The revival of large consulting practices at the Big 4 and audit quality

Donelson, Dain C.; Ege, Matthew; Imdieke, Andrew J.; Maksymov, Eldar

doi:10.1016/j.aos.2020.101157

Cited by 51 publications

(25 citation statements)

References 63 publications

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“…More field research similar to the present study is needed to assess any changes imposed by regulatory intervention or standards and assess how these affect internal quality controls within audit firms and whether this ultimately leads to a more consistent audit quality level for audit firms. Numerous stakeholders depend on audit quality to make lending, investment, credit, supply and many other decisions (Donelson et al , 2020). This study specifically sought to examine the perceived impact of the KAM reforms in Australia and if these disclosures added value to audit reports and/or improved audit quality.…”

Section: Discussionmentioning

confidence: 99%

The perceived impact of the KAM reforms on audit reports, audit quality and auditor work practices: stakeholders’ perspectives

Nguyen

Kend

2021

MAJ

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Purpose The purpose of this study is to understand how the new reforms related to key audit matters (KAM) disclosures in Australia may have impacted audit quality by eliciting the perceptions of key stakeholders in the audit and assurance services market. Design/methodology/approach The study uses a qualitative approach and New Institutional Sociology (NIS) to explain how auditors have responded to the KAM reforms. Interviews were conducted with 20 individuals representing identified groups of stakeholders in the market for audit and assurance services in Australia. Findings The study finds there is little consensus between some stakeholder groups on whether the KAM reforms may have improved audit quality, based on the perceptions shared. The findings conveyed that the auditors and regulators, standard setters acknowledge that KAM disclosures are either costly and/or time-consuming to implement. The Big Four auditors indicate these reforms led to changes mainly around internal consultations and independent reviews, whereas the non-Big Four auditors highlighted increased interactions with audit clients. Originality/value This is one of the first studies to examine the perceived post-implementation impacts on audit quality of the KAM reforms (ISA 701) after the initial two years of implementation and how auditors have responded, explored through the lens of institutional logic.

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Section: Discussionmentioning

confidence: 99%

The perceived impact of the KAM reforms on audit reports, audit quality and auditor work practices: stakeholders’ perspectives

Nguyen

Kend

2021

MAJ

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“…Nonetheless, the big firms are now focusing heavily on non-audit consultancy services rather than on auditing practice (Donelson et al, 2020), and this could cause problems for the accounting profession.…”

Section: Section 6: Discussionmentioning

confidence: 99%

“…Hopper et al (2017) have documented how the International Federation of Accountants and the International Accounting Standard Board continue to be obligated to the Big 4 firms. This suggests that the Big 4 firms are power bases, seeking to control the profession to promote their interests, as seen in the move toward nonaudit consultancy services (Boussebaa, 2017;Boussebaa and Faulconbridge, 2019;Donelson et al, 2020). Thus, the Big 4 firms have a significant influence on the professionalization processes.…”

Section: Accounting Professionalizationmentioning

confidence: 99%

“…This change threatens the accounting profession through a reduced emphasis on fiduciary logic, which is much needed (Thornton et al, 2005). Donelson et al (2020) found that regulators are cautious as the Big 4 firms shift their focus outside their auditing practice toward the growing business in consultancy. This shift may detract from the independence of the auditing practice.…”

Section: Accounting Professionalizationmentioning

confidence: 99%

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The professionalization of financial planning in Australia: an institutional logics perspective

Richards

Jalathge

Yapa

2021

JPBAFM

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PurposeThis paper researches the professionalization of financial planning in Australia. The authors investigate how the institutional logic of major institutions inhibits this occupation from moving toward a professional status.Design/methodology/approachThe study uses documentary analysis of government inquiries into Australian financial services from 1997 to 2017 to ascertain the various institutional logics relating to the professionalization of financial planning. The method involves generating ideas from the data and applying an institutional logic framework to make sense of impediments to the professionalization of financial planning in Australia.FindingsThe regulator adopted a self-regulation logic that empowered financial institutions to govern financial advice. These financial institutions have a logic of profit maximization that creates conflicts of interest in financial planning. The financial planning professional bodies adopted a logic of attracting and retaining members due to a competitive professional environment. Thus, financial planners have not been defined as fiduciaries, professional standards have not increased and an ineffective disciplinary resolution system exists.Research limitations/implicationsThis research illustrates the various institutional logics that need to be addressed to professionalize financial planning in Australia. However, the data used is limited to that drawn from the parliamentary inquiries.Originality/valuePrior research on the emergence of professions such as accounting has shown that financial institutions are sites of professionalization. This research shows that financial institutions impede professionalization in financial planning. Also, where the state granted legitimacy to other professions, this research indicates that the state regulator's logic of self-regulation has not legitimized financial planning.

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“…En la literatura científica existen varios modelos de consultorías tradicionales valoradas incluso como modelos de negocio (Pang et al, 2019;Donelson et al, 2020), pero en la promoción de la mejora de escenarios futuros por competencia (Markus & Thomas, 2020), al parecer se necesita su adaptación a panoramas tecnológicos. El objetivo del estudio fue representar un modelo de consultoría digital para la comunicación social con el sistema empresarial productivo.…”

Section: Introductionunclassified

Modelo de consultoría digital en la comunicación social con el sistema empresarial productivo

Pérez¹,

Pérez²

2021

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El objetivo del estudio fue representar un modelo de consultoría digital en la comunicación social con el sistema empresarial productivo. El modelo de consultoría digital establece tres etapas denominadas: I) prevención, II) corrección y, III) sostenimiento y vigilancia. Existen criterios que identifican las etapas y refieren al análisis de contexto empresarial (I), situación problemática (II), continuidad de la gestión empresarial para la comunicación social del sistema empresarial productivo (III). Se establecen siete fases que comprenden: 1ro) descripción de la documentación legal del sistema empresarial productivo, 2do) descripción de la gestión de procesos y responsabilidades, 3ro) exploración de la gestión de procesos, 4to) modo de ejecución de la gestión de procesos, 5to) análisis de la gestión de procesos, 6to) evaluación de la gestión de procesos y 7mo) control de la gestión de procesos y cadena de valor. Se consideró tres condiciones de desempeño laboral: A) prestación en plataforma digital del servicio de atención al cliente, B) confianza al consultor según sus competencias profesionales y C) bondades interactivas del servicio digital implementado donde la revisión sincrónica del proceso de consultoría determina la optimización temporal y marca su diferencia con relación a la consultoría tradicional. Se concluye que, la representación del modelo de consultoría digital en la comunicación social con el sistema empresarial productivo presta bondades ante la solicitud del servicio.

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The revival of large consulting practices at the Big 4 and audit quality

Cited by 51 publications

References 63 publications

The perceived impact of the KAM reforms on audit reports, audit quality and auditor work practices: stakeholders’ perspectives

The perceived impact of the KAM reforms on audit reports, audit quality and auditor work practices: stakeholders’ perspectives

The professionalization of financial planning in Australia: an institutional logics perspective

Modelo de consultoría digital en la comunicación social con el sistema empresarial productivo

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