Measuring productivity growth, technical progress, and efficiency changes of CPA firms prior to, and following the Sarbanes-Oxley Act
AbstractThis paper investigates productivity growth, technical progress, and efficiency change for a group of the 56 largest CPA firms in the US from the period 1996-1999 through the period 2003-2006, where the former preceded, and the latter followed, enactment of the Sarbanes-Oxley Act (SOX). Data envelopment analysis (DEA) is used to calculate Malmquist indices of three measures of interest: productivity growth, technical progress, and efficiency change. Results indicate that CPA firms, on average, experienced a productivity growth of approx. 17% from the pre- to post-SOX period. Consistent with the finding of Banker etÂ al. [Banker RD, Chang H, Natarajan R. Productivity change, technical progress and relative efficiency change in the public accounting industry. Management Science 2005;51:291-304], this productivity gain can be attributed primarily to technical progress rather than a change in relative efficiency. In addition, results indicate that the "Big 4" firms underperformed their non-Big 4 counterparts in both productivity growth and technical progress.
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Bibliographic InfoArticle provided by Elsevier in its journal Socio-Economic Planning Sciences.
Volume (Year): 43 (2009)
Issue (Month): 4 (December)
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Web page: http://www.elsevier.com/locate/seps
CPA firms Productivity growth Technical progress Efficiency change SOX DEA Malmquist index Big 4 firms;
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- Rajiv D. Banker & Hsihui Chang & Ram Natarajan, 2005. "Productivity Change, Technical Progress, and Relative Efficiency Change in the Public Accounting Industry," Management Science, INFORMS, vol. 51(2), pages 291-304, February.
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