The Balanced Scorecard: Measures That Drive Performance Evaluation in Auditing Firms

Author's Department

Management Department

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https://doi.org/10.1177/0148558X20962915

Document Type

Research Article

Publication Title

Journal of Accounting, Auditing and Finance

Publication Date

1-1-2020

doi

10.1177/0148558X20962915

Abstract

© The Author(s) 2020. The purpose of this article is to establish a framework with its related measures for the development of a balanced scorecard (BSC) for auditing firms. A BSC was developed providing the detailed measures for performance evaluation comprising five key elements: learning and growth, clients, internal business processes, financials, and audit-related perspectives of corporate ethics. A survey was undertaken along with descriptive statistics and confirmatory factor analysis in four auditing firms, to assess the external auditors’ opinions for the proposed BSC measures. The results suggest that the development and use of the proposed BSC measures will enhance audit firms’ performance. Audit firms would have a better understanding of the various drivers of performance and strategies thereby creating a competitive advantage. The results are valuable to not only audit firms but also auditing oversight boards who could direct the design of their monitoring process by understanding performance systems in different size audit firms.

First Page

902

Last Page

927

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