Business Commons^™

Audit Evidence, Technology, And Judgement: A Review Of The Literature In Response To Ed‐500, Dereck Barr‐Pulliam, Christopher G. Calvin, Marc Eulerich, Arpine Maghakyan

Accounting Faculty Publications

In October 2022, the International Auditing and Assurance Standards Board (IAASB) issued Exposure Draft 500 (ED-500). This is focused on revising and integrating the standard auditors use when evaluating audit evidence during an external audit. This study contributes to the ongoing discourse as the IAASB evaluates feedback to ED-500 and executes its standard-setting agenda. We review academic literature published in the past 10 years to synthesize extant knowledge specifically on the use of technology and the application of professional skepticism during audit evidence evaluation. Our review offers factors the IAASB should consider when seeking to modernize and future-proof its standards, …

An Extension Of The Theory Of Technology Dominance: Capturing The Underlying Causal Complexity, Steve G. Sutton, Vicky Arnold, Matthew Holt

Accounting Faculty Publications

The Theory of Technology Dominance (TTD) provides a theoretical foundation for understanding how intelligent systems impact human decision-making. The theory has three phases with propositions related to (1) the foundations of reliance, (2) short-term effects on novice versus expert decision-making, and (3) long-term epistemological effects related to individual deskilling and profession-wide stagnation. In this theory paper, we propose an extension of TTD, that we refer to as TTD2, primarily to increase our theoretical understanding of how, why, and when the short-term and long-term effects on decision-making occur and why advances in technology design have exacerbated some weaknesses and eroded some …

Insights Into The Accuracy Of Social Scientists’ Forecasts Of Societal Change, Sangsuk Yoon

Management and Marketing Faculty Publications

How well can social scientists predict societal change, and what processes underlie their predictions? To answer these questions, we ran two forecasting tournaments testing the accuracy of predictions of societal change in domains commonly studied in the social sciences: ideological preferences, political polarization, life satisfaction, sentiment on social media, and gender-career and racial bias. After we provided them with historical trend data on the relevant domain, social scientists submitted pre-registered monthly forecasts for a year (Tournament 1; N = 86 teams and 359 forecasts), with an opportunity to update forecasts on the basis of new data six months later (Tournament …

Faculty Start-Up Negotiations: An Examination Of Gender Differences And Recommendations For Improvement Opportunities At The University Of Dayton, Kathrin Hanek

Reports from the Gender Equity Research Fellowship

Amidst well-documented gender differences in negotiation and gender wage gaps in academia, ensuring gender equity in faculty start-up negotiations is an important part of the University of Dayton’s commitment to diversity, equity, and inclusion. The current investigation examined the faculty start-up negotiation process at the University of Dayton from the perspective of department chairs and new tenure-track faculty hires with an emphasis on gender differences in the initiation and outcomes of negotiations as well as potential underlying factors that may contribute to gender disparities.

Data collected from surveys and interviews indicated gender differences primarily in the initiation of negotiations, satisfaction …

Digital Marketing: A Deep Dive & Path Forward, Gary Bernstein

Graduate Student Showcase

My project was a deep dive and a path forward into the Commonwealth Associates, Inc.'s digital marketing presence using the tools, analytics, and current practices acquired from MBA 631. This included critical assessments, key take-aways with recommendations, and also included additional funds for Commonwealth’s 2021 marketing budget.

Anatomy Of The Edelman: Measuring The World’S Best Analytics Projects, Michael F. Gorman, Lakshminarayana Nittala, Jeffrey M. Aldenb

MIS/OM/DS Faculty Publications

Each year, the INFORMS Edelman Award celebrates the best and most impactful implementations of operations research, management science, and analytics. As the Edelman Award approaches its 50-year mark, we provide a history and characterization of the award’s finalists and winners. We provide some basic descriptive analytics about the participating organizations and authors, the impact of their work, and the methods they employed. We also conduct predictive analytics on finalist submissions, gauging contributors to success in establishing winning entries. We find that predicting Edelman winners a priori is extremely difficult; however, given a set of finalists, predictive models based on monetary …

Seeing The Global Physical Context Of Wholeness, Hamid Rafizadeh

Learning Teaching Forum

Kennedy Union 311

The pursuit of the whole person through models like 3H (head, heart, hands) my miss a critical physical aspect within which the wholeness develops and exists. One such aspect originates at the earth’s two versions. Humankind has a good understanding of one version and little if any of the second. Such lack of knowledge would adversely affect the development and maintenance of human wholeness. This proposal considers a workshop at the 2020 Learning and Teaching Forum to address this knowledge deficiency in University of Dayton’s community through participative knowledge processing and systems thinking.

The Velocity Of Risk, Sridhar Ramamoorti, James H. Wanserski, Richard Stover

Accounting Faculty Publications

Only a few decades ago, the onset of problematic risk events often was slow, and organizations handled the corresponding aftermath over a manageable time frame. Organizations armed with extensive public relations resources responded to most postevent crises after planning and analyzing thoughtful responses. Additionally, organizations carefully calculated their transparency with stakeholders regarding the event to manage its impact on the organization. Fast forward to today, and the pace of information is almost instantaneous. For example, when a popular U.S. fast food restaurant chain experienced an outbreak of E. coli-infected lettuce, its stock price decreased 44 percent within 90 days amid …

The Real-Time Revolution: Transforming Your Organization To Value Customer Time, Jerry Power, Thomas W. Ferratt

Books and Book Chapters by University of Dayton Faculty

Publisher's description: Business survival requires valuing what customers value—and in our overworked and distraction-rich era, customers value their time above all else. Real-time companies beat their rivals by being faster and more responsive in meeting customer needs.

To become a real-time company, as top scholars Jerry Power and Tom Ferratt explain, you need a real-time monitoring and response system. They offer detailed advice on how to put procedures in place that will collect data on how well products or services are saving customer time; identify strengths, weaknesses, threats, and opportunities; and specify innovations needed to save even more customer time. …

Risk Consumption, Sridhar Ramamoorti, Rick Stover

Accounting Faculty Publications

Understanding the difference between risk appetite and risk tolerance can deter organizations from digesting too much risk.

The concepts of risk appetite and risk tolerance were introduced in 2004 in The Committee of Sponsoring Organizations of the Treadway Commission’s (COSO’s) Enterprise Risk Management–Integrated Framework. Specifically, COSO defines risk appetite as “the amount of risk — on a broad level — that an entity is willing to accept in pursuit of value.” Naturally, organizations will have different risk appetites depending on their industry, management philosophy, operating style, culture, and objectives. Therefore, a range of appetites potentially exist for distinct risks, which …

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

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

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 …

Salesperson Networking Behaviors And Creativity: Exploring An Unconventional Relationship, Michael T. Krush, Raj Agnihotri, Gerrard M. Macintosh, Ashish Kalra

Management and Marketing Faculty Publications

A great deal of emerging research explores the antecedents and outcomes of salesperson creativity. However, relatively fewer scholarly endeavors have delved into assessing the social antecedents of salesperson creativity. Addressing this issue, the current research focuses on the link between one critical social antecedent in sales research, namely that of networking behaviors, and creativity among salespeople. Specifically, we include customer and professional networking behaviors and study their direct, interactive, and curvilinear effects on salesperson creativity. Empirical findings show that professional networking as well as customer networking are positively related to salesperson creativity. Further, we demonstrate the non-linear effects of professional …

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

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.

The Integrity Of Financial Analysts: Evidence From Asymmetric Responses To Earnings Surprises, Rui Lu, Wenxuan Hou, Henry Oppenheimer, Ting Zhang

Economics and Finance Faculty Publications

This paper investigates the integrity of financial analysts by examining their recommendation responses to large quarterly earnings surprises. Although there is no significant difference in recommendation changes between affiliated and unaffiliated analysts in response to positive earnings surprises, affiliated analysts are more reluctant than unaffiliated analysts to downgrade stock recommendations in response to negative earnings surprises. The evidence implies that conflicts of interest undermine the integrity of financial analysts. We further examine the effects of reputation concern and the Global Research Analyst Settlement as informal and formal mechanisms, on restoring analysts’ integrity. The results show that the positive bias in …

Suffering In Silence: Investigating The Role Of Fear In The Relationship Between Abusive Supervision And Defensive Silence, Christian Kiewitz, Simon Lloyd D. Restubog, Mindy K. Shoss, Patrick Raymund James M. Garcia, Robert L. Tang

Management and Marketing Faculty Publications

Drawing from an approach-avoidance perspective, we examine the relationships between subordinates’ perceptions of abusive supervision, fear, defensive silence, and ultimately abusive supervision at a later time point. We also account for the effects of subordinates’ assertiveness and individual perceptions of a climate of fear on these predicted mediated relationships. We test this moderated mediation model with data from three studies involving different sources collected across various measurement periods. Results corroborated our predictions by showing (a) a significant association between abusive supervision and subordinates’ fear, (b) second-stage moderation effects of subordinates’ assertiveness and their individual perceptions of a climate of fear …

Public Corruption: Causes, Consequences & Countermeasures, Victor Hartman, Sridhar Ramamoorti

Accounting Faculty Publications

The article discusses the cause and consequences of public corruption in the U.S. It mentions several countermeasures against public corruption which include strengtening the organizational commitment, behaviour, and emphasizing code of ethics. The article also mentions the conflict of interests, challenges on law enforcement, and asset misappropriation.

Promoting And Supporting Effective Organizational Governance, Sridhar Ramamoorti, Alan N. Siegfried

Accounting Faculty Publications

Internal audit’s role in organizational governance has become increasingly important in the wake of the recent global financial crisis and the continuing spate of governance failures in both financial and public sectors throughout the world. Informed observers and commentators have asked initially, “Where were the external auditors?” then “Where was the audit committee?” and finally, “Where was internal audit in all this?” This report draws on survey responses from internal auditors in 166 countries to take stock of the current role of internal audit in the governance process and learn how internal audit can better position itself to contribute to …

Assessing The Emphasis On Information Security In The Systems Analysis And Design Course, William David Salisbury, Thomas W. Ferratt, Donald E. Wynn

MIS/OM/DS Faculty Publications

Due to several recent highly publicized information breaches, information security has gained a higher profile. Hence, it is reasonable to expect that information security would receive an equally significant emphasis in the education of future systems professionals. A variety of security standards that various entities (e.g., NIST, COSO, ISACA-COBIT, ISO) have put forth emphasize the importance of information security from the very beginning of the system development lifecycle (SDLC) to avoid significant redesign in later phases. To determine the emphasis on security in typical systems analysis and design (SA&D) courses, we examine (1) to what extent security is emphasized in …

A Simulation-Based Approach To Solve A Specific Type Of Chance Constrained Optimization, Lijian Chan

MIS/OM/DS Faculty Publications

We solve the chance constrained optimization with convex feasible set through approximating the chance constraint by another convex smooth function. The approximation is based on the numerical properties of the Bernstein polynomial that is capable of effectively controlling the approximation error for both function value and gradient. Thus, we adopt a first-order algorithm to reach a satisfactory solution which is expected to be optimal. When the explicit expression of joint distribution is not available, we then use Monte Carlo approach to numerically evaluate the chance constraint to obtain an optimal solution by probability. Numerical results for known problem instances are …

International Management: Strategic Opportunities And Cultural Challenges, Paul B. Sweeney, Dean B. Mcfarlin

Management and Marketing Faculty Publications

As the economies of many countries become more interrelated, international managers are facing huge challenges and unique opportunities associated with their roles. Now in its fifth edition, Sweeney and McFarlin's International Management embodies a balanced and integrated approach to the subject, emphasizing the strategic opportunities available to firms on a global playing field, as well as exploring the challenges of managing an international workforce.

Integrating theory and practice across all chapter topics, this book helps students to learn, grasp, and apply the underlying principles of successful international management:

• Understanding the broad context of international business, including the critical trends impacting …

Lost Opportunities: The Underuse Of Tax Whistleblowers, Sarah J. Webber, Karie Davis-Nozemack

Accounting Faculty Publications

Legal literature on whistleblower programs often assumes an agency’s ability to effectively use a whistleblower tip. This article challenges that assumption in the context of tax enforcement by exposing the Internal Revenue Service’s dismal performance. The article uses Fourth Amendment jurisprudence, taxpayer privacy law, as well as whistleblower and tax enforcement literature to propose a new approach to using information from tax whistleblowers.

Capacity Planning With Financial And Operational Hedging In Low‐Cost Countries, Lijian Chen, Shanling Li, Letian Wang

MIS/OM/DS Faculty Publications

The authors of this paper outline a capacity planning problem in which a risk-averse firm reserves capacities with potential suppliers that are located in multiple low-cost countries. While demand is uncertain, the firm also faces multi-country foreign currency exposures. This study develops a mean-variance model that maximizes the firm’s optimal utility and derives optimal utility and optimal decisions in capacity and financial hedging size. The authors show that when demand and exchange rate risks are perfectly correlated, a risk- averse firm, by using financial hedging, will achieve the same optimal utility as a risk-neutral firm. In this paper as well, …

The Promises And Challenges Of Innovating Through Big Data And Analytics In Healthcare, Donald E. Wynn, Renée M. E. Pratt

MIS/OM/DS Faculty Publications

In this article, we present the promises and challenges of big data and analytics (BD&A) in healthcare, informed by our observations of and interviews with healthcare providers in the US and European Union (EU). We then provide a set of recommendations for capitalizing on the extraordinary innovation opportunities available through big data.

An Analysis Of Risk-Taking Behavior For Public Defined Benefit Pension Plans, Nancy Mohan, Ting Zhang

Economics and Finance Faculty Publications

This paper presents the first comprehensive study on the determinants of public pension fund investment risk and reports several new important findings. Unlike private pension plans, public funds undertake more risk if they are underfunded and have lower investment returns in the previous years, consistent with the risk transfer hypothesis. Furthermore, pension funds in states facing fiscal constraints allocate more assets to equity and have higher betas. There also appears to be a herding effect in that CalPERS equity allocation or beta is mimicked by other pension funds. Finally, our results suggest that government accounting standards strongly affect pension fund …

Drawing Lessons From The U.K. Constitutional Reform Act Of 2005, Terence J. Lau

Management and Marketing Faculty Publications

In this City Square dialogue, Professor Judith Maute provided the initial spark in her important 2007 article on reforms to judicial selection in the United Kingdom.[1] In her article, Professor Maute outlined the breathtaking and daring changes implemented in the U.K. that upended centuries of tradition to modernize and strengthen public confidence in the judiciary. Most significant among these changes were the creation of a Supreme Court and dramatically moving the process of becoming a judge away from a secretive appointment to a professional Judicial Appointments Commission.[2] The reforms eschew direct affirmative action, but place an explicit value on diversity …

Should Religious Organizations Worry About Irs Audits?, Sarah J. Webber, Janet S. Greenlee

Accounting Faculty Publications

A great deal of media attention has focused on recent perceived financial abuses of churches and religious organizations. Cases of fraud within religious organizations have fueled the public perception that churches require some form of monitoring to prevent financial abuse. However, the IRS has limited authority to audit religious organizations under section 7611, and the results of such audits are generally unavailable to the public.

Through a Freedom of Information Act request, we obtained the outcomes of all section 7611 IRS audits of religious organizations conducted between 2001 and 2010. We found that although the number of both churches and …

Standard Costing Variances: Potential Red Flags Of Fraud?, Cecily A. Raiborn, Janet B. Butler, Lucian Zelazny

Accounting Faculty Publications

This article focuses on how standard cost variances can be used in detecting potential fraudulent activities. Each primary type of variance (material, labor, and overhead) is addressed with a discussion of possible inappropriate causal factors. Additionally, internal controls, graphic techniques, and other methods that can be implemented to combat fraud are provided.