An empirical study of returns to scale of CPA firms in the post SOX era

作者：Chang Hsihui^*; Choy Hiu Lam; Hwang Iny

来源：Annals of Operations Research, 2015, 229(1): 253-264.

DOI：10.1007/s10479-015-1826-4

• CPA firms
• SOX
• DEA
• Returns to scale
• M& A
• Organic growth

This paper performs empirical tests for the returns to scale pattern of certified public accountant (CPA) firms in the post Sarbanes-Oxley Act (SOX) era using data envelopment analysis. Analyzing a sample of 70 of the top 100 CPA firms from Accounting Today surveys over the 6 years period 2005-2010, we find that our sample CPA firms as a whole exhibit decreasing returns to scale in the post SOX era, suggesting that these CPA firms had exhausted scale economies by expansions through mergers and acquisitions and organic growth. Thus, these firms may consider stopping their expansion plans and downsizing or divestitures in order to improve their production efficiency.

• 出版日期2015-6