Business Commons^™

How Do Team Workloads And Team Staffing Affect The Audit? Archival Evidence From U.S. Audits, Brant E. Christensen, Nathan J. Newton, Michael S. Wilkins

Faculty Publications

We use U.S. data from a global accounting firm to investigate how two key elements of audit teams eworkloads and staffing continuity e affect the audit. We find that heavier team workloads are associated with lower audit quality, particularly when team members have lower performance ratings or have total workloads that exceed 60 h per week. In addition to finding evidence of employee burnout, we also document an incremental distraction effect. Specifically, we find that audit quality on the primary client suffers when team members spend more time during busy season on other concurrent clients. Regarding continuity, we find that …

Prepare For Takeoff: Improving Asset Measurement And Audit Quality With Drone-Enabled Inventory Audit Procedures, Margaret H. Christ, Scott A. Emett, Scott L. Summers, David A. Wood

Faculty Publications

Auditors increasingly employ technologies to improve audit quality. Using a design science approach, we examine whether using drones and automated counting software can improve audit quality and thereby improve financial reporting. We assess three dimensions of audit quality—efficiency, effectiveness, and quality of audit documentation. We provide evidence that auditors can perform inventory counts with these technologies much more efficiently than they can with manual techniques, decreasing count time in our study from 681 hours to 19 hours. At the same time, auditors can maintain or improve audit effectiveness with these technologies, decreasing error rates in our study from 0.15% to …

The Effects Of Pornography On Unethical Behavior In Business, Nathan W. Mecham, Melissa F. Lewis-Western, David A. Wood

Faculty Publications

Pornography is no longer an activity confined to a small group of individuals or the privacy of one’s home. Rather, it has permeated modern culture, including the work environment. Given the pervasive nature of pornography, we study how viewing pornography affects unethical behavior at work. Using survey data from a sample that approximates a nationally representative sample in terms of demographics, we find a positive correlation between viewing pornography and intended unethical behavior. We then conduct an experiment to provide causal evidence. The experiment confirms the survey—consuming pornography causes individuals to be less ethical. We find that this relationship is …

Implicit Attitudes And U.S. Tax Professionals’ Reliance On Offshore Tax Professionals’ Recommendations, Brian C. Spilker, Bryan W. Stewart, David A. Wood

Faculty Publications

Large accounting firms offshore a significant amount of tax work to professionals in India. Prior research suggests that individuals can have negative implicit attitudes toward people from different nationalities and that negative implicit attitudes can have undesired consequences. In this study, we measure a sample of U.S. tax professionals’ implicit attitudes toward Indian persons using an implicit association test (IAT) and assess whether the U.S. tax professionals respond differently to work produced by Indian versus U.S. tax professionals and whether implicit attitudes affect the U.S. professionals’ assessments of Indian tax professionals’ work product. We document that participants in our study …

How Has The Change In The Way Auditors Determine The Audit Report Date Changed The Meaning Of The Audit Report Date? Implications For Academic Research, Steven M. Glover, James C. Hansen, Timothy Seidel

Faculty Publications

Archival research in accounting often relies on the audit report date to capture the constructs of audit efficiency, audit timeliness, audit effort, or audit completion. Auditors’ view of what constitutes sufficient appropriate evidence to support the audit opinion, and consequently the date of the audit report, previously coincided with the substantial completion of audit fieldwork, which would be days or weeks before a 10-K filing. However, this view has shifted to coincide with the timing of the public issuance of clients’ financial statements (i.e., the 10-K filing date) following several regulatory actions, audit practice changes, and professional standard setting changes …

Beyond Borders: Uncertainty In Supragovernmental Tax Enforcement And Corporate Investment, Zackery D. Fox, Martin Jacob, Jaron H. Wilde, Ryan J. Wilson

Faculty Publications

Amid growing globalization, many countries have offered tax incentives to attract corporate investment. Prior research studies the role such incentives play in firms’ location and investment choices. However, we have limited evidence on the role that uncertainty about the intensity of future tax enforcement plays in those decisions. In 2013, the European Commission (“E.C.”) abruptly began investigating tax ruling practices of several countries in response to allegations that certain firms received preferential tax treatment (“state aid cases”). We use this setting to study the economic consequences of increased uncertainty about future tax enforcement. We find evidence consistent with significant reductions …

Nurse Retention Strategies In The Healthcare Industry, Luke Anthony Nicholson

Walden Dissertations and Doctoral Studies

Nurse turnover in the healthcare industry is detrimental to the quality-of-care patients receive, organizational financial health, and nurse job satisfaction. Nurse managers who lack effective nurse retention strategies might struggle to reduce voluntary turnover, which can adversely impact nurse job satisfaction and patient care quality. Guided by the unfolding model of voluntary employee turnover and job embeddedness theory, the purpose of this qualitative multiple case study was to explore retention strategies nurse managers use to reduce the voluntary turnover of nurses. The participants were three nurse managers at three hospitals in central and southern Illinois with proven strategies to reduce …

Do Bears Prefer The Weak And The Downtrodden? The Effects Of The 52-Week Low And Financial Strength On Short-Seller Behavior, Christopher Alan Miller

Electronic Theses and Dissertations

This dissertation investigates the effects of a company’s financial strength on short-seller behavior around a non-information-producing event. The distance of a stock price to its 52-week high or low does not provide fundamental information, but the price extremes serve as salient price points upon which investors anchor their expectations of future stock performance. Using a large sample of daily short sales data, I investigated the effects of both the proximity to the 52-week low and the financial strength of the underlying company on short-seller behavior. I found that short-selling volume increases as the price nears its 52-week low and that …

Less Commute Miles. Decreased Tire Wear. What Would You Do?, Dylan Schwarz, Brendon M. Ford, Brandon D. Hadinger, Abbie N. Pearce, Jacinta M. Pikunas

Williams Honors College, Honors Research Projects

With the flagrant recognition of the coronavirus as one of those most impactful viruses in the history of the world, it is important to study how the effects of such a disease can create troublesome ripple effects in the world. Covid-19 has caused the death of hundreds of thousands of individuals and has negatively impacted the lives of American’s all across the country during the nationwide lockdown. Decreased work commuters, minimal road travel, and little need for car repairs hit the Goodyear Tire and Rubber Company hard. The University of Akron has teamed up with Goodyear to explore such effects …

Spotify: Strategic Plan And Analysis, Riley T. Sletten

Undergraduate Theses, Professional Papers, and Capstone Artifacts

Spotify is a worldwide music and podcast streaming company. Spotify has the most active users of any audio streaming company in the world and is a key competitor in a growing industry. It is important to evaluate the external environment and internal forces that impact Spotify’s strategic decision-making to identify opportunities and threats that could change the audio streaming landscape. Drawing on industry research, company financial statements, and media reports, this paper analyzes the external and internal environment of Spotify to identify a strategic recommendation for the company going forward. I analyze different business frameworks to evaluate the competitive landscape …

Aicpa Proposed Statement On Quality Management Standards: A Firm’S System Of Quality Management (Sqms 1) Overview Of Significant Changes, American Institute Of Certified Public Accountants. Auditing Standards Board

Exposure Drafts, Comment Letters, and Statements of Position

No abstract provided.

Proposed Statement On Quality Management Standards: A Firm’S System Of Quality Management, American Institute Of Certified Public Accountants. Auditing Standards Board

Exposure Drafts, Comment Letters, and Statements of Position

No abstract provided.

Official Release: Revised “Records Requests” Interpretation (Et Sec. 1.400.200) Under The “Acts Discreditable Rule” (Et Sec. 1.400.001), Effective July 31, 2021, American Institute Of Certified Public Accountants. Professional Ethics Division

AICPA Professional Standards

No abstract provided.

Codification Of Statements On Standards For Attestation Engagements, Numbers 18 To 22, As Of January 2021, American Institute Of Certified Public Accountants (Aicpa)

AICPA Professional Standards

No abstract provided.

Not-For-Profit Entities Industry Developments - 2021; Audit Risk Alerts, American Institute Of Certified Public Accountants (Aicpa)

Industry Guides (AAGs), Risk Alerts, and Checklists

No abstract provided.

Codification Of Statements On Standards For Accounting And Review Services, Numbers 21-25, As Of January 2021, American Institute Of Certified Public Accountants (Aicpa)

AICPA Professional Standards

No abstract provided.

Codification Of Statements On Auditing Standard, Numbers 122 To 133 (Pre-Sas No. 134), As Of January 2021, Volume 2, American Institute Of Certified Public Accountants (Aicpa)

AICPA Professional Standards

No abstract provided.

Codification Of Statements On Auditing Standard, Numbers 122 To 143, As Of January 2021, Volume 1, American Institute Of Certified Public Accountants (Aicpa)

AICPA Professional Standards

No abstract provided.

Proposed Quality Management Standards, American Institute Of Certified Public Accountants. Auditing Standards Board

Exposure Drafts, Comment Letters, and Statements of Position

No abstract provided.

Perceive It Or Not: Information Quality And The Investors’ Response To Earning Surprises Of Technologically Advanced Companies, Aliza Rotenstein, David Gelb, Abraham Fried, Shoshana Altschuller

Journal of International Technology and Information Management

One of the primary measures of information systems (IS) success that has been the subject of much investigation in a variety of contexts is information quality (DeLone & McLean, 1992; 2003). This paper hones in on the impact of perceived information quality in the context of the financial markets, where quality of accounting information is particularly important, as it informs investment decisions and impacts stock prices. In particular, seminal accounting research has consistently found that earnings announcements possess informational value (information content) based upon which the market reacts (Beaver, 1968). Market reaction to surprises in earnings announcements has long been …

Mapping The Knowledge Of Islamic Accounting Studies On Shariah Audit: A Bibliometric Analysis, Luqman Hakim Handoko, Sepky Mardian

Library Philosophy and Practice (e-journal)

The issues of shariah audit appeared more than three decades ago along with the progress of the Islamic financial industries. But it is challenging to obtain a study explaining the current state of shariah audit research to date. Therefore, it is necessary to assess the research on the Shariah audit. Thus, this study aimed to analyze and visualize the current state of shariah audit using a bibliometric approach. The bibliometric analysis was conducted by using VOSviewer software. To fulfill this goal, the keywords such as shariah audit, shariah auditing, and its variations were searched from the Scopus database. The articles …

Accounting Quality And Debt Concentration, Ningzhong Li, Yun Lou, Clemens A. Otto, Regina Wittenberg-Moerman

Research Collection School Of Accountancy

We examine the relation between accounting quality and debt concentration in corporate capital structures (i.e., firms’ tendency to rely predominantly on only a few types of debt). Motivated by theoretical and empirical research that supports a strong link between debt concentration and creditors’ coordination costs and the importance of accounting quality in reducing these costs, we hypothesize that firms with higher accounting quality have less concentrated debt structures. Measuring accounting quality with a comprehensive index based on the occurrence of material internal control weaknesses, accounting restatements, SEC AAERs, and firms’ reliance on small auditors, we find that higher accounting quality …

How Do Accounting Practices Spread? An Examination Of Law Firm Networks And Stock Option Backdating, Patricia M. Dechow, Samuel T. Tan

Research Collection School Of Accountancy

We hypothesize that one way accounting practices spread is through law firm connections. We investigate this prediction by examining companies that avoided reporting compensation expense by engaging in stock option backdating. We hypothesize that executives engaged in backdating because they were desensitized to its inappropriateness when they learned through their legal counsel that other companies were engaging in this practice. We identify backdating companies through backdating-related restatements of earnings. Using network analysis, we find that backdating companies are highly connected with other backdating companies via shared law firms. Logistic regressions reveal that the odds of a company backdating are 53 …

Stock Market Volatility And Business Cycle: Exploring Cross-Country Spillovers, Nufazil Altaf

DLSU Business & Economics Review

This study explores the impact of the financial crisis on the relationship between stock market volatility and the business cycle. In addition, the possible spillover effects within a cross-country framework are also examined. The study is based on secondary macroeconomic data of monthly frequency for the time period of 1991:01 to 2012:12. Bivariate and multivariate causality techniques are used to arrive at results. Results of the study provide fresh evidence for the existence of strong bidirectional causality between stock market volatility and the business cycle for all sample countries. In fact, this bidirectional causality was found to be strong when …

The Prospect Of Indonesian Government Retail Sukuk: From The Perspective Of Sharia Financial Knowledge, Education, And Behavior, Fajri Adrianto

DLSU Business & Economics Review

As a source of government financing, the Indonesian government’s retail Sukuk is still not as popular as conventional government bonds. The Indonesian government has issued serial retail Sukuks with the code SR to get funds from retail investors, especially those concerned with Sharia values. Sharia financial literacy is expected to determine the success of this Sukuk. This study fills the gap of previous research on financial literacy by investigating the Sharia financial literacy in the investment decision. This study investigates the descriptive analysis of Sharia financial literacy in Indonesia and its relationship with the prospect of retail Sukuk issued by …

Reinforcing The Role Of Intellectual Property In The Battle Against The Pandemic: The Vowel Framework, Daniel S. Hofilena

DLSU Business & Economics Review

The intellectual property (IP) system plays a vital role in public health crises as everyone should have access to medicines and equipment to protect themselves. Thus, the State can utilize the system for the greater good. An IP-centric approach can be summarized using the simple letters of the vowels: Awareness – for the populace to respect IP rights, they must first be educated as to its value; Enforcement – for infringers to be discouraged, IP holders should have an avenue for the easy enforcement of their rights; Incentivize – for businesses to be encouraged to invest in certain forms of …

Reliance On Algorithmic Evidence: The Joint Influence Of Measurement Uncertainty And Algorithm Adaptability, Jenny Ulla

Theses and Dissertations--Accountancy

Artificial intelligence (AI) systems’ capability is rapidly expanding to perform complex tasks once reserved only for humans. With machine learning algorithms, AI can learn and adapt as it encounters more data, which has enabled these systems to improve the quality of accounting estimates that traditionally have been more difficult for humans. Although AI systems’ capability to adapt has potential benefits, these systems also have become increasingly complex, making it difficult for individuals to understand the processes or algorithms these systems use to produce advice. Practitioners worry that when algorithms behave like “black boxes” this opacity may lead to a lack …

Earnings Conference Calls And Lazy Prices, Chuancai Zhang

Theses and Dissertations--Accountancy

Changes to the language and construction of financial reports are indicative of firms’ future returns and operations. Investors, however, are often inattentive to these changes; consequently, price reactions to these changes are delayed—resulting in “lazy” prices. This study explores two possible channels through which earnings conference calls may mitigate lazy prices: (1) the topic overlap channel and (2) the comparison language channel. Specifically, I examine whether the topic overlap between conference call transcripts and 10K/10Q filings or the comparison language used on earnings conference call transcripts helps investors understand the nature of the overlapped topics and triggers investors’ attention to …

Critical Audit Matters Requirements And Auditor Reporting Behavior: Early U.S. Evidence, Valbona Sulcaj

Theses and Dissertations--Accountancy

In this study, I examine two research questions related to the reporting requirements of critical audit matters (CAMs) introduced in the Audit Standard (AS) 3101. First, I examine whether auditor’s perceived litigation risk and client’s financial reporting quality are associated with the number and textual attributes of CAMs. Second, I examine whether the number and textual attributes of CAMs are associated with audit effort and costs.

Consistent with the litigation hypothesis (Skinner, 1994), I find a positive association between litigation risk and the number of CAMs in the audit report, suggesting that auditors try to preempt negative consequences from shareholder …

Stanley Surrey, The Code And The Regime, Reuven S. Avi-Yonah, Nir Fishbien

Articles

Stanley Surrey (1910-1984) was arguably the most important tax scholar of his generation. Surrey was a rare combination of an academic (Berkeley and Harvard law schools, 1947-1961 and 1969-1981) and a government official (Tax Legislative Counsel, 1942-1947; Assistant Secretary for Tax Policy, 1961-1969). Today he is mostly remembered for inventing the concept of tax expenditures and the tax expenditure budget. This paper will argue that while Surrey was influential in shaping domestic tax policy for a generation and had an impact after his death on the Tax Reform Act of 1986, his longest lasting contributions were in shaping the international …