A Modified Audit Production Framework: Evaluating the Relative Efficiency of Audit Engagements

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dc.contributor.author Knechel, Warren en
dc.contributor.author Rouse, P en
dc.contributor.author Schelleman, C en
dc.date.accessioned 2012-05-25T01:08:55Z en
dc.date.issued 2009-09 en
dc.identifier.citation Accounting Review 84(5):1607-1638 Sep 2009 en
dc.identifier.issn 0001-4826 en
dc.identifier.uri http://hdl.handle.net/2292/18433 en
dc.description.abstract We develop a model of audit production based on Data Envelopment Analysis (DEA) using labor cost as input and hours spent on evidence-gathering activities that determine the level of assurance as output. Client characteristics are considered exogenous factors that affect audit production as a whole. We apply the model to a sample of U.S.-based engagements from an international accounting firm. Results indicate that a constrained DEA model using variable returns to scale is appropriate for modeling audit production. We find that audits are more efficient for clients that are larger, have a December year-end, and are highly automated. Audits are less efficient when the auditor relies on internal control, tax services are provided, and the client has subsidiaries. We also find that a well-specified regression-based production model can control for factors that influence auditor efficiency. Finally, we find that inefficiencies are impounded in fees for some industries and firm offices en
dc.publisher American Accounting Association en
dc.relation.ispartofseries Accounting Review en
dc.rights Items in ResearchSpace are protected by copyright, with all rights reserved, unless otherwise indicated. Previously published items are made available in accordance with the copyright policy of the publisher. en
dc.rights.uri https://researchspace.auckland.ac.nz/docs/uoa-docs/rights.htm en
dc.title A Modified Audit Production Framework: Evaluating the Relative Efficiency of Audit Engagements en
dc.type Journal Article en
dc.identifier.doi 10.2308/accr.2009.84.5.1607 en
pubs.issue 5 en
pubs.begin-page 1607 en
pubs.volume 84 en
dc.rights.holder Copyright: American Accounting Association en
pubs.end-page 1638 en
dc.rights.accessrights http://purl.org/eprint/accessRights/RestrictedAccess en
pubs.subtype Article en
pubs.elements-id 331767 en
pubs.org-id Business and Economics en
pubs.org-id Accounting and Finance en
pubs.record-created-at-source-date 2012-03-23 en


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