An Analysis of the Correlation between Employee Compensation Policies and Operating Performance of Accounting Firms

Lee Chia-Chi(Department of Accounting Information, National Taipei University of Business, Taipei City 10051, Republic of China (Taiwan))

Abstract

This paper aims to explore the impact of compensation for employees of different ranks on the overall operating performance of accounting firms (hereinafter referred to as firms) and operating performance of the business markets, and provide reference for decision making by firm managers on employee compensation. The results show that 1) judging by overall operating performance, a firm’s income from professional practice increases as the average annual salary of partner accountants, manager-level heads, professional team heads and professional assistants increases, or the proportion of employees with the CPA qualification rises; the number of cases entrusted to a firm increases as the average annual salary of partner accountants and professional assistants increases, or the proportion of employees with the CPA qualification rises; 2) judging by the operating performance of business markets, the income from tax service, management consulting, business registration and other business lines increases as the average annual salary of partner accountants and professional team heads rises; the income from public issue of certification documents, tax service and business registration and other business lines increases as the average annual salary of professional assistants rises; a higher proportion of employees with the CPA qualification has a positive impact on the income from management consulting; 3) the shorter the firm age, and the greater the firm size, the better the firm’s overall operating performance.

Keywords

Employee rank; Certified Public Accountant (CPA) qualification; operating performance; business market; accounting firm

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DOI: http://dx.doi.org/10.26549/mmpp.v6i2.16841