Journal article
Does office size matter in client acceptance decisions? Evidence from big 4 accounting firms
Review of quantitative finance and accounting, v 58(1), pp 383-407
01 Jan 2022
Abstract
This study examines whether audit firm office size affects auditors' risk tolerance in making client acceptance decisions. Analyzing publicly traded client portfolios of the Big 4 audit firms from 2003 to 2012, we find that large Big 4 offices are less likely to accept clients with high audit risk. This is particularly true when auditors face temporary capacity constraints arising from the exogenous demand shock by SOX 404 during the post-SOX 404/pre-AS5 period (2003-2007). However, the negative association between office size and risk consideration in client acceptance decisions attenuates when AS5 coupled with the financial recession results in a temporary capacity surplus in the post-AS5/financial crisis period (2008-2012).
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Details
- Title
- Does office size matter in client acceptance decisions? Evidence from big 4 accounting firms
- Creators
- Yu-Ting Hsieh - National Cheng Kung UniversityChan-Jane Lin - National Taiwan UniversityHsihui Chang - Drexel University
- Publication Details
- Review of quantitative finance and accounting, v 58(1), pp 383-407
- Publisher
- Springer Nature
- Number of pages
- 25
- Grant note
- NSC 100-2917-I-002-041 / National Science Council; Ministry of Science and Technology, Taiwan
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Accounting
- Web of Science ID
- WOS:000663994100001
- Scopus ID
- 2-s2.0-85122477396
- Other Identifier
- 991019168154104721
InCites Highlights
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business, Finance