The Use of Shared Service Centers in the Audit Industry and the Impact on Financial Analysts’ Perception

Description

Audit firms are increasingly using Shared Service Centers (SSCs). However, this process is not obvious for users. Regarding the effect on audit quality, there are arguments both for improvement and for deterioration due to the use of SSCs. We provide experimental evidence regarding the effects of SSCs on audit quality as perceived by financial analysts. Based on data from 205 financial analysts, we investigate whether the use of SSCs impacts perceived audit quality and whether the location of the center and the task complexity play a role. We find that SSC involvement negatively impacts audit quality perceptions. The internal outsourcing of complex tasks reinforces this effect. Our results have direct implications for audit practice and regulators, as they demonstrate the need to include information on the use of SSC in the auditor report. Moreover, we find that trust in auditing and a positive attitude towards SSCs is a mitigating force.

Period	23 Jun 2022 → 24 Jun 2022
Event title	The Ninth International Conference of the Journal of International Accounting Research
Event type	Unknown
Degree of Recognition	International