Measuring productivity growth, technical progress, and efficiency changes of CPA firms prior to, and following the Sarbanes-Oxley Act

Hsihui Chang, Hiu Lam Choy, William W. Cooper, Barnett Parker and Timothy W. Ruefli

Socio-Economic Planning Sciences, 2009, vol. 43, issue 4, 221-228

Abstract: This paper investigates productivity growth, technical progress, and efficiency change for a group of the 56 largest CPA firms in the US from the period 1996-1999 through the period 2003-2006, where the former preceded, and the latter followed, enactment of the Sarbanes-Oxley Act (SOX). Data envelopment analysis (DEA) is used to calculate Malmquist indices of three measures of interest: productivity growth, technical progress, and efficiency change. Results indicate that CPA firms, on average, experienced a productivity growth of approx. 17% from the pre- to post-SOX period. Consistent with the finding of Banker et al. [Banker RD, Chang H, Natarajan R. Productivity change, technical progress and relative efficiency change in the public accounting industry. Management Science 2005;51:291-304], this productivity gain can be attributed primarily to technical progress rather than a change in relative efficiency. In addition, results indicate that the "Big 4" firms underperformed their non-Big 4 counterparts in both productivity growth and technical progress.

Keywords: CPA; firms; Productivity; growth; Technical; progress; Efficiency; change; SOX; DEA; Malmquist; index; Big; 4; firms (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceps:v:43:y:2009:i:4:p:221-228

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