Cost-quality conflict in audit firms: an empirical investigation

B. Pierce and B. Sweeney

European Accounting Review, 2004, vol. 13, issue 3, 415-441

Abstract: Findings are reported from an empirical investigation of cost-quality conflict using a survey of audit juniors and seniors in four of the Big Five audit firms in Ireland. Prior findings, mainly from US studies, indicate the presence of a cost-quality conflict in the audit environment. Conventional accounting controls are only partially effective and, in response to such controls, auditors sometimes engage in dysfunctional behaviours. Evidence from this study suggests that dysfunctional behaviours are significantly related to time pressure (created through a combination of budgets and deadlines) and performance evaluation (incorporating both style and frequency of evaluation). The relationship between dysfunctional behaviours and other specified variables (participation and leadership style) was not statistically significant. There was evidence that major changes have taken place in the audit environment such as a flattening of organizational structures and a de-emphasis on budgets as a form of control. The findings are interpreted in the context of the changed audit environment. Implications for resolving the cost-quality conflict from the perspective of audit firm management are set out and future research opportunities are identified.

Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/0963818042000216794 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:euract:v:13:y:2004:i:3:p:415-441

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REAR20

DOI: 10.1080/0963818042000216794

Access Statistics for this article

European Accounting Review is currently edited by Laurence van Lent

More articles in European Accounting Review from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().