This study examines effects of mandatory partner rotation (MPR) on audit fees of Australian‐listed companies. Using a fee changes approach, evidence of fee increases in year of the MPR driven by smaller offices of non‐Big 4 auditors is found, consistent with supply‐side resource constraint arguments. Broadly consistent findings are observed using a fee levels approach. Appointment of inexperienced partners to MPR engagements has no discernible effect on fees. Additional analysis of audit reporting lag indicates fee increases reflect additional audit effort as opposed to a pricing strategy. Overall, the evidence supports recent moves by policy‐makers to soften MPR requirements.

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Regulators and previous research have expressed concern about the effect of compensation consultants on CEO pay. We use the Australian setting, where fees for both compensation and other consulting services supplied by compensation consultants are mandated disclosures for all firms, to provide evidence on the role of compensation consultants on CEO pay. We find that the use of compensation consultants or remuneration advisers, fees for compensation services and positive residual compensation service fees are associated with higher CEO pay. In contrast, both the provision and the proportion of fees from other services provided by compensation consultants are not. Furthermore, these positive associations are not observed when a Big 4 accounting firm is the compensation consultant. JEL Classification: G38, M12, M48, M52

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We re‐examine the cross‐sectional stock return predictability of innovative originality documented in the 2018 paper by Hirshleifer et al. and introduce two measures of patenting activity: patent existence and patent counts. As firms with zero patents have zero innovative originality, we conjecture and find a high correlation between patenting activity measures and innovative originality. The findings of Hirshleifer et al. do not hold when we control for patenting activity. Our results highlight that simple patenting activity measures capture a significant portion of innovative originality, and hence need to be adequately controlled for in future innovation studies.

This paper considers whether the association between partner rotation and audit fees varies based on whether the partner is rotated before the interim review or annual report audit. Consistent with prior literature, there is some evidence of higher fees in the year of rotation, but we find this effect is driven by partner rotations that occur before the interim review, which are 7.14% higher on average. We argue that rotations before the annual report audit are less likely to be planned, and thus audit firms cannot pass on increased costs due to a weaker bargaining position. Supporting evidence is provided, as results only persist when client bargaining power is low, and in contrast there are lower fees for rotations that occur before the annual report audit when client bargaining power is high.

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Objective To compare the historical staffing patterns and organisational characteristics of Australian residential aged care facilities (RACFs) against the new minimum staffing standards recommended by the Royal Commission into Aged Care Quality and Safety (RCACQS). Method Retrospective data analysis was used to compare the staffing levels and characteristics of 1705 RACFs (for 4 years, 2016–19) with the three new mandatory staffing requirements. De-identified datasets were provided by the RCACQS, obtained under its legal authority. Results Only 3.8% of RACFs have staffing levels at or above all three requirements. Although many (79.7%) already meet the requirement to have a registered nurse (RN) on-site for morning and afternoon shifts, few have staffing levels above requirements for total direct care per resident per day (10.4%) or care provided by an RN per resident per day (11.1%). Historical levels of on-site RNs, total direct care, and RN care vary significantly across facilities of different size, location and provider scale. Conclusion The new staffing standards, to be mandatory by 2023, prescribe minimum requirements significantly higher than existing levels, particularly in care per resident per day. Each of the three requirements will likely have a differential effect for different types of RACFs. What is known about the topic? International evidence suggests that introducing mandatory minimum staffing standards tends to increase the amount of care provided by staff in residential aged care facilities (RACFs). However, the impact of staffing standards is influenced by the stringency of the minimum threshold relative to existing staffing levels, the capacity of organisations to increase their staffing levels, and the specific way the regulation is formulated. What does this paper add? This paper explores the potential implications of the three national minimum staffing standards, to be in force by October 2023, specifying total direct care, care received by a registered nurse (RN), and an RN on-site. By examining the existing staffing levels of Australian RACFs, it identifies the extent to which facilities already meet the new standards and the characteristics of facilities with staffing levels above and below the three requirements (individually and in combination). What are the implications for practitioners? The study informs both policy and practice in relation to the likely effects of implementing the national minimum staffing standards for residential aged care in Australia. It demonstrates that the new minimum thresholds are likely to require substantial increases in staffing across the sector, both in terms of all direct care workers and RNs. It also shows that the three requirements are likely to have a differential effect for RACFs of different size, location and chain affiliation, thereby guiding policy about the future needs for Australia’s aged care workforce.