about business processes. Understanding between parties is considered quite good with the growing development of trust and joint commitment to secure state revenue. Communication between joint teams is done practically and flexibly, data exchange can be by email or WhatsApp group. The use of data analytics applications is also quite effective even though it has not yet reached all Regional Offices.

Consequences of Going-Concern Opinion Inaccuracy at the Audit Office Level

SUMMARY This paper examines whether inaccurate going-concern opinions negatively affect the audit office's reputation. Assuming that clients perceive the incidence of going-concern opinion errors as a systematic audit quality concern within the entire audit office, we expect these inaccuracies to impact the audit office market share and dismissal rate. We find that going-concern opinion inaccuracy is negatively associated with the audit office market share and is positively associated with the audit office dismissal rate. Furthermore, we find that the decline in market share and the increase in dismissal rate are primarily associated with Type I errors. Additional analyses reveal that the negative consequence of going-concern opinion inaccuracy is lower for Big 4 audit offices. Finally, we find that the decrease in the audit office market share is explained by the distressed clients' reactions to Type I errors and audit offices' lack of ability to attract new clients.

The efficiency of public employment services: a matching frontiers approach

Purpose This paper aims to model the efficiency of labour offices belonging to the public employment services (PESs) in Spain using a stochastic matching frontier approach. Design/methodology/approach With this aim in mind, the authors apply a random parameter model approach to control for observed and unobserved heterogeneity. Findings Results indicate that when the information criteria of the estimates are analysed, it improves by controlling both, observed and unobserved heterogeneity in the inefficiency term. Also, results suggest that counsellors improve the productivity of labour offices and that the share of unemployed skilled persons, unemployed persons aged 44 or younger, as well as the share of unemployed persons in the construction sector, all affect the technical efficiency of PESs offices. Originality/value The model extends the previous specifications in the matching literature that capture only observed heterogeneity. Moreover, as far as the authors know, it is the first paper that estimates a matching frontier for the Spanish case. Finally, the database they use is at the office level and includes the work carried out by counsellors, which is a novelty in the analysis of this type of studies at the Spanish level.