A Gap Analysis of a CPA Tax Service and the Implications for Enhancing Service Quality

ABSTRACT

Certified Public Accounting (CPA) firms are “pure” services where the customer is buying the knowledge and expertise of the accounting professional. Marketing the “expertise” of certified public accounting firms is challenging because the client's expected and perceived levels of service quality is not clearly understood. This article presents a service blueprint of an income tax service and highlights potential failure points that can impact process and outcome qualities. Some recommendations are made for improving the tax service to achieve higher levels of service quality.     

Creating and marketing Distinctive Competency in Small Public Accounting Firms

ABSTRACT

Small public accounting firms face fierce competition on a crowded and homogeneous playing field. A framework is available to help accounting firms stand out from the crowd and gain a competitive advantage. Distinctive competencies are skills, activities or capacities that a business is uniquely good at in comparison to its competitors. This article discusses the various kinds of distinctive competencies and the primary competencies suitable for small public accounting firms. The discussion includes the requirements for creating a competitive advantage, steps to creating distinctive competencies, and marketing implications. The conclusion includes suggested research needs.     

Marketing Cues and Perceptions of Service Quality in the Selection of Accounting Firms

Abstract

This study tests the survey responses of clients of accounting firms to determine what marketing cues influence their selection of firms and what relationship these cues have on the perceived service quality of the firms' products. The study argues that three marketing cue factors are influential in the clients' selection of accounting firms. Using Principle Components Analysis, three factors were identified: Factor 1, termed Internal Factors-Tangibles includes the following cues: fees, physical facilities, appearance/dress of employees, convenience of location, and available parking. Factor 2, termed Internal Factors-Intangibles includes reputation of the firm, professional quality of employees, and “my own personal experience with other accounting firms.” Factor 3, termed External Factors comprises the opinion of friends/relatives, manner of employees, and word-of-mouth reputation. The relationship betwecn the resultant cues and perceived service quality measures suggests that the intangible and external factors have more influence than tangible factors on the perceived service quality of accounting firms.     

The Rainmaker in Today's Professional Service Organizations

ABSTRACT

Professional service firms have relied heavily in the past on a small number of rainmakers-people who have influence and bring business into their firms. In today's competitive marketplace, everyone in the organization must be involved in the practice development process. This paper, based on a series of interviews with accounting professionals, identifies the roles and responsibilities for practice development inherent at every stage of the professional accountant's career path. Additionally, the roles and responsibilities of marketing professionals in professional service firms are also considered.     

Strategic Types and Growth Strategies Used by Public Accounting Firms

ABSTRACT

Results of a survey of accounting firms suggests that market penetration is the preferred strategy among accounting firms followed by market development, service development and diversification. Using the Miles and Snow typology, prospectors were most aggressive in their preference for any strategy, followed by analyzers, defenders and reactors. Most small accounting firms were self typed as defenders or reactors suggesting their use of marketing concepts and strategies is limited.     

Customer Service Employees

ABSTRACT

In Singapore, the Company Act requires every company to have an audit every year regardless of the cost and whether the directors and shareholders want one. As there are many professional accounting firms competing for the audit business of these companies, it has become essential that these accounting firms must strive to ensure that their clients are satisfied with the services provided. This paper reports a survey of 1.96 companies with headquarters in Singapore, Japan, Europe and the United States. The survey revealed the reasons for choosing a particular audit firms and the reasons for staying with them. A modified version of the SERVQUAL scale developed by Parasuraman was used to measure both the expectation and performance of service quality. A gap analysis was also carried out to determine the differences.     

Accounting Career Cycles

Abstract

This paper examines the career cycle of accountants in public firms in order to develop methods to extend intra-organizational careers and thus improve customer service. A model of the public accountant's career cycle is developed to facilitate this purpose and expose the effects internal CPA firm policies have on small business clients. Accounting firms are encouraged to revise existing career development patterns. Small businesses should consider implications of potential consultant career cycle policies on perceptions of engagement quality and costs.     

Andersen and the Market for Lemons in Audit Reports

Previous accounting ethics research berates auditors for ethical lapses that contribute to the failure of Andersen (e.g., Duska, R.: 2005, Journal of Business Ethics 57, 17–29; Staubus, G.: 2005, Journal of Business Ethics 57, 5–15; however, some of the blame must also fall on regulatory and professional bodies that exist to mitigate auditors’ ethical lapses. In this paper, we consider the ethical and economic context that existed and facilitated Andersen’s failure. Our analysis is grounded in Akerlof’s (1970, Quarterly Journal of Economics August, 488–500) Theory of the Market for Lemons and we characterize the market for audit reports as a market for lemons. Consistent with Akerlof’s model, we consider the appropriateness of the countervailing mechanisms that existed at the time of Andersen’s demise that appeared to have effectively failed in counteracting Andersen’s ethical shortcomings. Finally, we assess the appropriateness of the remedies proposed by the Sarbanes–Oxley Act of 2002 (SOA) to ensure that similar ethical lapses will not occur in the future. Our analysis indicates that the SOA regulatory reforms should counteract some of the necessary conditions of the Lemons Model, and thereby mitigate the likelihood of audit failures. However, we contend that the effectiveness of the SOA critically depends upon the focus and attention of the␣Public Companies Accounting Oversight Board (PCAOB) towards assessing the ethical climates of public accounting firms. Assessments by the PCAOB of public accounting firm’s ethical climate are needed to sufficiently ensure that public accounting firms effectively promote and maintain audit quality in situations where unconscious bias or economic incentives may erode the public accounting firm’s independence.     

Social capital in service-oriented firms: future directions

Abstract

This collection aimed to provide a broader picture of the implications of social capital in service-oriented firms. In this piece, we identify trends for future research on social capital with a focus on the services industry, an important sector of the economy. We focus on three future directions: the internationalization of service firms, social capital for service-oriented social enterprises and public policy programmes to create social capital, particularly in the context of Asia Pacific. We then identify how the contributions to this collection are related to these future directions to encourage more confirmatory work in this dynamic field of research and practice on social capital in service-oriented firms in the Asia Pacific region.     

Individual Differences Among Service Employees

SUMMARY

To do an excellent job of managing external relationships, service firms must be prepared to do an excellent job of managing internal relationships. This effort begins with recruiting, selecting, and retaining employees who are likely to serve customers well. While service firms strive to match the knowledge, ability, and skills of potential employees to the requirements of the job, most do not have the time or the resources to implement elaborate recruitment and selection systems. This is especially true among services where relatively high turnover levels mandate that recruitment and selection processes be fast and inexpensive. To meet this challenge, managers often focus on a set of easily identifiable individual characteristics, such as experience, job tenure, age, or education that can be assessed during the time of an interview or scan of a job application. This study examines the effect of these characteristics on the attitudes and responses of service employees that are critical for the effective delivery of quality service (job satisfaction, self-efficacy, role stress, organizational commitment). The results indicate that satisfied and committed service employees tend to be older, better educated, and possess a great deal of service experience. These employees also appear to be better able to handle the stress associated with service positions. These characteristics are atypical of the service industry, where employees tend to be younger, possess relatively little experience in any one industry, and are less educated. Implications for managing the recruitment, selection, and retention of service employees are offered, as are directions for future research.     

Marketing by CPAs

Abstract

Until the late 1970s, the AICPA discouraged commercial advertising and some other marketing tactics by practicing accountants. This study contacted 600 CPAs in the U.S. in an attempt to discover what kinds of marketing they employ, how useful they think it is, and how appropriate do they feel the AICPA's rules and regulations are in regard to marketing an individual CPA's services. Most thought the AICPA was fair. Accountants doing the most marketing tend to be younger males. “Conflict of Interest” was the area of most current concern in light of the ongoing problems of public accounting firms doing both auditing and consulting for the same client. “Newspaper” was the preferred advertising medium. Most of those surveyed were pleased the AICPA relaxed its restrictions on marketing and advertising, even though many CPAs still do not market their services to any great extent. This may change as younger accountants fill leadership positions in U.S. accounting firms.     

Use of Professional Journal Ads to Promote Accounting Services

ABSTRACT

This paper presents an examination of professional journal advertising by professional accounting firms. Advertisements in the three most widely distributed professional accounting journals were analyzed to ascertain the extent of advertising by accounting firms. Research questions included the following: (1) What is the message or purpose of the ads? (2) What size ads are preferred? (3) What is the information content (firm's location, phone number, etc.) of the ads? (4) Which firms advertise the most?

The findings indicate that the most common advertising message concerned selling computer software, followed by employee recruitment. The most common size ads were between a quarter of a page and a page. Information content ranged from phone number and address to professional credentials and specialized services. Advertisements were widely used by both Big Six and non-Big Six accounting firms. The extent of advertising among Big Six firms, however, is highly varied, with Arthur Andersen & Co. generating the most ads. Advertising allows firms the opportunity to reach consumers, provide useful information, and distinguish themselves from other firms.     

The war for talent: human capital challenges for professional service firms

Abstract

Professional service firms face particular human capital challenges. This study reflects on the distinctive characteristics of professional service firms through the concepts of knowledge intensity, low capital intensity and professionalized workforce. Based on in-depth interviews with 21 partners of Australian law firms, we provide empirical evidence on the war for talent challenges faced by professional service firms and in particular, law firms. The findings point to talent management challenges including reputation building and maintenance, employee autonomy, knowledge acquisition, revenue and profitability through internationalization, managing knowledge across borders, managing employee mobility, talent acquisition and retention, talent engagement, performance management and developing leadership capability. These challenges are important issues to be considered by professional service firms as they attempt to compete more effectively in global business contexts.     

Employee Turnover in International Brand Hotels in Russia: A Comparison of Nationals and Foreign Nationals

ABSTRACT

This empirical study tests the relations between employee turnover and the organizational dimensions of service climate, comparing nationals and foreign nationals in the international brand Russian hotel industry. This study extends the geographic scope of employee turnover to the undertested Russian context. Responses were analyzed using a partial least squares model. Results show that nationals’ and foreign nationals’ responses to model variables diverge. Job insecurity directly affects the turnover intentions of Russian nationals, while its effect for foreign nationals was indirect through organizational commitment and job satisfaction. Compounded indirect effects of turnover antecedents and service climate dimensions are also examined and discussed.     

Accounting Frauds and Main-Bank Monitoring in Japanese Corporations

This study examines whether the delegated monitoring of main banks effectively decreases severe agency problems. For example, this includes accounting fraud in bank-dominated corporate governance. In this context, the fraud triangle specifies the three main factors of opportunity, incentive, and rationalization. Main banks may reduce the factor of opportunity through actions such as monitoring, which plays a moderating role by reducing the potential for managerial misconduct, whereas, the incentive factor may be enhanced through the subsequent pressure that influences managers to force turnover when they do not repay debts. The potential influence that the main banks have on the fraud rationalization factor may be stronger in firms that are more dependent on main-bank borrowing. This study analyzed data from publicly listed firms in Japan for the period between 2008 and 2016 to determine how main-bank relationships affected accounting fraud, thus allowing an assessment of delegated monitoring practices. Findings showed that main-bank relationships were helpful for reducing accounting fraud, suggesting its overall effectiveness in delegated monitoring. Results also showed that large audit firms did not necessarily prevent accounting fraud, which implies that main banks can employ their own monitoring as a substitute for the roles typically played by these firms. Here, the main policy implication is that main-bank relationships may strengthen business ethics in the context of bank-dominated corporate governance. In conclusion, the continued analysis of bank monitoring may benefit stakeholders while strengthening business ethics in bank-centered economies.

     

Analysis of Relative Growth Rates Between Domestic and International Earnings of U.S. Based Publicly Traded Restaurant Firms

ABSTRACT

This study explores the relative growth rates in earnings of public restaurant firms for a 20-year period from 1981-2000. No significant differences were found in sales growth between multinational and domestic restaurant firms. However, multinational firms significantly outperformed domestic firms in growth of operating income and pre-tax profitability. Multinational restaurant firms also had significantly lower negative growth in domestic earnings when compared to domestic firms. The results imply that multinational restaurant firms are more efficient than domestic firms in converting sales into profits.     

Customer Satisfaction with Consumption Systems

ABSTRACT

Purpose: This research examines how satisfaction toward a product and its associated services offered together by a single provider jointly affects behavioral intentions toward the provider.

Design/methodology/approach: In this study, empirical tests were conducted using longitudinal data spanning 5 years from a multinational company that offers both products and associated services as part of a consumption system to their customers.

Findings: Results show a joint congruent effect of product and services satisfaction on behavioral intentions is linear and positive. It appears that offering great service cannot compensate for less-than-adequate satisfaction toward the product. The results further highlight decreasing customer sensitivity to improvements in both sources of satisfaction and imply that focusing on too high levels of one type of satisfaction for their customers can actually be counterproductive for firms.

Research Limitations: Our model was tested using the data obtained from a single firm. Future research could test this model with data from multiple firms in various different industries and establish broader generalizability to the findings.

Practical Implications: Findings provide managers with insights on how to allocate resources across product and service spaces and to manage product and services revenues over time. Results also indicate that customer behavioral intention ratings are more weighted on product quality over the service received by them. However, mere improvements in the product cannot provide the highest desired results and therefore quality improvements in the product need to be complemented by improvements in service quality.

Originality/Value: There is a rapid emergence of the phenomenon of manufacturers providing both products and services as an integrated consumption system to their customers. While the provision of both product and service subsystems by the same firm leads to certain synergies, there are obvious costs to the development of new service capabilities and coordination with existing product capabilities. Our research intends to address this issue.     

Key service drivers for high-tech service brand equity: The mediating role of overall service quality and perceived value

Abstract

This study investigates how different aspects of service quality could have effects on overall perception of service quality, perceived value, and service brand equity. Based on a survey of active users of mobile telecommunications services in Taiwan, we obtained the following findings. First, we found that empathy, network quality, reliability, and assurance, but not tangibles and responsiveness, have a significant effect on service quality and value perception. Second, the effect of overall service quality on brand equity is partially mediated by perceived value. Third, overall service quality has differential mediation effects on the relationships between specific service quality dimensions and perceived value. Finally, empathy and network quality have direct effects on brand equity. For managers, our study suggests the importance of identifying key service drivers for building strong service brand for high-tech service firms. The identification of key service drivers could then enable these firms to make strategic decisions on services investments. It also demonstrates the importance of the humanisation of technology for services firms. This study is original in that it explores the path from specific services qualities to service brand equity.     

Reasons women chartered accountants leave public accounting firms prior to achieving partnership status: A qualitative analysis

This paper reports on the stories told by 13 Canadian women Chartered Accountants (CAs)—why they pursued the CA designation and why they chose to leave public accounting firms. Their stories provide deeper insights into the previously reported reasons for female CAs leaving firms that are often reported within broad categories. Work-family issues received limited attention in the participants' stories. Two major themes emerged: the absence of stated aspirations/desire to become a partner; and frustrations with the intrinsic and monetary value of services delivered by public accounting firms. The implications of these findings for the profession and public accounting firms are examined and future research directions are discussed. Copyright © 2009 ASAC. Published by John Wiley & Sons, Ltd.     

Boundary spanner turnover in professional services: Exploring the outcomes of client retention strategies

Abstract

Studies suggest that the termination of the interpersonal relationship between boundary spanners at buyer and seller firms can have a damaging effect on the inter organisational relationship. Few studies have addressed this issue in detail, but those that do, advise supplier firms to implement strategies such as service teams and boundary spanner rotation to lessen the negative effects of boundary spanner turnover. By creating multiple bonds between the two firms, dispersing client-specific knowledge widely throughout the supplier firm, and preventing the development of a close bond between buyer and seller boundary spanners, individual interpersonal relationships become less important. However, a review of relationship literature on trust, commitment, social bonds, and knowledge suggests the potential for negative outcomes from the implementation of the strategies. Using case studies and one-to-one interviews with design buyers and their agencies, this paper explores the outcomes of the two strategies, and the contexts in which these outcomes occur. Adopting a critical realist approach, findings are presented in the form of context–mechanism–outcome models. Agency size, agency culture, client experience, and boundary-spanner autonomy are amongst the contexts that influence the outcome of strategy implementation.