Higher Academic Qualifications, Professional Training and Operating Performance of Audit Firms

Yahn-Shir Chen, Chung-Cheng Yang and Yi-Fang Yang
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Yahn-Shir Chen: Department of Accounting, National Yunlin University of Science and Technology, Yunlin 64002, Taiwan
Chung-Cheng Yang: Department of Accounting, National Yunlin University of Science and Technology, Yunlin 64002, Taiwan
Yi-Fang Yang: Department of Accounting and Information Systems, Chang Jung Christian University, Tainan 71101, Taiwan

Sustainability, 2020, vol. 12, issue 3, 1-16

Abstract: This study examines the association between professional training, higher academic qualifications (educational levels) and operating performance of audit firms in Taiwan. We particularly focus on the curvilinear effects of higher academic qualifications on operating performance. We group the total sample into three categories: national, regional and local audit firms. Based on the theoretical framework in industrial economics, we establish a cross-sectional multiple regression equation to test our hypotheses. Both higher academic qualifications and professional training are positively related to the operating performance of audit firms. Professional training moderates the relation between higher academic qualifications and operating performance. Higher academic qualifications exhibit a curvilinear effect on operating performance with a reverse U-shaped relation for the national audit firms and a U-shaped relation for both regional and local audit firms. Due to data unavailability, some factors affecting the audit quality and operating performance are not included in our analysis, such as auditor teamwork, internal control system, operating policies and auditing procedures of audit firms. The findings that higher academic qualifications are positively associated with the operating performance of audit firms justify the educational policy of establishing institutes or graduate schools in accounting over the past two decades. Furthermore, audit firms skillfully exploit employees with higher academic qualifications to improve their operating performance. We are the first to document the moderating effects of professional training and the curvilinear association between higher academic qualifications and operating performance, contributing knowledge to related literature.

Keywords: curvilinear effects; higher academic qualifications; professional training; audit firms (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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