Potential adverse effects of specialization within accountin

Recent research focused on the relative ability of 116 audit specialists and 35 generalists to identify 24 potential tax issues and 14 audit issues embedded in a set of auditing working papers. The specialists were drawn from many offices of a firm with separate audit and tax departments, while the generalists worked for firms without such separate departments. Discriminant analysis was used to distinguish between the 2 groups, as well as to identify which variables are important. As expected, generalists identified significantly more tax issues than did the audit specialists. Surprisingly, however, the generalists also performed significantly better on audit issues. The findings suggest that specialist firms may not be receiving the maximum benefit from the specialist organizational structure. Experience, as measured by years spent in public accounting, was not a significant variable in the discriminant analysis.