The Relationship Between Human Capital and Operating Performance of Audit Firms in Taiwan: Moderating Role of Business Strategies

• Main Authors: Pi-Yueh, Cheng, 鄭碧月
• Other Authors: Yahn-Shir Chen
• Format: Others
• Language: zh-TW
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/9cy4a8

博士 === 國立雲林科技大學 === 會計系 === 103 === After Enron, the U.S. audit market has become increasingly competitive in order to ensure the quality of listed companies' financial statements. Recently, Taiwanese auditing industry is also facing dramatic changes and becoming very competitive. Previous researches indicate that human capital affects the performance of an organization. Moreover, business strategies adopted by the organization also play an important role in performance. In the landscape of economy around audit market, there are four objectives in this study. First one is to test the relationship between firm's human capital (such as education, work experience, professional training and licenses) and operating performance in Taiwan auditing industry. Second, this study compares different types of audit firms regarding the relationship between their human capital and operating performance. Finally, this study examines the moderating effects of business strategies on the relation between human capital and operating performance among different types of audit firms. In this study, Empirical data are from 1992 to 2012 Survey Report of Audit Firms in Taiwan, published by the Financial Supervisory Commission, Executive Yuan. All monetary variables are adjusted by the Consumer Price Indices to account for inflation. The final sample consists of 14,007 firm-year observations after excluding observations (1) newly established in the survey year, (2) with dependent variables having value more or less than three standard deviations away from their means, and (3) with no revenues or no expenditures. Audit firms are classified into three types, including national, regional and local. Further, in terms of business strategies adopted by audit firms, total samples are categorized into three subsamples: analysts, defenders and prospectors. Empirical results are as follows. First, both licenses and professional training have significantly positive impacts on the operating performance of audit firms, while educational level and work experience show partial or no significant impact on operating performance. Further, business strategies moderate the relationship between human capital and operating performance only for local accounting firms. With the findings obtained, this study suggests that audit firms should clearly position their audit markets and then fully utilize their human capital available to implement appropriate business strategies to enhance operating performance.