International Rotations in Globally Networked Firms: Implications for Audit Quality

• In Event: Qualitative Studies on Audit Firm Issues

Abstract

We interview twenty-four experienced U.S. and non-U.S. secondees (i.e., auditors on an “international rotation” from one member firm to another member firm in a specified role for a fixed period of time), and one national quality partner with the objective of understanding secondments in the public accounting setting and how secondments are perceived to affect audit quality. Respondents perceive secondments are an important and effective, albeit costly, mechanism to improve audit quality at the engagement team, office, and firm level. Specifically, sending personnel abroad is a mechanism to: (1) satisfy supervision and review standards; (2) reduce the physical distance created by geography; (3) transfer knowledge to international teams; (4) develop a “global mindset”; and (5) foster relationships across member firms. While at the onset secondments appear to be a mechanism for driving consistency in quality and control across the global firm network, strikingly, both U.S. and non-U.S. secondees suggest that secondments primarily benefit U.S. issuers and are largely a U.S. driven proposition of quality control.

Authors

• Kim D Westermann, Cal Poly, San Luis Obispo

• Denise Hanes Downey, Villanova University