This paper investigates productivity growth, technical progress, and efficiency change for a group of the 56 largest CPA firms in the US from the period 1996-1999 through the period 2003-2006, where the former preceded, and the latter followed, enactment of the Sarbanes-Oxley Act (SOX). Data envelopment analysis (DEA) is used to calculate Malmquist indices of three measures of interest: productivity growth, technical progress, and efficiency change. Results indicate that CPA firms, on average, experienced a productivity growth of approx. 17% from the pre- to post-SOX period. Consistent with the finding of Banker et al. [Banker RD, Chang H, Natarajan R. Productivity change, technical progress and relative efficiency change in the public accounting industry. Management Science 2005;51:291-304], this productivity gain can be attributed primarily to technical progress rather than a change in relative efficiency. In addition, results indicate that the "Big 4" firms underperformed their non-Big 4 counterparts in both productivity growth and technical progress.
Chang, H., Choy, H. L., Cooper, W. W., Parker, B. R., & Ruefli, T. W. (2009). Measuring productivity growth, technical progress, and efficiency changes of CPA firms prior to, and following the Sarbanes-Oxley Act. Socio-Economic Planning Sciences, 43(4), 221–228. https://doi.org/10.1016/j.seps.2008.11.002