John Christian Langli holds a Ph.D. from The Norwegian School of Economics (NHH) and is Professor of Business Economics at the Department of Accounting and Operations Management at BI The Norwegian School of Business. He also serves as Head of Department of Accounting and Operations Management. His research interests are empirical reserach in financial accounting, auditing and corporate governance.
Recent accounting scandals have triggered renewed interest in the debate concerning whether audit firms should be banned from providing consulting services. Compared to the voluminous studies on consulting services to audit clients (i.e., non-audit services,hereafter NAS), little has been done to investigate consulting services to non-audit clients(hereafter CS). This study examines whether audit partners’ revenues from CS are associated with: i) partners’ compensation, and ii) audit quality (AQ), while controlling for revenues from NAS and auditing. We choose the Norwegian setting because of the unique and proprietary data on CS at the audit partner level. Our results provide initial evidence that partners’ compensation is positively associated with their revenues generated from CS. Regarding AQ, our findings indicate no relation between AQ and partners’ revenues from CS. This study contributes to the recent debate on multidisciplinary audit firms and should be of interest to regulators, audit firms, and users of audited financial statements.
Langli, John Christian (2020)
Empiriske egenskaper ved finansielle nøkkeltall
Stenheim, Tonny & Birkeland, Kari (red.). Finansiell og ikke-finansiell rapportering Festskrift til Hans Robert Schwencke
Analyser av foretaks finansielle stilling og inntjening skjer som regel ved hjelp av finansielle nøkkeltall som tallfester lønnsomhet, likviditet og soliditet. I denne artikkelen viser jeg først hvordan noen nøkkeltall i hver av disse tre kategoriene, beregnet på grunnlag av årsregnskapene til norske aksjeselskaper (dvs. ikke børsnoterte foretak), utvikler seg over tid. Jeg viser at mål på lønnsomhet (total- og egenkapitalrentabiliteten) og soliditet (målt ved leverage, som er forholdet mellom sum eiendeler og sum egenkapital) går mot gjennomsnittsverdiene for økonomien som helhet. Det er som forventet siden det finnes teorier for avkastningskrav og optimal kapitalstruktur, og konkurransen vil drive forholdstallene mot de teoretiske verdiene. Forholdstall som mangler et teoretisk fundament for hvor optimum er (som likviditetsgrad 1 og totalkapitalens omløpshastighet), viser ikke samme tendens til å gå mot gjennomsnittet. Bransjeforskjeller er det andre hovedtemaet i artikkelen. Det er mange eksempler på at normtall for hva som skal til for at lønnsomheten eller likviditeten er tilfredsstillende eller god, blir fastsatt uten å ta hensyn til bransjeforskjeller. Det best kjente kravet er at likviditetsgrad 1 bør være større enn 2, et krav som ble fastsatt for over 100 år siden. Jeg dokumenterer store bransjeforskjeller i gjennomsnittsverdier og medianverdier for nøkkeltallene, og viser at generelle krav til hva normtall bør være, kan være lite relevante.
Che, Limei; Hope, Ole-Kristian & Langli, John Christian (2020)
This paper studies whether and how Big-4 firms provide higher-quality audits than non-Big-4 firms. Specifically, we first examine a Big-4 effect and then explore three sources of the Big-4 effect. To test the Big-4 effect, we use a unique data set of individual audit partners for a large sample of private companies and a novel research design exploiting the fact that auditees may follow the auditor who switches affiliation from a non-Big-4 firm to a Big-4 firm. Thus, we compare audit quality and audit fees of the same partner–auditee pairs before and after the switch. The results show that the Big-4 effect exists in the private-firm segment. More important, we find evidence for three sources of the Big-4 effect. First, Big-4 firms are able to recruit non-Big-4 partners who deliver higher audit quality than other non-Big-4 partners in the preswitch period. Second, enhanced learning has taken place after the switch. Third, the increased audit quality can also be attributed to stronger incentives/monitoring. These are new findings to the literature.
Downing, Jeff & Langli, John Christian (2019)
Audit exemptions and compliance with tax and accounting regulations
We examine small firms’ compliance with tax and accounting regulations before and after a change in the threshold for mandatory auditing. Prior to 2011, all Norwegian firms were required to be audited. In 2011, a law change allowed small Norwegian firms to choose not to be audited. After this change, the Norwegian Directorate of Taxes conducted on- and off-site inspections of a representative sample of 2117 Norwegian firms, with a focus on compliance with specific requirements in tax and accounting regulation. We use the results from these inspections to construct a compliance quality score (CQS). We find that the firms that chose to opt out of auditing have lower CQS than do firms that chose to continue to be audited; that the CQS of firms that chose not to be audited declined after opting out; and that some of the opt-out firms fully mitigated the decline in CQS by engaging external accountants or auditors to prepare their annual financial statements. The results should be of interest to regulators considering increasing the thresholds for mandatory auditing, as our results show that (i) firms that choose not to be audited can experience a decline in CQS after opting out and (ii) CQS can be maintained at the same level as before if opt-out firms engage external consultants that assist in preparing the annual accounts.
Langli, John Christian & Willekens, Marleen (2018)
The Economics of Auditor Regulation
Sasson, Amir (red.). At the Forefront, Looking Ahead: Research-Based Answers to Contemporary Uncertainties of Management
Che, Limei; Langli, John Christian & Svanstrøm, Tobias (2018)
Education, Experience, and Audit Effort
Auditing: A journal of Practice and Theory (AJPT), 37(3), s. 91- 115. Doi: 10.2308/ajpt-51896
This paper examines how audit effort, measured by the estimated number of audit hours used to perform the clients' audits, is associated with engagement partners' formal education, continuing professional education (CPE), and professional experience. Although the literature provides considerable evidence for the determinants of audit fees, our understanding of how audit effort is related to these partner characteristics is limited. The aim of this paper is to shed light on partner specific factors that may influence how much audit effort they and their team members exert. Using a sample of 1,738 unique partners and 178,770 client-year observations, we find evidence that auditors with a master's degree exert more effort than those with a bachelor's degree. We also find a positive relation between audit effort and CPE. The relation between audit effort and professional experience is non-linear: the least experienced auditors put in the least effort, moderately experienced auditors exert the most effort, while the effort level of the most experienced auditors is in between. We also document that the accuracy of going concern modified audit reports is higher for more knowledgeable auditors.
Langli, John Christian (2017)
The great tragedy of science - the slaying of a beautiful hypothesis by an ugly fact: The efficient market hypothesis and stock return predictability.
Bjørndal, Mette Helene; Gjesdal, Frøystein & Mjøs, Aksel (red.). Finance in Society: An Anthology in Honour of Thore Johnsen
Langli, John Christian (2016)
Resultatføring av inntekter og kostnader før og etter fravalg av revisor i små AS : tyder utviklingen på økte skatteunndragelser?
En rekke aksjeselskaper (ASer) valgte bort revisor i 2011. Dersom fravalget av revisor påvirket bankenes eller kreditorenes risikovurdering, er det rimelig å forvente at selskapene som valgte bort revisor vil få høyere lånerente eller dårligere tilgang til kreditt etter fravalget. Vi undersøker utviklingen fra 2010 til 2012 for ASer som kvalifiserte for fravalg i 2011. Resultatene er entydige. Vi finner ingen tegn til negative finansieringseffekter for de som valgte bort revisor i 2011 sammenliknet med de som beholdt revisor.
Che, Limei & Langli, John Christian (2015)
Governance Structure and Firm Performance in Private Family Firms
Journal of Business Finance & Accounting, 42(9), s. 1216- 1250. Doi: 10.1111/jbfa.12170
Langli, John Christian & Svanstrøm, Tobias (2014)
Audits of private companies
Knechel, W. Robert; Willekens, Marleen & Hay, D. W. (red.). The Routledge Companion to Auditing
Hope, Ole-Kristian; Langli, John Christian & Thomas, Wayne B. (2012)
Family involvement and firm performance in private family firms
[Academic lecture]. Annual meeting of the European Accounting Association.
Che, Limei & Langli, John Christian (2013)
Agency conflicts and firm performance in private family firms
[Academic lecture]. 22nd Nordic Academy of Management Conference.
Langli, John Christian (2012)
Patterns of Executive Compensation in Private Family Firms
[Academic lecture]. European Accounting Association.
Langli, John Christian (2012)
Gender Quotas for Boards. On the impact of requirements for equal opportunity for boards of public limited companies
[Academic lecture]. Company Law and Empirical Studies Workshop.
Langli, John Christian; Kvaal, Erlend & Mohammad, Abdolmohammadi (2011)
Earnings Management Prioritites in Private Familiy Firms
[Academic lecture]. European Accounting Associations Annual Congress.
Langli, John Christian; Kvaal, Erlend & Mohammad, Abdolmohammadi (2011)
Earnings Management Priorities of Private Family Firms
[Academic lecture]. FIBE-konferansen.
Hope, Ole-Kristian; Langli, John Christian & Thomas, Wayne B. (2011)
Agency Conflicts and Auditing in Private Firms
[Academic lecture]. EARNet 2011.
Langli, John Christian; Hope, Ole-Kristian & Thomas, Wayne B. (2010)
Agency Conflicts and Auditing in Private Firms
[Report]. Handelshøyskolen BI.
Abdolmohammadi, Mohammad; Kvaal, Erlend & Langli, John Christian (2010)
Earnings Management Priorities of Private Family Firms
[Report]. Handelshøyskolen BI.
Langli, John Christian (2010)
Agency Conflicts and Auditing in Private Firms
[Academic lecture]. European Accounting Associations Annual Congress.
Langli, John Christian (2010)
Agency Conflicts and Auditing in Private Firms
[Academic lecture]. Workshop on Audit Quality.
Langli, John Christian (2010)
Earnings Management Priorities of Private Firms
[Academic lecture]. Nordic Conference on Financial Reporting.
Hope, Ole-Kristian & Langli, John Christian (2009)
Er høye honorarer for revisjon og rådgivning en trussel mot uavhengigheten?
[Article in business/trade/industry journal]. Praktisk økonomi & finans, 25(4), s. 55- 63.
Langli, John Christian (2008)
Auditor Independence in a private firm and low litigation risk setting
[Academic lecture]. American Accounting Association's annual meeting.
Langli, John Christian (2008)
Auditor Independence in a private firm and low litigation risk setting
[Academic lecture]. The 31st Annual Congress of the European Accounting Association.
Langli, John Christian (2005)
Regnskapskvalitet - om hvordan regnskapsmessig støy svekker kvaliteten på regnskapsinformasjon
[Article in business/trade/industry journal]. Praktisk økonomi & finans, s. 49- 62.
Tellefsen, Jan Terje & Langli, John Christian (2004)
Årsregnskapet
[Textbook]. Gyldendal Akademisk.
Høyvarde, Hans Kristian & Langli, John Christian (2001)
Studiehefte til årsregnskapet
[Textbook]. Gyldendal.
Høyvarde, Hans Kristian & Langli, John Christian (2001)
Studiehefte til årsregnskapet
[Textbook]. Gyldendal.
Tellefsen, Jan Terje & Langli, John Christian (2001)
Årsregnskapet
[Textbook]. Gyldendal Akademisk.
Langli, John Christian (1999)
Flytting av overskudd mellom land i flernasjonale selskaper: Hvilken rolle spiller selskapenes internprising?
[Article in business/trade/industry journal]. ?
Langli, Jon Christian (1999)
Flytting av overskudd mellom land i flernasjonale selskaper: Hvilken rolle spiller selskapenes internprising?
[Article in business/trade/industry journal]. ?
Langli, John Christian & Ramnefjell, Per Espen (1998)
Konkurs! Oppfatninger om konkurskriminalitet og konkursinstituttets virkemåte blant aktører involvert i avdekking og etterforskning av staffbare forhold
