National Sun Yat-sen University
V. CONCLUSIONS AND SUGGESTIONS Conclusions
The study found that, in general, the structure of the accounting firms in Taiwan is rather high. Among the six variables of audit structure, five variables have an average score higher than 4 (out of 5 possible points). For fairness perception, auditors of the accounting firms have a low average score on distributive fairness (1.94/7) and a high average score on procedural fairness (5.41/7). Possible reasons for this result may include:
auditors are very busy and their salaries are not particularly high (this is especially true for new entrants), and most of the subjects in the study are relatively new in the job. As for the high score on procedural fairness, this may be due to the fact that auditing is a kind of team work. So, superiors may encourage their subordinates to participate more fully in the audit process, including the decision making process. Yet, the remarkable result here is that auditors have the ability to separate perceptibly and meaningfully distributive fairness and procedural fairness.
Based on the pair-wise correlations, the study found that the six variables of audit structure have a negative and significant correlation with information search breadth, and only procedural fairness has a positive significant correlation with information search depth. This means that audit structure is more related to information search breadth, and fairness perception is more related to information search depth. This study also found that audit structure has a significant correlation with procedural fairness, but not with distributive fairness.
The multiple regression models indicate that audit structure has a negative effect on auditors’ information search behavior when performing an audit assignment. The higher the audit structure is, the lower the information search breadth and depth is. However, if we break down audit structure into six variables, the study found that they had different effects on auditors’ information search behavior. As for fairness perception, the study found only procedural fairness has a significant effect on auditors’ information search.
This matches with the above correlation result that only procedural fairness correlates significantly with auditors’ information search depth.
The study further conducted a one-way ANOVA to examine the effects of differing audit structures (high and low) on auditors’ information search breadth and depth.
Differences of audit structure were found to have significant impacts on information search breadth and depth. Thus, these results may be used to validate the above multiple regression results.
Suggestions
The study used practicing auditors of accounting firms as subjects, so the results can increase our understanding of auditors’ information search behavior. This study represents the first attempt to combine audit structure theory and equity theory and apply them to professional accounting firms. Consequently, the empirical results are meaningful and can be the major contribution of the study. Because the study found the audit structure of the accounting firms was very high, but had a negative effect on auditors’ information search behavior which highly affects the quality of audit decisions, the study suggests that managing partners of the accounting firms should take note of this finding. They may
want to either lower the audit structure of their firms or increase their auditors’ fairness perception in order to avoid the possible negative effects. Another noteworthy finding is the rather low average score of distributive fairness. Based on the literature on equity theory, low distributive fairness perception would lead to negative employee behavior. In addition to giving more attention to this finding, the study suggests future researchers may want to find out whether it is only a special case of Taiwan’s recent economic environment, or a more generally representative case. Future research may also want to investigate how audit structure interacts with the auditors’ fairness perception to affect auditors’ behavior when performing an audit assignment -- because this may have an impact on audit quality.
(Submitted September 2000; accepted October 2003)
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