Nancy Chun Feng

Fiscal year-end and non-lateral auditor switches

Purpose - – The purpose of this paper is to examine the potential effect of busy season resource constraints on the selection of a new auditor, conditioned upon the status of the prior auditor. Design/methodology/approach - – The paper employs multivariate logistic regressions for a sample of firms that changed auditors between 1979 and 2005 to explore the empirical correlations between having a December fiscal year-end (FYE) and non-lateral switches. Findings - – The paper finds that non-BigN clients with December FYEs are less likely to switch to BigN auditors than those with non-December FYEs prior to the enactment of the Sarbanes-Oxley Act (SOX). This trend subsides after SOX. For firms with BigN predecessor auditors, fiscal year-end appears to have insignificant influence on auditor switching. Research limitations/implications - – The findings suggest that upwardly mobile clients face greater audit supply constraints compared to clients already being audited by a BigN firm during the traditional busy season. However, the curbing influence on switching upwards erodes after SOX. Practical implications - – This study is to show the impact of supplier capacity constraints on audit production and structural changes within the auditing profession. Originality/value - – The findings can further the understanding of the determinants of auditor-client realignment, given that the paper identifies and explores the effects of having a December FYE on subsequent auditor appointments, conditioned upon the status of the prior auditor.

Accountability Standards for Nonprofit Organizations: Do Organizations Benefit from Certification Programs?

ABSTRACT Stakeholders are demanding nonprofit organizations (NPOs) continually improve and work effectively in an ever-changing environment. While there are many ways to approach this operational challenge, this paper examines the impact of acquiring an accountability certification, specifically the Standards for Excellence® Certification. Using a sample of 102 NPOs that have received the Standards for Excellence certification, we find that the certification is associated with increases in public support relative to a control group that did not receive the certification. These results suggest that some stakeholders favorably respond to the certification process, and NPOs can realize tangible benefits from becoming certified.