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Partner-scale economies, service bundling and auditor independence in the Australian self-managed superannuation (pension) fund industry

Arnold, Bruce, Bateman, Hazel, Ferguson, Andrew and Raftery, Adrian 2016, Partner-scale economies, service bundling and auditor independence in the Australian self-managed superannuation (pension) fund industry, AUDITING: a journal of practice & theory, In Press, pp. 1-1, doi: 10.2308/ajpt-51573.


Title Partner-scale economies, service bundling and auditor independence in the Australian self-managed superannuation (pension) fund industry
Author(s) Arnold, Bruce
Bateman, Hazel
Ferguson, Andrew
Raftery, Adrian
Journal name AUDITING: a journal of practice & theory
Season In Press
Start page 1
End page 1
Total pages 1
Publisher American Accounting Association
Place of publication Sarasota, Florida
Publication date 2016
ISSN 0001-4826
Keyword(s) auditor independence
service bundling
nonaudit services
partner specialization
pension funds
Summary Using proprietary Australian Taxation Office (ATO) data, this study examines audit pricing, service bundling and independence issues in the self-managed superannuation fund (SMSF) sector, the fastest growing and largest segment of the Australian $2 trillion retirement savings industry. We consider the impact of partner-level scale effects for a large sample of SMSF audits for the three years to June 2010. After controlling for factors known to determine audit fees, we find evidence of fee discounting by partners with large client portfolios. However, when the dependent variable is redefined to the total 'bundle' of services (including audit and non-audit fees), the firms of partners with larger client portfolios are shown to earn bundling fee premiums. This finding suggests industry specialists price strategically using audits as a conduit to supply higher margin non-audit services (NAS) to clients with more resources. Last, we find no evidence the supply of NAS impairs auditor independence, alleviating joint supply concerns raised in the Cooper Review.
Language eng
DOI 10.2308/ajpt-51573
Field of Research 150102 Auditing and Accountability
150199 Accounting, Auditing and Accountability not elsewhere classified
Socio Economic Objective 900103 Superannuation and Insurance Services
HERDC Research category C1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©American Accounting Association
Persistent URL http://hdl.handle.net/10536/DRO/DU:30089608

Document type: Journal Article
Collections: Faculty of Business and Law
Department of Accounting
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