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An International Meeting of American Accounting
Association
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Marginal revenue product, economies of scale and organizational type in Taiwan’s public accounting firms. |
Yahn - Shir Chen
National Yunlin University of Science and Techonology
Chao - Ling Lin
Chang Jung Christian University and National Yunlin University of Science and Technology
Abstract: In this study, marginal revenue product (MRP) and scale economies of accounting firms in Taiwan are investigated under different organization type, partnership and sole proprietorship. A balanced panel of 763 observations consisting of 109 accounting firms is taken from the 1996-2002 Census Report of Public Accounting Firms in Taiwan.
Empirical results indicate that the contribution of certified public accountant to the revenue of accounting firm is higher than that of the professionals in terms of the MRP. The MRP of a CPA in a partnership accounting firm is lower than that of a CPA in a sole proprietorship accounting firm.
After comparing the ratio of MRP and the ratio of compensation level, this study finds that, for the overall sample and for the sole proprietorship accounting firms, CPA is under-compensate. However, in the partnership accounting firm, CPA is over-compensate. Finally, economies of scale prevail in all of the public accounting firms.