Organizational justice and turnover in public accounting firms: a research note

This study investigates the links between organizational justice and turnover at large public accounting firms. The primary justice issue discussed in the study is the perceived fairness of decisions involving pay and promotions. Fairness is examined in terms of the consistent application of standards across individuals in the firm's decision-making. To explore these issues, a survey was distributed to three large accounting firms in a major Canadian metropolitan area. Survey results from 76 accountants suggest that fairness perceptions influence turnover intentions through the intermediaries of organizational commitment and job satisfaction.     

Shunning careers in public accounting firms: The case of Indonesia

A rapidly growing emerging economy such as Indonesia has an increasing need for qualified accountants to service the many needs of business. However, the current dearth of qualified accountants is becoming critical, and this situation will only get worse as Big 4 firms, mid-tier firms and local firms struggle to recruit enough trainees to qualify as professional accountants. This study examines the plight of the Indonesian accounting profession by investigating why accounting students are shunning the profession, possibly leading to the demise of the Indonesian profession as we know it today.The study shows that although career intention constantly changes as new experiences are encountered, background factors matter. Ethnicity, living in an urban or rural environment, and where one is educated all matter to career intention. Further, one's own self-efficacy, such as English language ability, and other people's views are all influential in where we want to work.To address this looming crisis in the profession the Indonesian government needs to implement policies that ensure that the education curriculum addresses English language literacy, especially in rural areas; and the profession needs to engage more with remoter universities in rural locations to recruit high achieving students to provide greater diversity in the profession.     

An investigation of certain interactions between large CPA firms and accounting educators

Some accounting educators have questioned whether selected interactions between the “Big Eight” accounting firms (Firms) and accounting educators might affect the academic freedom and independence of accounting educators. This study compares the current and normative attitudes of accounting professors about certain areas of these interactions and concludes that a significant difference exists between the attitudes of the current and the normative groups. The implications of this finding are discussed.     

Mentoring and turnover intentions in public accounting firms: A research note

Turnover in public accounting firms is a critically important issue as firms seek to retain quality accounting personnel in the face of skilled labour shortages. Mentoring is one initiative that has been suggested as a means of reducing the high costs associated with employee turnover. However, prior accounting research examining the association between mentoring and turnover intentions has produced mixed results, which may be due, at least in part, to difficulties in operationalizing the mentoring construct. Drawing on recent management literature regarding organizational turnover intentions, we challenge the conventional view that mentoring generally leads to reduced turnover intentions, by testing a theoretical model that posits that different functions of mentoring have differing effects on turnover intentions. Specifically, we argue that while the psychosocial support function of mentoring can serve to reduce public accountants’ turnover intentions, the career development function of mentoring has the potential to increase turnover intentions. Results support this conclusion.     

The power of control: the acquisition decisions of newly public dual-class firms

Many private firms that go public opt for a dual-class share structure which gives insiders stronger voting power, at the expense of shareholder democracy. We examine how the dual-class structure influences the merger decisions of newly public firms, which have a notable appetite for acquisitions. Specifically, we compare acquisition activity, method of payment choice, and the long-run value implications of acquisitions by newly public single-class and dual-class US companies. Our results show that dual-class IPO firms make relatively more acquisitions in innovative industries and are less likely to pay with stock as compared to single-class IPO firms. The reluctance of dual-class firms to pay with stock is positively related to the wedge between the insiders’ voting rights and cash-flow rights. We also find that newly-public dual-class acquirers perform better in the long-run than newly-public single-class acquirers, mainly due to dual-class acquisitions in innovative industries. Our multivariate analysis shows that these findings hold after controlling for relevant risk factors associated with industry, deal, and firm specific characteristics. These results suggest that the dual class structure may enable newly-public firms to make better M&A decisions after going public.     

Desired attributes of public accounting firms in the job selection process: an empirical examination of accounting graduates' perceptions

The purpose of this study is to identify attributes of public accounting firms that accounting graduates find most desirable in their job selection decisions, and the impacts of individual differences on these perceptions. Factor analysis performed on the responses of 167 final-year accounting students in Hong Kong to a 30-item questionnaire identified seven factors. The results indicate that accounting graduates considered help in finishing their professional accounting examinations and good staff relationships as the most important criteria in their choice of employers. In addition, female accounting graduates were more concerned about the possibility of being required to travel or be transferred, but were less concerned about the reputation and profile (such as the client base and the size) of the firms than their male counterparts. Accounting graduates with a higher grade point average (GPA) were less concerned about the working environment, but more concerned about a firms' reputation and profile than those with a lower GPA. The implications of these results are discussed.     

Sources of professional staff turnover in public accounting firms: Some further evidence

A recent article by Rhode et al. (1977) identified 39 variables associated with professional staff turnover in public accounting firms. The present study attempted to extend this prior work by examining the antecedents of the turnover act, namely those variables associated with the turnover decision. Using a valence-instrumentality-expectancy framework, measures of task outcome valence and instrumentality were evaluated with turnover expectations for a sample of 306 staff-level accountants. The findings indicated that the turnover decision was largely a function of negatively-valued task outcomes and the likelihood of obtaining these outcomes in one's current position, and the higher likelihood of obtaining certain positive outcomes in alternative positions.     

The organizational culture of public accounting firms: evidence from Taiwanese local and US affiliated firms

This study examines the organizational cultures of public accounting firms with data from US affiliated international accounting firms in Taiwan and Taiwanese local firms. Hypotheses are tested about the impact of the national culture of the US firms on their Taiwanese affiliates, and about cultural differences across function and rank. The study extends previous research by (1) examining an oriental country whose culture is significantly different from that of the US, (2) using the Hofstede, G., Neuijen, B., Ohayv, D. D., & Sanders G. (1990). Measuring organizational cultures: a qualitative and quantitative study across twenty cases. Administrative Science Quarterly, 35, 286–316 practices-based measure of organizational culture, and (3) examining the importance of the fit between employee preferences and organizational culture in influencing organizational commitment, job satisfaction and propensity to remain with the organization. Support is found for the cultural impact and fit hypotheses. Additonally, while culture is found to be relatively homogeneous across function, differences are found across rank.     

An analysis of the effectiveness of public accounting internship programs at major New York city CPA firms

This study examines the effectiveness of public accounting internship programs at large CPA firms in New York City. It was found that these programs are effective in helping interns obtain a better understanding of professional practice except in the area relating to specialization.     

Voluntary IAS 1 accounting disclosures prior to official IAS adoption: An empirical investigation of UK firms

This paper focuses on firms’ voluntary compliance with the reporting requirements of the International Accounting Standard (IAS) 1 before the official adoption of IASs. The paper seeks to identify the motives for the voluntary adoption of IAS 1 and investigates the relation to the provision of voluntary accounting disclosures, the increase in equity capital, managers’ remuneration and firms’ stock returns. The study shows that the decision-making process of firms is significantly influenced by the intention to improve key financial measures, such as leverage, profitability and growth. Firms would tend to adopt an accounting policy or regulation when they feel that adoption would favourably impact on their financial situation. For example, the study indicates that firms voluntarily adopted IAS 1 before the official IAS adoption date in order to provide evidence of superior managerial ability and high quality reported accounting information. It is found that firms that perform well are more motivated to voluntarily abide by IAS 1. The study also reports that firms that provide voluntary accounting disclosures and perform increases in their equity capital appear to voluntarily adopt IAS 1. Similar findings are obtained for firms that display higher management remuneration and stock returns.     

Sources of professional staff turnover in public accounting firms revealed by the exit interview

Employee and employer stated reasons for leaving public accounting were studied together with the conditions surrounding departure and the best and least liked qualities of CPA firm work. Data collected after employee terminations on selected aspects of the work was shown to be a good predictor of whether employees left of their own volition or at the request of the firm and revealed several areas suitable for improving personnel relationship and reducing professional staff turnover.     

会计师事务所品牌建设中的文化内涵——基于会计师事务所与一般企业的比较分析

会计师事务所的人合特征、社会责任和专业属性决定了其在品牌建设方面有着与一般企业不同的要求和内涵。会计师事务所品牌建设的核心是文化的建设,文化建设包括择善固执的诚信文化、戒慎恐惧的风险文化和执经达变的执业文化三个方面。作为一个市场主体,会计师事务所也需要进行品牌建设并在市场中推广,本文就以品牌建设和推广为导向的会计师事务所社会与企业属性中的文化内涵作一些分析,寻找具有会计师事务所特质的品牌建设与推广策略与方式。     

The job satisfaction of higher level employees in large certified public accounting firms

This research study is divided into two parts. In the first part differences between audit, tax and management services (MS) specialists holding positions of Senior or higher and employed by large CPA firms are examined on three dimensions: (1) job satisfaction, (2) personal characteristics and (3) job features. Using multivariate analysis several differences between MS specialists and audit tax specialists as a combined group are detected. However, no statistically significant differences were found on the three dimensions between audit and tax specialists. The second part of the study concerned predicting the job satisfaction of audit, tax and MS specialists using personal characteristics and job features as independent variables in multiple regression. Moderate success was achieved in predicting the job satisfaction of audit and tax specialists, but predicting the level of job satisfaction of MS specialists was unsuccessful. The results of this study have policy implications for large CPA firms as well as research implications for job satisfaction researchers.     

Judges' attitudes toward the public accounting profession: An update

This study examines U.S. judges' attitudes toward the public accounting profession and the extent to which they have changed over the last 16 years: (a) early in the decade of the 1990's (1993), (b) late in the decade of the 1990's, but before the Enron and subsequent corporate accounting debacles (1997), (c) three years after the Enron debacle (2003), and (d) following the recent market collapse related to the failures of our financial institutions (2009). As previously reported (Reckers et al., 2004) attitudes of judges toward the public accounting profession are known to be representative of the views of other stakeholders (lawyers, jurors and MBAs) and would be expected, and have been found, to be relatively stable over time. Nonetheless attitudes are subject to change if given a substantial stimulus and the corporate debacles at the beginning of this decade, the corresponding CPA firm litigation and the demise of Arthur Andersen arguably constituted such a stimulus. It was reported that a significant erosion of judges' attitudes toward the public accounting profession could be measured in 2003 (Reckers et al, 2004). Given that judicial attitudes have been found to be significantly correlated with judgments rendered in a laboratory experiments, sharp erosion of attitudes is a concern. Judges were re-examined in 2009 to determine if attitudes had potentially rebounded. Reasons to expect attitudes may have rebounded include (a) expectations related to federal reforms of the auditing profession (e.g., SOX, PCAOB), (b) lack of recent accounting scandals, and (c) the financial institutions debacles of 2008. In comparison to the perceived abuses of the financial industry revealed in 2008, the earlier accounting abuses may have faded away.     

Using modeling languages in managerial accounting: An example for pricing decisions

This paper presents a modeling approach useful for accounting applications. The capabilities of modeling languages, like IFPS, enable managers to make complex analysis with relative ease and efficiency by focusing attention on management goals. The variable over which management has some degree of control can be manipulated to determine sensitivity of variable changes on desired outcome. The ease of manipulation and goal-seeking capabilities available in modeling languages produce greater insight into the decision making process. The application demonstrated in this paper is cost-volume-profit analysis viewed from the pricing perspective.     

An examination of professional commitment in public accounting

This study analyzes the professional commitment of Canadian Chartered Accountants who are partners, managers (supervisors) and other staff CAs in public practice. This commitment is examined in relation to organizational commitment, professional-organizational conflict, satisfaction with income and organizational level. The commitment to organization is shown to be the most powerful predictor of CAs' professional commitment in all organizational levels. At the same time, professional-organizational conflict has a negative impact on professional commitment, and satisfaction with income has a positive influence on such a commitment.     

An empirical examination of stress in public accounting

This paper presents the results of an investigation of stress in public accounting, using a national sample of certified public accountants. The relationship between a set of predictor variables (organizational stressors and work/home conflict) and a set of criterion variables (job-related tension, job dissatisfaction, and propensity to leave public accounting) was analyzed using canonical correlation analysis. Job-related tension was associated with heavy work demands; job dissatisfaction and intension to leave were associated with slow career progress, unfulfilling jobs, and unclear job objectives.     

Understanding accounting as a career: an immersion work experience for students making career decisions

This paper reports on a project which is designed to increase the participation of high school students in accounting work experience placements. The focus of the paper is on an Australian-based project which overcomes the identified barriers to offering high school accounting work experience placements with a resultant increase in the number and quality of placements offered. The research project responds to a decline in both the number and quality of students enrolling in accounting degree programmes in Australia. The paper draws on the work experience, social psychology, careers, and accounting education literatures to design a ‘connective’ model (Guile &; Griffiths, 2001 Guile, D., &; Griffiths, T. (2001). Learning through work experience. Journal of Education and Work, 14(1), 113–131. doi: 10.1080/13639080020028738[Taylor &; Francis Online] , [Google Scholar]) of accounting work experience for high school students. The project adopts an action research methodology which engages professional accounting practice, high school career advisors, and the university sector to deliver a structured work experience programme which addresses barriers to participation in accounting work experience and improves the quality of the work experience ‘experience’ for both employers and students.