Auditor's engagement risk and audit fees:the role of the audit firm alumni

This study explores the effect of the association of audit firm alumni with their alma mater on audit prices. The tests indicate that there is a moderate reduction of up to 21% in the level of audit fee when alumni (i.e., former employees) of the incumbent audit firm sit on the client board of directors which is consistent with the engagement risk theory. This suggests that there is an 'alumni effect' in the market for audit services. The findings hold only in the large company segment of the market. The results are robust to different model specifications and alternative samples. The sample comprises all executive and non-executive directors who run the UK quoted companies and are simultaneously ICAEW qualified chartered accountants. The study's implications for the accounting profession and the regulators are also discussed. © 2007 The Author Journal compilation © 2007 Blackwell Publishing Ltd.

"We don't need no education" - Or do we? Management education and alumni adoption of strategy tools

Despite concerns about the relevance of management education, there is relatively little evidence about whether graduates use the management tools and concepts they are taught. We address this gap with evidence from a survey of business school alumni adoption of tools typically taught in strategic management courses. Our findings show that four educational characteristics-level of formal education, frequency of management training, specificity of strategic management education, and time elapsed since formal education-drive adoption of strategy tools. Specifically, features such as postgraduate over undergraduate qualifications and frequent exposure to management training predispose greater user of strategy tools. However, other factors, such as time elapsed since formal education, are not as great a predictor of variation in use. We conclude with a predictive model of the relative weight and importance of educational and demographic characteristics on strategy tool adoption and discuss our findings in light of the relevance debate. © The Author(s) 2013.