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Full-Text Articles in Business Law, Public Responsibility, and Ethics
Voluntary Changes In Accounting Principle: Literature Review, Descriptive Data, And Opportunities For Future Research, Marsha B. Keune, Timothy M. Keune, Linda C. Quick
Voluntary Changes In Accounting Principle: Literature Review, Descriptive Data, And Opportunities For Future Research, Marsha B. Keune, Timothy M. Keune, Linda C. Quick
Accounting Faculty Publications
Voluntary changes in accounting principle represent explicit and fundamental decisions by managers to exercise accounting discretion. This paper develops an organizing framework to review prior literature on voluntary changes, provides descriptive insights on contemporary changes, and identifies opportunities for future research on voluntary changes. The voluntary change literature is robust and has examined many questions using data prior to the Sarbanes-Oxley Act of 2002 (SOX). We find that contemporary voluntary changes often vary across the pre-SOX, post-SOX, and post-SFAS No. 154 periods by the materiality of their income effect, issue type, and justifications provided by managers, suggesting that manager use …
Materiality Defined: Differing Concepts Of Materiality Can Cause Confusion Among Stakeholders, Michael P. Fabrizius, Sridhar Ramamoorti
Materiality Defined: Differing Concepts Of Materiality Can Cause Confusion Among Stakeholders, Michael P. Fabrizius, Sridhar Ramamoorti
Accounting Faculty Publications
Because the term materiality arose within the context of financial reporting and statement assurance, internal auditors have been challenged in adapting or creating a definition that is relevant for themselves and their stakeholders. In the context of financial reporting, materiality is relevant to three stakeholder groups: 1) preparers of financial statements, 2) auditors, and 3) users of financial statements. Although materiality decisions are made by only two of these three groups--preparers and auditors--most internal auditors' conception of materiality likely has a user orientation. The auditor might ask, "How would a reasonably prudent investor react to the magnitude of misstatement (under- …
A Strategy For Teaching Critical Thinking: The Sellmore Case, Joseph F. Castellano, Susan Lightle, Bud Baker
A Strategy For Teaching Critical Thinking: The Sellmore Case, Joseph F. Castellano, Susan Lightle, Bud Baker
Accounting Faculty Publications
The importance of teaching and applying critical thinking skills is apparently matched by its difficulty in doing so. Sara Rimer, writing for the January 18, 2011, edition of The Hechinger Report, discussed a study by Richard Arum that followed several thousand undergraduates from when they entered college in fall 2005 to when they graduated in spring 2009. Arum’s research, published in his book Academically Adrift: Limited Learning on College Campuses, found that large numbers of students did not learn critical thinking, complex reasoning, and written communication skills. Arum used testing data and student surveys from 24 colleges and universities ranging …
Auditing Organizational Governance: Internal Audit Has An Integral Role To Play In Improving The Organization's Strategic Performance, Sridhar Ramamoorti, Alan N. Siegfried, P. Alan White
Auditing Organizational Governance: Internal Audit Has An Integral Role To Play In Improving The Organization's Strategic Performance, Sridhar Ramamoorti, Alan N. Siegfried, P. Alan White
Accounting Faculty Publications
Organizational governance is a broad concept that ensures superior strategy formulation, development, and execution in ways that balance performance, conformance, and accountability. It includes systems, controls, and associated processes that promote ethics and values, performance and accountability, and risk communication and coordination among the board, external and internal auditors, and management in meeting and exceeding stakeholder expectations. Internal audit’s role in organizational governance has always been recognized and valued, but it has become increasingly important in the wake of governance failures in financial and public sectors throughout the world. As a result, more and more boards as well as executive …
Why Audit Teams Need The Confidence To Speak Up, Susan Lightle, Joseph F. Castellano, Bud Baker
Why Audit Teams Need The Confidence To Speak Up, Susan Lightle, Joseph F. Castellano, Bud Baker
Accounting Faculty Publications
A climate of psychological safety is an important prerequisite for effective interpersonal relationships among audit team members and for audit teams to properly meet their fiduciary responsibilities. Audit processes can be more effective and the quality of audits can be improved if auditors understand the concept of psychological safety and its application for audit teams. The failure to create a climate of psychological safety among audit team members can have harmful effects on audit quality, but fortunately CPA firms can take steps to enhance psychological safety and enable more effective audit processes and audit work.