The geographic decentralization of audit firms and audit quality

• 成果类型: Article
• 署名作者: Beck, Matthew J.; Gunn, Joshua L.; Hallman, Nicholas
• 署名单位: University of Kansas; Pennsylvania Commonwealth System of Higher Education (PCSHE); University of Pittsburgh; University of Texas System; University of Texas Austin
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2019.101234
• 发表日期: 2019
• 关键词: industry expertise; office size; big 4; KNOWLEDGE; client; IMPACT; matter

摘要

Audit firms are organized as collections of geographically decentralized offices. Decentralization allows for increased proximity between offices and clients, improving the efficiency of auditors' interactions with client personnel. Yet decentralization also decreases the proximity between offices within each firm, potentially impeding auditors' interactions with each other. We show that decreased proximity between offices reduces inter-office audit quality spillovers and that this effect is driven primarily by reduced monitoring and knowledge sharing. Our findings expand the within office view of audit production by demonstrating the importance of interactions between offices and the role of geographic proximity in facilitating them. (C) 2019 Elsevier B.V. All rights reserved.