Purpose The purpose of this paper is to examine how experience and gender relate to the auditors’... more Purpose The purpose of this paper is to examine how experience and gender relate to the auditors’ moral awareness. Design/methodology/approach Hypotheses are informed by a neurocognitive approach to ethical decision-making and tested using survey data from 191 auditors of a Big Four audit firm in The Netherlands. Findings The main findings indicate that more experienced auditors (i.e. those with more years of work experience, a higher rank and a higher age) show higher levels of moral awareness. This positive relationship is stronger for morally questionable situations related to accounting and auditing, compared to general business moral dilemmas. In addition, the results support the expectation that on average, female auditors have higher moral awareness than their male counterparts. Originality/value To the knowledge of the authors, this is the first study that considers a neurocognitive approach to inform hypotheses about the antecedents of auditors’ moral awareness. The finding...
Journal of Accounting & Organizational Change, 2021
Purpose This study aims to understand how institutional logics influence the adoption and impleme... more Purpose This study aims to understand how institutional logics influence the adoption and implementation of risk management (RM) practices by government entities in a non-western, developing country. Design/methodology/approach This study draws on the institutional logics perspective (ILP) to analyze a case study of a government entity in Saudi Arabia. Data were obtained from semi-structured interviews, observations and documentary evidence. Findings Findings suggest that the adoption and implementation of RM projects by Saudi governmental agencies was rooted in a traditional logic, even though the catalyst of the government for adopting a RM culture across government agencies was framed within a reform program inspired by a modernization logic. In the entity under investigation, the RM project led to an unstable situation where actors were confronted with these two competing logics. Although the project used manifestations of a modernization logic, the actions of individuals within...
This study examines whether social and human capital influence the compensation of individual aud... more This study examines whether social and human capital influence the compensation of individual auditors in the small audit firm market. We employ a sample of Italian auditors and use measures from the network and auditing literatures to capture their professional connections, representing social capital, and their industry expertise, representing human capital. Our findings show a positive and economically meaningful association between these individual attributes and auditor compensation. We run several tests to address potential endogeneity issues in our research design. Our results suggest that, in the small audit market, clients perceive as valuable those auditors with higher social and human capital, and as a result, are willing to pay a premium for these specific auditor attributes.
Journal of Evolutionary Studies in Business-JESB, 2017
In this study, we present a review of research of accounting in family firms. The aim is to summa... more In this study, we present a review of research of accounting in family firms. The aim is to summarize the main findings of prior studies and identify what we have learned so far about the role of accounting in family firms. Specifically, we survey the contributions of accounting researchers to the study of family firms in four subfields: (1) financial accounting and reporting, (2) management accounting and management control, (3) auditing, and (4) accounting history. After considering some theoretical and empirical advancements of family business research in other disciplines, we conclude by identifying avenues for future research.
Originating in a panel presentation at the eighth Accounting History International Conference, th... more Originating in a panel presentation at the eighth Accounting History International Conference, this study offers a reflection on the issues, opportunities and obstacles which may arise when accounting historians engage with other accounting scholars and scholars outside of accounting. Supporting the view that accounting scholars need and should make an effort to engage with other scholars inside and outside accounting, various aspects are considered as enhancing the interdisciplinarity of accounting history research. Then issues such as researchers and the community, research problems, theories, methods and data are addressed. The opportunities arising from interdisciplinary interactions with a wide range of scholars are then developed. Finally, the potential obstacles are addressed. This obstacles can be overcome by the development of robust communication and the invention of a new genre of discourse and research focus and by working with those outside our discipline and embracing the challenge of the new and the different.
Mr. Roel Jannsen, an economics and financial journalist, has written an interesting book on Supre... more Mr. Roel Jannsen, an economics and financial journalist, has written an interesting book on Supreme Audit Institutions (SAIs). In essence, the book is a compilation of interviews of eight current and former heads of audit institutions from across the world. The book is unique in that it brings us the opportunity to 'travel' around the world, visiting the SAIs of different countries. The lessons from the personal experiences of these SAIs' leaders are, indeed, what makes the book particularly interesting. The book is well written, easy to read and fairly short, consisting of 103 pages. Excluding the Introduction, the book contains 8 sections pertaining to the SAIs of Tunisia, Austria, South Africa, the Philippines, Estonia, the United States, Uganda and Iraq. Besides the opinions of the heads of the SAIs, in each section we find a summary of the key statistics and some additional information about each country (e.g., population, GDP) and a brief description of the history of the institution. It also contains some biographical details (and a picture) of the SAIs' leaders. Information about how the local SAI interacts with the International Organization of Supreme Audit Institutions (INTOSAI) is included as well. Given the topic, the approach and the structure of the book, it will be of interest to the general public. In the following, I will briefly discuss the salient points of the different sections and conclude with some thoughts. The prologue 'The pillars of integrity' sets the scene. The history of the Netherlands Court of Audit is used to introduce the key theme of the book: the role of SAIs in today's society. The prologue explains the vital role of SAIs in the accountability of governments, in the efforts to enhance governance in government institutions and in the disclosure of corruption cases. It also introduces three underlying topics discussed throughout the book: the evolving nature of SAIs and their different roles depending on the jurisdiction; the importance of individual leadership; and the current challenges of SAIs. The prologue closes with a commentary about INTOSAI's assistance to national SAIs. The section 'La Cour Est Dans Mon Coeur' focuses on the Tunisian Court of Auditors and its president Faiza Kei. The biographical information about the president underscores her involvement in women's rights movements. Discrimination of women in decision-making was one of the issues she paid attention to during her time in office. In Kei's view, the main duties of the Tunisian SAI are to: act as a watchdog of the political process; perform performance audits; and to fight against corruption. The section includes a brief discussion of the profound effect that the changes in government caused by the Jasmine Revolution in 2011 had on the SAI's role and activities. The section 'Accountability, Transparency and Independence' discusses the Austrian Rechnungshof and the role of Josef Moser, its current president. The recent financial crisis in 695106A CH0010.1177/1032373217695106Book reviewBook review book-review2017
Este trabajo tiene como objetivo analizar el entramado institucional de la reforma contable españ... more Este trabajo tiene como objetivo analizar el entramado institucional de la reforma contable española de 2007. Adoptando como marco teórico la teoría institucional, hemos identificado los grupos de presión que han tenido un peso significativo en el proceso de reforma y las implicaciones directas de su influencia sobre el Libro Blanco de 2002 y sobre el Plan General Contable de 2007. Para realizar el análisis, siguiendo el concepto de isomorfismo de DiMaggio y Powell, hemos clasificado los distintos grupos de interés en función de su capacidad para influir en el proceso. La evidencia empírica que soporta nuestra investigación se obtuvo a partir de las entrevistas realizadas a varios participantes en el proceso. Esta información se complementó con el análisis de documentos oficiales y de las opiniones publicadas en prensa y en revistas especializadas por distintos actores del proceso o personas afectadas por el mismo. Nuestras conclusiones sugieren el dominio del isomorfismo coercitivo en la reforma, a nivel tanto nacional (el papel del ejecutivo, a través del Instituto de Contabilidad y Auditoría de Cuentas) como supranacional (fundamentalmente de la Comisión Europea). También observamos la influencia de otros reguladores, como la Comisión Nacional del Mercado de Valores y el Banco de España, que, con su experiencia en sus ámbitos de actuación, desempeñaron un papel de «líderes» en el proceso en un ejemplo de isomorfismo mimético. Apreciamos además la influencia de presiones normativas con la participación de distintos grupos de expertos (e.g., académicos). Por último, es importante destacar el carácter cambiante y dinámico de dichas influencias a lo largo del proceso de reforma contable.
This article examines the extent to which strategies of specialization and diversification of aud... more This article examines the extent to which strategies of specialization and diversification of audit firms are related to organizational performance. Drawing on the insights of the resource based view (Barney, 1991) as well as on extant research on the determinants of audit fees, our study investigates how performance of audit firms is mediated by (i) specialization on big audit clients; (ii) diversification on clientindustries; and (iii) geographic diversification. Empirical support for this study is gathered from a sample of 168 audit firms that operated in Spain during 1999 and provided audit services to 10,106 clients. Our findings suggest that audit firms that are specialised on big clients and/or are geographically diversified outperform their counterparts that specialise on small clients and/or lessen their geographic scope. Further, our results show that diversification on client-industries has a positive, albeit less significant effect on performance of audit firms. Taken together, these results indicate that big audit firms have the necessary resources and capabilities that ensure a steady, growing organizational performance.
We draw on social capital theory to examine the relationship between audit committee (AC) members... more We draw on social capital theory to examine the relationship between audit committee (AC) members' social capital and financial reporting quality. Using US data for the period 2001-2010, our results suggest that non-AC directors' social capital does not appear to be relevant to financial reporting quality. As far as AC members are concerned, our findings show a negative relationship between their social capital and financial reporting quality, suggesting a 'dark side' to social capital. Specifically, we find that sitting in multiple ACs (centrality) has a negative impact on reporting quality only for those AC members designated as financial experts. When other proxies for social capital are considered (connectedness, brokerage position and strong ties), our results show that the quality of financial reporting significantly decreases with the social capital of non-financial experts sitting in the AC. We contribute to prior research by: (i) relying on social capital theory, which is widely neglected in accounting research, (ii) using multiple metrics to capture the complex dimensions of social capital, and (iii) discriminating between the effects of financial and non-financial experts' social capital on reporting quality. Our results suggest policy-makers might wish to limit financial experts' multiple directorships as well as assess the actual contribution of non-financial experts to AC effectiveness.
International Journal of Critical Accounting, 2012
This article examines the impact of auditing standards intending to reduce the audit expectations... more This article examines the impact of auditing standards intending to reduce the audit expectations gap on auditors' behaviour. Specifically, we examine whether the adoption of an auditing standard ongoing concern evaluation in Spain is associated with changes in auditors' behaviour. Our empirical results suggest that the implementation of the new standard did not impact on auditors' propensity to issue going concern opinions; on auditors' interest on maintaining their reputation; and on the influence of auditors' economic incentives. Our results indicate that the implementation of auditing standards seems not to have an impact on day-today auditing practices, and therefore, auditing standards related to going concern evaluation fail to reduce the expectations gap. Our results also suggest that, in spite of the differences between the regulatory framework of auditing in Spain and in Anglo-Saxon countries (e.g., degree of state intervention), the impact of such standards on auditors' behaviour are comparable.
Extant knowledge on gender and auditing overwhelmingly relies on evidence gathered from a limited... more Extant knowledge on gender and auditing overwhelmingly relies on evidence gathered from a limited group of Anglo-Saxon countries. It is widely admitted, however, that gender issues are affected by the institutional contexts of the investigation. The Anglo-Saxon settings, we contend, embrace a number of idiosyncratic, institutional characteristics that advise caution in the generalizability of results. Our study addresses the role of gender in Spanish audit practice during the period 1942 to 1988. The environment of the Spanish audit profession witnessed the peaceful transition from a dictatorship to a full-edged democracy as well as the emergence of a free market economy from a system characterized by stiff economic autarchy and an overriding intervention of the state in the economy. We found that the dominant role of the state in Spanish society affected the structure of the audit profession and made impossible the emergence of an autonomous project. In particular, our ndings reveal that the audit profession did not have an independent strategy about the role of women at work, but mimicked the attitudes deployed by the state during our observation period.
El objetivo de este trabajo es analizar el impacto de la rotación obligatoria de firmas en la cal... more El objetivo de este trabajo es analizar el impacto de la rotación obligatoria de firmas en la calidad de la auditoría. Dos argumentos opuestos han alimentado el debate sobre la conveniencia de esta medida. Sus defensores argumentan que esta medida refuerza la independencia del auditor y, por tanto, incrementa la calidad de la auditoría. Sus detractores, en cambio, opinan que la rotación destruye el conocimiento específico del auditor y reduce los incentivos a competir en el mercado, disminuyendo la calidad del servicio. La rotación cada nueve años fue obligatoria en España desde 1988 hasta 1995, por lo que contamos con un contexto único para obtener evidencia empírica sobre los efectos de esta norma. Se contrastan dos hipótesis opuestas sobre el impacto de la derogación de la norma sobre la probabilidad del auditor de emitir informes con salvedades por gestión continuada. La muestra está formada por empresas cotizadas españolas con deterioro financiero observadas en un régimen con r...
AUDITING: A Journal of Practice & Theory, 2009
SUMMARY: In this study, we document evidence on the impact of mandatory rotation of audit firms o... more SUMMARY: In this study, we document evidence on the impact of mandatory rotation of audit firms on auditor independence using Spanish archival data. Rotation of audit firms every nine years was mandatory in Spain from 1988–1995. Although the rule was never enforced, the Spanish context provides a unique setting to examine the effects that mandatory audit firm rotation has on auditor behavior. We examine audit reports for a sample of financially stressed companies from 1991–2000 to compare audit reporting behavior in a regime with rotation (mandatory rotation period: 1991–1994) and one without rotation (post-mandatory rotation period: 1995–2000). We test two competing hypotheses concerning the impact of mandatory rotation on the likelihood of auditors' issuing going-concern modified audit opinions. We find no evidence to suggest that a mandatory rotation requirement is associated with a higher likelihood of issuing going-concern opinions. Our results suggest that auditors' in...
Accounting, Auditing & Accountability Journal, 2007
PurposeIn recent international debates on auditing regulation, Spain has assumed a real prominenc... more PurposeIn recent international debates on auditing regulation, Spain has assumed a real prominence as a claimed practical example of where a policy of mandatory audit firm rotation did not work and was duly abolished. This study aims to provide an analysis of the implementation and subsequent removal of mandatory audit firm rotation in Spain in the 1990s.Design/methodology/approachThis takes the form of historical analysis; the evidence in the paper derives from congressional hearings, financial newspapers and documents produced by the professional associations of auditors in Spain.FindingsThis paper demonstrates that at no stage was mandatory rotation of audit firms ever enforced on Spanish auditors. Further, the revision and subsequent removal of the Spanish law on mandatory audit firm rotation emerge as a rather politicized process, with no evident reference being made in the process of legislative reform to Spanish auditing experiences. The analysis also reveals that at the very...
Following the end of General Franco's dictatorship in November 1975, Spain witnessed '… the most ... more Following the end of General Franco's dictatorship in November 1975, Spain witnessed '… the most rapid and pervasive transformations, with no aspect of social, economic and political life remaining untouched.' (Bougen and Vázquez, 1997: 3). These transformations impinged on the audit market, which experienced high growth amid the steady process of deregulation and professional reforms that culminated in the enactment of the Spanish Audit Law in 1988 (Bougen, 1997; García-Benau et al., 1998, 1999). The reforms created a 'new' and modern auditing profession and played an instrumental role in the booming de
Research on the accounting profession considers the notion of boundaries a useful, albeit wide an... more Research on the accounting profession considers the notion of boundaries a useful, albeit wide and elusive, concept. However, recent sociological and organizational research has sharpened the concept of boundaries to enable further examination of relational processes. In this paper, we draw on this research to advance our understanding of the process of constructing boundaries in auditing. In doing so, we focus on the unique institutional conditions in Spain during the period 1850-1988. This period witnessed the overwhelming role of the State in any sphere of economic and social life. In the case of auditing, the influence of the State was augmented as the academic background became the site of influence, which resulted in educational reforms setting professional boundaries. Our findings provide some additional insights into the boundaries construction process and the dynamics of the symbolic and social boundaries contingent on the wider contexts of the audit function.
Aunque la duración del contrato de auditoría ha atraído recientemente gran atención en la literat... more Aunque la duración del contrato de auditoría ha atraído recientemente gran atención en la literatura, sobre todo, por sus posibles efectos sobre la calidad de la auditoría, la investigación no ha aportado hasta el momento una respuesta concluyente sobre esta ...
Purpose The purpose of this paper is to examine how experience and gender relate to the auditors’... more Purpose The purpose of this paper is to examine how experience and gender relate to the auditors’ moral awareness. Design/methodology/approach Hypotheses are informed by a neurocognitive approach to ethical decision-making and tested using survey data from 191 auditors of a Big Four audit firm in The Netherlands. Findings The main findings indicate that more experienced auditors (i.e. those with more years of work experience, a higher rank and a higher age) show higher levels of moral awareness. This positive relationship is stronger for morally questionable situations related to accounting and auditing, compared to general business moral dilemmas. In addition, the results support the expectation that on average, female auditors have higher moral awareness than their male counterparts. Originality/value To the knowledge of the authors, this is the first study that considers a neurocognitive approach to inform hypotheses about the antecedents of auditors’ moral awareness. The finding...
Journal of Accounting & Organizational Change, 2021
Purpose This study aims to understand how institutional logics influence the adoption and impleme... more Purpose This study aims to understand how institutional logics influence the adoption and implementation of risk management (RM) practices by government entities in a non-western, developing country. Design/methodology/approach This study draws on the institutional logics perspective (ILP) to analyze a case study of a government entity in Saudi Arabia. Data were obtained from semi-structured interviews, observations and documentary evidence. Findings Findings suggest that the adoption and implementation of RM projects by Saudi governmental agencies was rooted in a traditional logic, even though the catalyst of the government for adopting a RM culture across government agencies was framed within a reform program inspired by a modernization logic. In the entity under investigation, the RM project led to an unstable situation where actors were confronted with these two competing logics. Although the project used manifestations of a modernization logic, the actions of individuals within...
This study examines whether social and human capital influence the compensation of individual aud... more This study examines whether social and human capital influence the compensation of individual auditors in the small audit firm market. We employ a sample of Italian auditors and use measures from the network and auditing literatures to capture their professional connections, representing social capital, and their industry expertise, representing human capital. Our findings show a positive and economically meaningful association between these individual attributes and auditor compensation. We run several tests to address potential endogeneity issues in our research design. Our results suggest that, in the small audit market, clients perceive as valuable those auditors with higher social and human capital, and as a result, are willing to pay a premium for these specific auditor attributes.
Journal of Evolutionary Studies in Business-JESB, 2017
In this study, we present a review of research of accounting in family firms. The aim is to summa... more In this study, we present a review of research of accounting in family firms. The aim is to summarize the main findings of prior studies and identify what we have learned so far about the role of accounting in family firms. Specifically, we survey the contributions of accounting researchers to the study of family firms in four subfields: (1) financial accounting and reporting, (2) management accounting and management control, (3) auditing, and (4) accounting history. After considering some theoretical and empirical advancements of family business research in other disciplines, we conclude by identifying avenues for future research.
Originating in a panel presentation at the eighth Accounting History International Conference, th... more Originating in a panel presentation at the eighth Accounting History International Conference, this study offers a reflection on the issues, opportunities and obstacles which may arise when accounting historians engage with other accounting scholars and scholars outside of accounting. Supporting the view that accounting scholars need and should make an effort to engage with other scholars inside and outside accounting, various aspects are considered as enhancing the interdisciplinarity of accounting history research. Then issues such as researchers and the community, research problems, theories, methods and data are addressed. The opportunities arising from interdisciplinary interactions with a wide range of scholars are then developed. Finally, the potential obstacles are addressed. This obstacles can be overcome by the development of robust communication and the invention of a new genre of discourse and research focus and by working with those outside our discipline and embracing the challenge of the new and the different.
Mr. Roel Jannsen, an economics and financial journalist, has written an interesting book on Supre... more Mr. Roel Jannsen, an economics and financial journalist, has written an interesting book on Supreme Audit Institutions (SAIs). In essence, the book is a compilation of interviews of eight current and former heads of audit institutions from across the world. The book is unique in that it brings us the opportunity to 'travel' around the world, visiting the SAIs of different countries. The lessons from the personal experiences of these SAIs' leaders are, indeed, what makes the book particularly interesting. The book is well written, easy to read and fairly short, consisting of 103 pages. Excluding the Introduction, the book contains 8 sections pertaining to the SAIs of Tunisia, Austria, South Africa, the Philippines, Estonia, the United States, Uganda and Iraq. Besides the opinions of the heads of the SAIs, in each section we find a summary of the key statistics and some additional information about each country (e.g., population, GDP) and a brief description of the history of the institution. It also contains some biographical details (and a picture) of the SAIs' leaders. Information about how the local SAI interacts with the International Organization of Supreme Audit Institutions (INTOSAI) is included as well. Given the topic, the approach and the structure of the book, it will be of interest to the general public. In the following, I will briefly discuss the salient points of the different sections and conclude with some thoughts. The prologue 'The pillars of integrity' sets the scene. The history of the Netherlands Court of Audit is used to introduce the key theme of the book: the role of SAIs in today's society. The prologue explains the vital role of SAIs in the accountability of governments, in the efforts to enhance governance in government institutions and in the disclosure of corruption cases. It also introduces three underlying topics discussed throughout the book: the evolving nature of SAIs and their different roles depending on the jurisdiction; the importance of individual leadership; and the current challenges of SAIs. The prologue closes with a commentary about INTOSAI's assistance to national SAIs. The section 'La Cour Est Dans Mon Coeur' focuses on the Tunisian Court of Auditors and its president Faiza Kei. The biographical information about the president underscores her involvement in women's rights movements. Discrimination of women in decision-making was one of the issues she paid attention to during her time in office. In Kei's view, the main duties of the Tunisian SAI are to: act as a watchdog of the political process; perform performance audits; and to fight against corruption. The section includes a brief discussion of the profound effect that the changes in government caused by the Jasmine Revolution in 2011 had on the SAI's role and activities. The section 'Accountability, Transparency and Independence' discusses the Austrian Rechnungshof and the role of Josef Moser, its current president. The recent financial crisis in 695106A CH0010.1177/1032373217695106Book reviewBook review book-review2017
Este trabajo tiene como objetivo analizar el entramado institucional de la reforma contable españ... more Este trabajo tiene como objetivo analizar el entramado institucional de la reforma contable española de 2007. Adoptando como marco teórico la teoría institucional, hemos identificado los grupos de presión que han tenido un peso significativo en el proceso de reforma y las implicaciones directas de su influencia sobre el Libro Blanco de 2002 y sobre el Plan General Contable de 2007. Para realizar el análisis, siguiendo el concepto de isomorfismo de DiMaggio y Powell, hemos clasificado los distintos grupos de interés en función de su capacidad para influir en el proceso. La evidencia empírica que soporta nuestra investigación se obtuvo a partir de las entrevistas realizadas a varios participantes en el proceso. Esta información se complementó con el análisis de documentos oficiales y de las opiniones publicadas en prensa y en revistas especializadas por distintos actores del proceso o personas afectadas por el mismo. Nuestras conclusiones sugieren el dominio del isomorfismo coercitivo en la reforma, a nivel tanto nacional (el papel del ejecutivo, a través del Instituto de Contabilidad y Auditoría de Cuentas) como supranacional (fundamentalmente de la Comisión Europea). También observamos la influencia de otros reguladores, como la Comisión Nacional del Mercado de Valores y el Banco de España, que, con su experiencia en sus ámbitos de actuación, desempeñaron un papel de «líderes» en el proceso en un ejemplo de isomorfismo mimético. Apreciamos además la influencia de presiones normativas con la participación de distintos grupos de expertos (e.g., académicos). Por último, es importante destacar el carácter cambiante y dinámico de dichas influencias a lo largo del proceso de reforma contable.
This article examines the extent to which strategies of specialization and diversification of aud... more This article examines the extent to which strategies of specialization and diversification of audit firms are related to organizational performance. Drawing on the insights of the resource based view (Barney, 1991) as well as on extant research on the determinants of audit fees, our study investigates how performance of audit firms is mediated by (i) specialization on big audit clients; (ii) diversification on clientindustries; and (iii) geographic diversification. Empirical support for this study is gathered from a sample of 168 audit firms that operated in Spain during 1999 and provided audit services to 10,106 clients. Our findings suggest that audit firms that are specialised on big clients and/or are geographically diversified outperform their counterparts that specialise on small clients and/or lessen their geographic scope. Further, our results show that diversification on client-industries has a positive, albeit less significant effect on performance of audit firms. Taken together, these results indicate that big audit firms have the necessary resources and capabilities that ensure a steady, growing organizational performance.
We draw on social capital theory to examine the relationship between audit committee (AC) members... more We draw on social capital theory to examine the relationship between audit committee (AC) members' social capital and financial reporting quality. Using US data for the period 2001-2010, our results suggest that non-AC directors' social capital does not appear to be relevant to financial reporting quality. As far as AC members are concerned, our findings show a negative relationship between their social capital and financial reporting quality, suggesting a 'dark side' to social capital. Specifically, we find that sitting in multiple ACs (centrality) has a negative impact on reporting quality only for those AC members designated as financial experts. When other proxies for social capital are considered (connectedness, brokerage position and strong ties), our results show that the quality of financial reporting significantly decreases with the social capital of non-financial experts sitting in the AC. We contribute to prior research by: (i) relying on social capital theory, which is widely neglected in accounting research, (ii) using multiple metrics to capture the complex dimensions of social capital, and (iii) discriminating between the effects of financial and non-financial experts' social capital on reporting quality. Our results suggest policy-makers might wish to limit financial experts' multiple directorships as well as assess the actual contribution of non-financial experts to AC effectiveness.
International Journal of Critical Accounting, 2012
This article examines the impact of auditing standards intending to reduce the audit expectations... more This article examines the impact of auditing standards intending to reduce the audit expectations gap on auditors' behaviour. Specifically, we examine whether the adoption of an auditing standard ongoing concern evaluation in Spain is associated with changes in auditors' behaviour. Our empirical results suggest that the implementation of the new standard did not impact on auditors' propensity to issue going concern opinions; on auditors' interest on maintaining their reputation; and on the influence of auditors' economic incentives. Our results indicate that the implementation of auditing standards seems not to have an impact on day-today auditing practices, and therefore, auditing standards related to going concern evaluation fail to reduce the expectations gap. Our results also suggest that, in spite of the differences between the regulatory framework of auditing in Spain and in Anglo-Saxon countries (e.g., degree of state intervention), the impact of such standards on auditors' behaviour are comparable.
Extant knowledge on gender and auditing overwhelmingly relies on evidence gathered from a limited... more Extant knowledge on gender and auditing overwhelmingly relies on evidence gathered from a limited group of Anglo-Saxon countries. It is widely admitted, however, that gender issues are affected by the institutional contexts of the investigation. The Anglo-Saxon settings, we contend, embrace a number of idiosyncratic, institutional characteristics that advise caution in the generalizability of results. Our study addresses the role of gender in Spanish audit practice during the period 1942 to 1988. The environment of the Spanish audit profession witnessed the peaceful transition from a dictatorship to a full-edged democracy as well as the emergence of a free market economy from a system characterized by stiff economic autarchy and an overriding intervention of the state in the economy. We found that the dominant role of the state in Spanish society affected the structure of the audit profession and made impossible the emergence of an autonomous project. In particular, our ndings reveal that the audit profession did not have an independent strategy about the role of women at work, but mimicked the attitudes deployed by the state during our observation period.
El objetivo de este trabajo es analizar el impacto de la rotación obligatoria de firmas en la cal... more El objetivo de este trabajo es analizar el impacto de la rotación obligatoria de firmas en la calidad de la auditoría. Dos argumentos opuestos han alimentado el debate sobre la conveniencia de esta medida. Sus defensores argumentan que esta medida refuerza la independencia del auditor y, por tanto, incrementa la calidad de la auditoría. Sus detractores, en cambio, opinan que la rotación destruye el conocimiento específico del auditor y reduce los incentivos a competir en el mercado, disminuyendo la calidad del servicio. La rotación cada nueve años fue obligatoria en España desde 1988 hasta 1995, por lo que contamos con un contexto único para obtener evidencia empírica sobre los efectos de esta norma. Se contrastan dos hipótesis opuestas sobre el impacto de la derogación de la norma sobre la probabilidad del auditor de emitir informes con salvedades por gestión continuada. La muestra está formada por empresas cotizadas españolas con deterioro financiero observadas en un régimen con r...
AUDITING: A Journal of Practice & Theory, 2009
SUMMARY: In this study, we document evidence on the impact of mandatory rotation of audit firms o... more SUMMARY: In this study, we document evidence on the impact of mandatory rotation of audit firms on auditor independence using Spanish archival data. Rotation of audit firms every nine years was mandatory in Spain from 1988–1995. Although the rule was never enforced, the Spanish context provides a unique setting to examine the effects that mandatory audit firm rotation has on auditor behavior. We examine audit reports for a sample of financially stressed companies from 1991–2000 to compare audit reporting behavior in a regime with rotation (mandatory rotation period: 1991–1994) and one without rotation (post-mandatory rotation period: 1995–2000). We test two competing hypotheses concerning the impact of mandatory rotation on the likelihood of auditors' issuing going-concern modified audit opinions. We find no evidence to suggest that a mandatory rotation requirement is associated with a higher likelihood of issuing going-concern opinions. Our results suggest that auditors' in...
Accounting, Auditing & Accountability Journal, 2007
PurposeIn recent international debates on auditing regulation, Spain has assumed a real prominenc... more PurposeIn recent international debates on auditing regulation, Spain has assumed a real prominence as a claimed practical example of where a policy of mandatory audit firm rotation did not work and was duly abolished. This study aims to provide an analysis of the implementation and subsequent removal of mandatory audit firm rotation in Spain in the 1990s.Design/methodology/approachThis takes the form of historical analysis; the evidence in the paper derives from congressional hearings, financial newspapers and documents produced by the professional associations of auditors in Spain.FindingsThis paper demonstrates that at no stage was mandatory rotation of audit firms ever enforced on Spanish auditors. Further, the revision and subsequent removal of the Spanish law on mandatory audit firm rotation emerge as a rather politicized process, with no evident reference being made in the process of legislative reform to Spanish auditing experiences. The analysis also reveals that at the very...
Following the end of General Franco's dictatorship in November 1975, Spain witnessed '… the most ... more Following the end of General Franco's dictatorship in November 1975, Spain witnessed '… the most rapid and pervasive transformations, with no aspect of social, economic and political life remaining untouched.' (Bougen and Vázquez, 1997: 3). These transformations impinged on the audit market, which experienced high growth amid the steady process of deregulation and professional reforms that culminated in the enactment of the Spanish Audit Law in 1988 (Bougen, 1997; García-Benau et al., 1998, 1999). The reforms created a 'new' and modern auditing profession and played an instrumental role in the booming de
Research on the accounting profession considers the notion of boundaries a useful, albeit wide an... more Research on the accounting profession considers the notion of boundaries a useful, albeit wide and elusive, concept. However, recent sociological and organizational research has sharpened the concept of boundaries to enable further examination of relational processes. In this paper, we draw on this research to advance our understanding of the process of constructing boundaries in auditing. In doing so, we focus on the unique institutional conditions in Spain during the period 1850-1988. This period witnessed the overwhelming role of the State in any sphere of economic and social life. In the case of auditing, the influence of the State was augmented as the academic background became the site of influence, which resulted in educational reforms setting professional boundaries. Our findings provide some additional insights into the boundaries construction process and the dynamics of the symbolic and social boundaries contingent on the wider contexts of the audit function.
Aunque la duración del contrato de auditoría ha atraído recientemente gran atención en la literat... more Aunque la duración del contrato de auditoría ha atraído recientemente gran atención en la literatura, sobre todo, por sus posibles efectos sobre la calidad de la auditoría, la investigación no ha aportado hasta el momento una respuesta concluyente sobre esta ...
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