Traditional Investment Research And Social Networks: Evidence From Facebook Connections,
2024
Brigham Young University - Provo
Traditional Investment Research And Social Networks: Evidence From Facebook Connections, Travis Dyer, Gerrit Köchling, Peter Limbach
Faculty Publications
We show that investors acquire more public information about firms to which they are more socially proximate. On average, a standard deviation increase in the Social Connectedness Index (Bailey et al., 2018) between a firm’s headquarter county and a searcher county is associated with 30% more EDGAR filing downloads from the searcher county. The effect of social proximity on traditional investment research is distinct from the effect of geographic proximity. We find similar results studying headquarter relocations, investor-level data, and EDGAR downloads from European regions, for which physical distance should be irrelevant. Social proximity matters more during times of high …
Goodwill Elasticity And The Opportunity For Favorable Financial Reporting,
2024
University of South Dakota
Goodwill Elasticity And The Opportunity For Favorable Financial Reporting, Drew Stevenson
Dissertations and Theses
ASC 350-20 grants public business entities (PBEs) the discretion to determine timely recognition of goodwill impairment charges, which likely introduces managerial ambiguity in the goodwill impairment process. Consequently, this paper explores whether the ambiguity in goodwill accounting standards allows managers to engage in favorable financial reporting during economic disruption, such as the global financial crisis of 2008 and 2009 or the COVID-19 pandemic beginning in 2020. The study introduces an indicator variable to identify PBEs with highly elastic goodwill changes, providing insight into a PBE's internal processes and how its management practices for goodwill impairment differ from standard industry practices. …
The Intellectual Structure Of Audit Committee Research: A Bibliometric Analysis (1969 – 2020),
2024
University of Duisburg-Essen
The Intellectual Structure Of Audit Committee Research: A Bibliometric Analysis (1969 – 2020), Joel Behrend, Marc Eulerich, David A. Wood
Faculty Publications
The audit committee is a widely recognized mechanism of effective corporate governance. We advance prior literature reviews by using bibliometric analysis techniques that comprehensively process large bodies of bibliometric information. We base inferences on citation patterns of 1,173 articles to identify concepts that “shine through” within the scientific understanding of audit committees. Using content analysis, we then analyze these concepts and explore existing interrelationships. We document a declining influence of audit committee research, as well as a widening gap between the quantitative and qualitative research camps. While the former is mostly derivative in nature, the latter produces innovative insights on …
Assessing Virtual Reality’S Influence On Honesty In Reporting,
2024
Brigham Young University - Provo
Assessing Virtual Reality’S Influence On Honesty In Reporting, Jeffrey Pickerd, Nathan Waddoups, David A. Wood, Xiaomei (Grazia) Xiong
Faculty Publications
Organizations, businesses, and society are exploring and adopting virtual reality (VR) and augmented reality (AR). VR is expected to boost the global economy by $1.5 trillion by 2030. In this study, we focus on the effect of VR on an important accounting variable—reporting honesty. We examine reporting honesty across two tasks, various measures, and various populations, that are commonly used in existing research. In our initial experiment, participants misreported more in a dice rolling task when performing it in a VR setting than in a non-VR setting. However, in a second and third experiment attempting to replicate and extend our …
Short And Synthetically Distort: Investor Reactions To Deepfake Financial News,
2024
Arizona State University
Short And Synthetically Distort: Investor Reactions To Deepfake Financial News, Scott Emett, Marc Eulerich, Jeffrey Pickerd, David A. Wood
Faculty Publications
Recent advances in artificial intelligence have led to new forms of misinformation, including highly realistic “deepfake” synthetic media. We conduct three experiments to investigate how and why retail investors react to deepfake financial news. Results from the first two experiments provide evidence that investors use a “realism heuristic,” responding more intensely to audio and video deepfakes as their perceptual realism increases. In the third experiment, we introduce an intervention to prompt analytical thinking, varying whether participants make analytical judgments about credibility or intuitive investment judgments. When making intuitive investment judgments, investors are strongly influenced by both more and less realistic …
The General Anti-Avoidance Rule,
2024
Arizona State University
The General Anti-Avoidance Rule, Mary Cowx, Jon Kerr
Faculty Publications
The general anti-avoidance rule, or GAAR, is an enforcement mechanism that gives a country’s taxing authority broad power to deny a taxpayer tax benefits associated with any transaction. Although GAARs are becoming increasingly common, the presence of a GAAR is generally overlooked by researchers and thus has been left unstudied. In this paper, we provide an initial investigation by studying the effect of GAARs on firm-level corporate tax avoidance behaviors. Using an indicator for the enactment or strengthening of a GAAR within a country in a stacked difference-in-differences design, we find GAAR enactment is associated with a statistically and economically …
Estimating The Likelihood Of Future Tax Settlements,
2024
Washington University in St. Louis
Estimating The Likelihood Of Future Tax Settlements, Jared Jennings, Joshua A. Lee, Erin Towery
Faculty Publications
Corporate income tax settlements represent a substantial cash outflow for many U.S. firms. This study develops an ex-ante measure of future corporate income tax settlement likelihood using quantitative and qualitative information from Form 10-K. We find that both quantitative and qualitative information are incrementally useful in predicting future tax settlements. We then use our new measure to examine the association between predicted future tax settlements and cash holdings. In contrast with prior research documenting a positive association between reserves for uncertain tax positions and cash holdings, we find that firms with a higher likelihood of future tax settlements hold less …
Do Audit Partners Exhibit Hometown Bias?,
2024
University of Nebraska at Omaha
Do Audit Partners Exhibit Hometown Bias?, Yuzhou Chen, Timothy Seidel, Aleksandra "Ally" B. Zimmerman
Faculty Publications
We investigate whether audit partners exhibit greater leniency towards audit clients located in their childhood or pre-professional home state. While prior research has examined the audit quality effects of geographic distance between an auditor and client as well as auditors’ social ties to company management or directors, this study uniquely examines auditors’ psychological affinity to places rather than people. Using hand-collected data on audit partners, company managers, and directors, we find evidence of partners exhibiting hometown bias in the form of greater leniency towards clients’ opportunistic reporting. However, we find no evidence to suggest that these psychological biases affect audit …
Anomaly Time,
2024
Texas A&M University
Anomaly Time, Boone Bowles, Adam V. Reed, Matthew C. Ringgenberg, Jacob Thornock
Faculty Publications
We examine the timing of returns around the publication of anomaly trading signals. Using a database that captures when information is first publicly released, we show that anomaly returns are concentrated in the first month after information release dates, and these returns decay soon thereafter. We also show that the academic convention of forming portfolios in June underestimates predictability because it uses stale information, which makes some anomalies appear insignificant. In contrast, we show many anomalies do predict returns if portfolios are formed immediately after information releases. Finally, we develop guidance on forming portfolios without using stale information.
Tax Sentiment And Compliance: Evidence From Social Media,
2024
University of Texas at Austin
Tax Sentiment And Compliance: Evidence From Social Media, Andrew Belnap, Jacob Thornock, Kevin Standridge, Braden Williams
Faculty Publications
Motivations for voluntary tax compliance that fall outside of a standard, rational model can be intrinsic or extrinsic. We use social media rhetoric about taxes to create a measure of tax sentiment that reflects taxpayers’ extrinsic, behavioral motivations for voluntary compliance, and then examine the association between public tax sentiment and tax compliance. Our machinelearning based approach for measuring sentiment uses millions of tax-related tweets, which vary by time and geography. We find that tax sentiment is negatively associated with tax compliance. Our main findings and cross-sectional tests are consistent with the notion that paying one’s taxes is a way …
The Effect Of Economic Nexus On Sales Tax Avoidance And Retail Purchases,
2024
Brigham Young University - Provo
The Effect Of Economic Nexus On Sales Tax Avoidance And Retail Purchases, Zackery D. Fox, John R. Robinson, Stephen A. Stewart
Faculty Publications
We investigate the impact of adopting economic nexus laws on local consumer consumption patterns. To do so, we focus on a natural experiment involving Washington State, which enacted economic nexus in October of 2018, and its neighboring state Oregon, which has no sales tax. Utilizing data from the Nielsen Consumer Panel survey, we estimate a difference-in-differences regression to test whether the imposition of sales tax on internet purchases in Washington led to an increase in brick and mortar (B&M) retail purchases relative to those in Oregon. We report evidence that consumers in Washington increased purchases at B&M retailers relative to …
Artificial Intelligence’S Capabilities, Limitations, And Impact On Accounting Education: Investigating Chatgpt’S Performance On Educational Accounting Case,
2024
Auburn University
Artificial Intelligence’S Capabilities, Limitations, And Impact On Accounting Education: Investigating Chatgpt’S Performance On Educational Accounting Case, Xu (Joyce) Cheng, Ryan Dunn, Travis Holt, Kerry Inger, J. Gregory Jenkins, Jefferson Jones, James Long, Tina Loraas, Mollie Mathis, Jonathan Stanley, David A. Wood
Faculty Publications
This study evaluates the capabilities of ChatGPT models 3.5 and 4 to provide solutions to eight educational accounting cases. We find that ChatGPT’s ability to provide accurate solutions varies depending on the type of case requirement and topical area of accounting, with better performance on tasks requiring elements that require explanation, application of rules, and ethical evaluation. However, ChatGPT performs poorly on tasks that require financial statement creation, journal entries, or software use. Our study also finds that detection tools provided by ChatGPT's developer are ineffective in identifying text created by Artificial Intelligence Text Generators (AITG). We suggest ways in …
Automating Evaluation Of Skill Assessment To Promote Skill Acquisition In The Area Of Data Analytics Automation,
2024
Texas Tech University
Automating Evaluation Of Skill Assessment To Promote Skill Acquisition In The Area Of Data Analytics Automation, Joshua G. Coyne, Scott L. Summers, Brigham Villanueva, David A. Wood
Faculty Publications
As accounting increasingly embraces automation and data analytics, proficient skill assessment remains a challenge. We introduce an automated tool that streamlines the evaluation of Alteryx workflows. Utilizing the design science methodology, our tool effectively executes and compares Alteryx workflows against a solution, providing score and feedback. Validation demonstrates remarkable gains; our tool is error-free and 9 to 146 times faster than manual evaluation. The tool’s efficiency, accuracy, and user-friendliness make it much more feasible to assign unstructured Alteryx assignments for student development. Enhanced technology skills will promote hiring and productivity gains associated with automation in accounting.
Patience Is Key: The Time It Takes To See Benefits From Continuous Auditing,
2024
University of Duisburg-Essen
Patience Is Key: The Time It Takes To See Benefits From Continuous Auditing, Marc Eulerich, Benjamin Fligge, Vanessa Lopez Kasper, David A. Wood
Faculty Publications
Despite research showing numerous benefits to continuous auditing, uptake by internal audit functions has been quite slow. Using field data from a multinational company, we study two possible reasons for the slow uptake of continuous auditing—the time it takes for continuous auditing to result in measurable reductions in audit risks and that not every type of risk is equally likely to improve from continuous auditing. Results suggest it takes three years before observing significant risk reductions from implementing continuous auditing. We also find that the benefits of implementing continuous auditing vary by risk factor, ranging in improvement from 0 percent …
Is It All Hype? Chatgpt’S Performance And Disruptive Potential In The Accounting And Auditing Industries,
2024
University of Duisburg-Essen
Is It All Hype? Chatgpt’S Performance And Disruptive Potential In The Accounting And Auditing Industries, Marc Eulerich, Aida Sanatizadeh, Hamid Vakilzadeh, David A. Wood
Faculty Publications
ChatGPT frequently appears in the media, with many predicting significant disruptions, especially in the fields of accounting and auditing. Yet research has demonstrated relatively poor performance of ChatGPT on student assessment questions. We extend this research to examine whether more recent ChatGPT models and capabilities can pass major accounting certification exams including the Certified Public Accountant (CPA), Certified Management Accountant (CMA), Certified Internal Auditor (CIA), and Enrolled Agent (EA) certification exams. We find that the ChatGPT 3.5 model cannot pass any exam (average score across all assessments of 53.1%). However, with additional enhancements, ChatGPT can pass all sections of each …
The Dark Side Of Robotic Process Automation,
2024
University of Duisburg-Essen
The Dark Side Of Robotic Process Automation, Marc Eulerich, Nathan Waddoups, Martin Wagener, David A. Wood
Faculty Publications
Prior research on Robotic Process Automation (RPA) has largely focused on how it benefits firms and employees. In contrast, we interview 26 high-profile RPA stakeholders at a Fortune 500 firm to ascertain challenges, drawbacks, or pitfalls of using RPA. We identify five key problems related to RPA usage: (1) RPA is often used as a quick-fix band-aid instead of fixing core system issues, (2) RPA can cause serious control and security issues, (3) the true cost of RPA is often misunderstood and understated, (4) RPA governance is complicated and challenging, and (5) RPA usage can lead to a loss of …
A Demonstration Of How Chatgpt Can Be Used In The Internal Auditing Process,
2024
University Duisburg-Essen
A Demonstration Of How Chatgpt Can Be Used In The Internal Auditing Process, Marc Eulerich, David A. Wood
Faculty Publications
For the past several years, internal audit functions (IAFs) have been significantly increasing their digitization efforts to enhance the efficiency and effectiveness of the IAF. The introduction of ChatGPT has increased the potential for IAFs to have a more significant impact; however, there is little guidance on how ChatGPT can influence the day-to-day work of internal auditors. This paper demonstrates with specific examples how ChatGPT can be used to enhance all aspects of the audit process. While not comprehensive in nature, the detailed, illustrative examples should help internal auditors see actionable steps they can take to be more efficient and …
Gauging Scholarly Engagement: An Investigation Into Topic Popularity Within The Asee Cit Division,
2024
Brigham Young University - Provo
Gauging Scholarly Engagement: An Investigation Into Topic Popularity Within The Asee Cit Division, Barry M. Lunt, Mudasser Fraz Wyne, David A. Wood
Faculty Publications
Since 2011, the Computing and Information Technology (CIT) division of the ASEE has had 427 papers presented and published in the proceedings of the ASEE Annual Conference and Exposition. This paper looks at these 427 papers as a whole, providing descriptive statistics, giving the top institutions and authors that have contributed to these papers, and providing information regarding the impact of the top ten papers, as measured by their citations and downloads. We have also used the ChatGPT version 4.0 to provide categories for the 427 papers, providing insight into the most popular topics for papers in the CIT division.
The Latina Career Journey: Experiences Of Latinas In Accounting,
2024
Pepperdine University
The Latina Career Journey: Experiences Of Latinas In Accounting, Alba Ruth Prato
Theses and Dissertations
Latina voices remain largely silent in the scholarship on leadership, and their representation in leadership roles lags behind other minority and majority groups. This research explored the Latina career journey through in-depth narrative interviews with 19 Latinas who told the stories of how they carry out their role, act on opportunities, navigate between cultures, and overcome challenges. Through comprehensive qualitative analysis using a grounded theory approach, a theoretical framework emerged that brings to light the larger social and cultural forces that impact the management arena and function as levers that, when activated, hinder and facilitate the emergence of Latina leaders. …
Effects Of Firm Life Cycle On Matching And Accrual Quality,
2024
The University of Texas Rio Grande Valley
Effects Of Firm Life Cycle On Matching And Accrual Quality, Ana Mariella Bandeira, José Elias Feres De Almeida
School of Accountancy Faculty Publications
This study examines the effects of life cycle stages on the quality of revenue-expense matching and accruals of Brazilian public listed companies, and how matching affects accrual quality. Studies on the effects of firm life cycle stages on revenue-expense matching are still incipient. Furthermore, there is no prior study interconnecting the two conceptual and empirical models in a joint perspective. The study brings evidence that firm life cycle is a relevant factor in the analysis of the association between revenues and expenses and accruals with operating cash flows. This association, if properly carried out by firms, can benefit investors, analysts, …
