Who makes partner in Big 4 audit firms? – Evidence from Germany

Downar, Benedikt; Ernstberger, Jürgen; Koch, Christopher

doi:10.1016/j.aos.2020.101176

Cited by 30 publications

(27 citation statements)

References 60 publications

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“…Although the funds’ auditors are limited with respect to the auditing services they provide, based on the engagement letter, they have incentives to provide additional value to the fund client beyond the scope of the audit to retain the client or to collect additional fees (Ettredge et al., 2014). Social capital from retaining good relationships with clients is very important for making partners in audit firms (Downar et al., 2020). This is especially the case in China, where the audit market is highly competitive.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Information sharing between mutual funds and auditors

Hope

Rao

et al. 2022

Business Fin & Account

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This paper examines whether there is information sharing between mutual funds and their auditors about the auditors’ other listed firm clients. Using data from the Chinese market, we find that mutual funds earn higher profits from trading in firms that share the same auditors. The effects are more pronounced when firms have a more opaque information environment and when the audit partners for the fund and the partners for the listed firm share school ties. The evidence is consistent with information flowing from auditors to mutual funds, providing mutual funds with an information advantage in firms that share the same auditors. Our findings are robust to the use of audit‐firm mergers and acquisitions (M&As) as exogenous shocks and several other robustness checks. We further find that auditors benefit by charging higher audit fees for mutual fund clients and by improving their audit quality for listed firm clients. Our study provides evidence of bi‐directional information sharing between two important market intermediaries.

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Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Information sharing between mutual funds and auditors

Hope

Rao

et al. 2022

Business Fin & Account

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“…Social capital can be viewed as a tool for increasing auditors' competence in performing audit tasks in audit firms. Auditor interaction with other auditors can engender knowledge spillovers that can develop their skills and expertise and create a competitive advantage that is hard for competitors to mimic (Bianchi et al, 2020;Downar et al, 2020;Hau et al, 2013). Bianchi et al (2020) concluded that auditors with more social networks are in a superior position to obtain valuable specialised information that develops their competence.…”

Section: The Effect Of Social Capital On Audit Quality Inputs Through...mentioning

confidence: 99%

“…Moreover, while previous studies revealed the influence of knowledge sharing on audit quality (Duh et al , 2020), they did not account for the enablers that facilitate auditors’ knowledge sharing within audit firms. Tacit Knowledge sharing requires social interaction between auditors, which is impacted by the strength of auditors’ relationships (Downar et al , 2020). Auditors’ social capital can play a crucial role in forming relationships and guiding the intention to share tacit knowledge (Bol et al , 2018; Downar et al , 2020).…”

Section: Introductionmentioning

confidence: 99%

“…Tacit Knowledge sharing requires social interaction between auditors, which is impacted by the strength of auditors’ relationships (Downar et al , 2020). Auditors’ social capital can play a crucial role in forming relationships and guiding the intention to share tacit knowledge (Bol et al , 2018; Downar et al , 2020). Social capital is defined as “the sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit” (Nahapiet and Ghoshal, 1998, p. 243).…”

Section: Introductionmentioning

confidence: 99%

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Tacit knowledge sharing in small audit firms and audit quality inputs: the antecedent effect of auditors’ social capital

Albawwat

2021

JKM

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Purpose Drawing on the International Auditing and Assurance Standards Board (IAASB) audit quality framework and related knowledge management literature, this study aims to examine the influence of tacit knowledge sharing on audit quality inputs within small audit firms’ realm. It also investigated auditors’ social capital antecedent effect via tacit knowledge sharing on audit quality inputs. Design/methodology/approach An integrated model was developed to depict the study constructs’ relationships. The model was then tested using the partial least squares structural equation modelling based on data collected from auditors belonging to small audit firms in Jordan. Findings The results indicate that tacit knowledge sharing influences positively the auditors’ values, ethics, attitudes, experiences, skills and knowledge (i.e. audit quality inputs). This finding implies that active tacit knowledge sharing within a small audit firm is a strong driver for audit quality through improving its inputs. The results also demonstrate that structural, relational and cognitive social capital indirectly affect audit quality inputs through tacit knowledge sharing. Accordingly, social capital can be viewed as an audit firm resource that can smooth auditors’ tacit knowledge-sharing progress. Originality/value The IAASB encourages audit firms to explore ways to boost audit quality. This study offers empirical evidence on the influence of tacit knowledge sharing on audit quality inputs as a way to boost audit quality. It also offers insights into the value of social capital dimensions and indicates the driving forces to make auditors willing to engage in tacit knowledge sharing and, as a result, improve audit quality inputs.

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“…The Western and Central European studies report a low representation of women in managerial posts in audit firms and gender bias towards them [2,3]. In contrast financial and insurance activity in RK encompassing the audit field is a female-dominated industry with 65.5% of employed women against 34.5% of men in large-and medium-sized enterprises [1, p. 80].…”

Section: Introductionmentioning

confidence: 99%

Impact of business owner’s gender on the audit firms income: the case of Kazakhstan

Lipovka

Rakhimbekova

Zaluchyonova

2022

jour

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Kazakhstan is characterized by women’s significant representation in the financial industry, including the audit sector, which distinguishes the country from other states and can lay the basis for a competitive advantage of the economy. The literature review on audit firms in Kazakhstan showcases a scarcity of studies about gender’s influence on audit firms’ financial performance. The paper aims to identify the correlation between business owners’ gender and the net income of Kazakhstani private audit firms. The publicly available data on audit companies and the size of their paid taxes were processed and analyzed with the quantitative research method. The data of 117 audit firms for 2021 were scrutinized through the parametric Student t-test for independent samples with the utilization of the Statistical Package for the Social Science (SPSS). To analyze and adjust the normal distribution of the studied data, frequency histograms, taking logarithms, and formalized tests by Kolmogorov-Smirnov and Shapiro-Wilk criteria were applied. The findings demonstrate the significant correlation between women owners and the size of paid taxes by their audit firms: women positively contribute to audit firms and generate higher net earnings compared with their men counterparts. The paper postulates the necessity of women’s more intensive involvement in higher levels of decision-making to increase the performance indicators of the financial industry in Kazakhstan. The study supports the idea that less gender bias in the expert field can be a good indicator of women's real contribution to Kazakhstan's economy. The auditing field should serve as a solid role model for lowering the barriers to female leadership in other industries.

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Who makes partner in Big 4 audit firms? – Evidence from Germany

Cited by 30 publications

References 60 publications

Information sharing between mutual funds and auditors

Information sharing between mutual funds and auditors

Tacit knowledge sharing in small audit firms and audit quality inputs: the antecedent effect of auditors’ social capital

Impact of business owner’s gender on the audit firms income: the case of Kazakhstan

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