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Full-Text Articles in Business Law, Public Responsibility, and Ethics

Preventing Fraudulent Financial Reporting, Mark S. Beasley, Joseph V. Carcello, Dana R. Hermanson Dec 2000

Preventing Fraudulent Financial Reporting, Mark S. Beasley, Joseph V. Carcello, Dana R. Hermanson

Faculty Publications

Provides information on a study conducted by the Committee of Sponsoring Organizations regarding the detection and prevention of financial fraud. Discussion on the nature of financial frauds; Characteristics of unreliable financial reporting; Views on the role of auditing firms in the prevention of fraud.


Preventing Fraudulent Financial Reporting, Mark Beasley, Joseph Carcello, Dana Hermanson Nov 2000

Preventing Fraudulent Financial Reporting, Mark Beasley, Joseph Carcello, Dana Hermanson

Joseph V. Carcello

Detecting financial fraud and communicating it to management can be difficult for even the best auditors. A recent study by the Committee of Sponsoring Organizations (COSO) highlighted six key areas in a "fraud profile" that auditors can use to reduce exposure to fraudulent financial reporting.


Fraudulent Financial Reporting: Consideration Of Industry Traits And Corporate Governance Mechanisms, Mark Beasley, Joseph Carcello, Dana Hermanson, Paul Lapides Nov 2000

Fraudulent Financial Reporting: Consideration Of Industry Traits And Corporate Governance Mechanisms, Mark Beasley, Joseph Carcello, Dana Hermanson, Paul Lapides

Joseph V. Carcello

This paper provides insight into financial statement fraud instances investigated during the late 1980s through the 1990s within three volatile industries—technology, health care, and financial services—and highlights important corporate governance differences between fraud companies and no-fraud benchmarks on an industry-by-industry basis. The fraud techniques used vary substantially across industries, with revenue frauds most common in technology companies and asset frauds and misappropriations most common in financial-services firms.For each of these three industries, the sample fraud companies have very weak governance mechanisms relative to no-fraud industry benchmarks. Consistent with prior research, the fraud companies in the technology and ...


Audit Committee Composition And Auditor Reporting, Joseph Carcello, Terry Neal Sep 2000

Audit Committee Composition And Auditor Reporting, Joseph Carcello, Terry Neal

Joseph V. Carcello

This study examines the relation between the composition of financially distressed firms' audit committees and the likelihood of receiving going-concern reports. For firms experiencing financial distress during 1994, we find that the greater the percentage of affiliated directors on the audit committee, the lower the probability the auditor will issue a going-concern report. These results support regulators' concern about financial-reporting quality and the recent calls for more independent audit committees.


Should You Offer A Job To Your External Auditor?, Mark Beasley, Joseph Carcello, Dana Hermanson Apr 2000

Should You Offer A Job To Your External Auditor?, Mark Beasley, Joseph Carcello, Dana Hermanson

Joseph V. Carcello

Companies searching for senior executive talent often lure partners from the firms that perform their annual audits. But this can be risky, warn the authors. Is it worth it? How can you manage those risks?


Financial Information Resources For Special Librarians, Di Su Apr 2000

Financial Information Resources For Special Librarians, Di Su

Publications and Research

Speed has always been a competitive factor and corporate asset in business world. The growth of the Internet has created an equal opportunity for information service professionals in both big and small companies to improve their efficiency. The prominent advantages of Web source are currency, accessibility, and thus, the speed. You are provided with instant updates on issues like rules, official statements, interpretations, statistics, etc., and these documents can be accessed twenty-four hours a day, seven days a week. There are so many valuable Web sites on the Internet that it is impossible to include them all in this article ...


Going-Concern Opinions: The Effects Of Partner Compensation Plans And Client Size, Joseph Carcello, Dana Hermanson, H. Huss Feb 2000

Going-Concern Opinions: The Effects Of Partner Compensation Plans And Client Size, Joseph Carcello, Dana Hermanson, H. Huss

Joseph V. Carcello

Partner compensation plans in large accounting firms tend to emphasize either local office profits or worldwide firm profits (“small-pool” or “large-pool” firms, respectively) (Trompeter 1994). Some have expressed concern over possible impairment of auditor independence when a small-pool compensation plan is used, and Trompeter (1994) found in an experimental setting that partners in small-pool firms were less likely to require income-decreasing adjustments.We examine, in an archival setting, the association of partner compensation plans and client size with auditors' propensity to issue going-concern audit opinions to stressed clients. We find no evidence that auditors' going-concern reporting decisions were directly affected ...


A Decision Aid For Assessing The Likelihood Of Fraudulent Financial Reporting, T. Bell, Joseph Carcello Feb 2000

A Decision Aid For Assessing The Likelihood Of Fraudulent Financial Reporting, T. Bell, Joseph Carcello

Joseph V. Carcello

The auditor's responsibility for detecting fraudulent financial reporting is of continuing importance to both the profession and society. The Auditing Standards Board has recently issued SAS No. 82, Consideration of Fraud in a Financial Statement Audit, which makes the auditor's responsibility for the detection of material fraud more explicit without increasing the level of responsibility.Using a sample of 77 fraud engagements and 305 nonfraud engagements, we develop and test a logistic regression model that estimates the likelihood of fraudulent financial reporting for an audit client, conditioned on the presence or absence of several fraud-risk factors. The significant ...


Lockups And Delaware Venue In Corporate Law And Bankruptcy, David A. Skeel Jr. Jan 2000

Lockups And Delaware Venue In Corporate Law And Bankruptcy, David A. Skeel Jr.

Faculty Scholarship at Penn Law

No abstract provided.