ABSTRACT
Audit firms are increasingly using shared service centers (SSCs). There are arguments suggesting an improvement or a deterioration in audit quality due to their use. We provide experimental evidence regarding the effects of SSCs on audit quality, as perceived by financial analysts. Based on survey responses from 205 financial analysts, we investigate whether using SSCs effects perceived audit quality and whether the SSC’s location and task complexity matter. We find that SSC involvement negatively impacts perceived audit quality, and the additional outsourcing of complex tasks exacerbates this effect. We demonstrate that the SSC’s location does not have a significant effect on perceived audit quality. Finally, when outsourcing additional high-complexity tasks, the interaction between location and task complexity leads to a significant negative impact on perceived audit quality.
