Accounting Commons^™

Information Systems Content In The Cma Examination, Michael Akers, Lloyd Doney

Michael D. Akers

This study examines 12 recent CMA exams administered from June 1987 through December 1992 to determine the extent of information systems (IS) coverage. We evaluated each exam using a definition of IS knowledge and skills from the common body of knowledge developed by the Institute of Management Accountants (IMA). The results of the study indicate that the IMA has recognized the importance of IS knowledge, as evidenced by the extent of exam coverage and the relevance of the items tested. Because information systems courses are included in a model curriculum recommended by the IMA, the results of this study may …

Narcissism And Accounting Majors, Jill C. Brown, Michael D. Akers, Don Giacomino

Michael D. Akers

Narcissism is a personality trait that varies in individuals much like other characteristics. Accordingly, narcissism can positively or negatively impact the leadership style and career of business leaders. While personality research has examined the level of narcissism in college-aged students over the past 30 years, only recently has limited research examined narcissism in business students. Prior research has not examined accounting students. Using the Narcissistic Personality Inventory (NPI), we assess the level of narcissism in accounting students at a public and private institution in the Midwest. Our findings show accounting students have a lower level of narcissism than other business …

An Examination Of Underreporting Of Time And Premature Signoffs By Internal Auditors, Qianhua Ling, Michael D. Akers

Michael D. Akers

The passage of the Sarbanes-Oxley Act of 2002 (SOX) heightened the importance of internal controls and accordingly, a key control - the internal audit junction. Consequently, management and external auditors have both increased their reliance on internal auditors' work. While there has been considerable research regarding the impact of the underreporting of time and premature sign-offs on the external audit, there has only been one study that has examined the impact of these two items on the internal auditors' work. Such research is dated (1994) and prior to the passage of SOX. We surveyed members of the Institute of Internal …

Fin 48: The Impact On Staffing, Internal Control Processes And Expertise Of Privately-Held Companies, Reed Kirschling, Michael Akers

Michael D. Akers

While FASB Interpretation 48 (FIN 48), Accounting for Uncertainty in Income Taxes-An Interpretation of Statement of Financial Accounting Standards (SF AS) 109, Accounting for Income Taxes applies to both privately-held and publicly traded companies, privately-held companies have characteristics that can impact implementation. This paper reports the findings of a survey of the top 100 privately-held companies to determine how these organizations are addressing the staffing of tax department personnel, process controls and knowledge acquisition during the implementation of FIN 48.

Measuring And Changing The Values Of Accounting Students, Michael Akers, Tim V. Eaton, Don Giacomino

Michael D. Akers

Although prior research has consistently shown that personal values influence behavior, limited research and curricular activity have been conducted with respect to the role of personal values in accounting. This purpose of this paper is to propose a methodology that accounting programs can use to measure the personal values of students. Specifically, we examine the Muser and Orke Typology for measuring personal values. Using students from a comprehensive, private university in the Midwest, we discuss the administration of the instrument and the evaluation of the results. The paper concludes with a detailed description of how accounting programs can apply this …

Earnings Management And Its Implications, Michael Akers, Don Giacomino, Jodi L. Gissel

Michael D. Akers

In the wake of continuing, highly publicized financial frauds and failures, the accounting profession has placed renewed emphasis on issues related to earnings management and earnings quality. Staff Accounting Bulletin 101, Revenue Recognition in Financial Statements, which was issued in December 1999 in response to the Committee of Sponsoring Organizations of the Treadway Commission report, illustrates the importance of earnings to the SEC. The SEC and the public are demanding greater assurance about the quality of earnings. Notwithstanding the grave threat that abusive earnings-management practices pose to the reliability and accuracy of financial statements, the accounting profession may be reluctant …

Going-Concern Opinions: Broadening The Expectations Gap, Michael D. Akers, Meredith A. Maher, Don Giacomino

Michael D. Akers

A rash of high-profile bankruptcies has led to a search for answers. Many hold auditors responsible for not detecting the potential for bankruptcy during the most recent audit. The Weiss Report, a study of several dozen bankrupt companies submitted to the U.S. Senate during its deliberations on the Sarbanes-Oxley Act, found a "broad and massive failure" on the part of auditors to raise "yellow flags" that indicate potential bankruptcy. The authors examined Weiss' methodology and found that, applied to a broader group of companies, Weiss' criteria would have incorrectly predicted bankruptcy for nearly half of the non-bankrupt companies studied. This …

Graduate Student Audit Project, Michael D. Akers, Jodi L. Gissel

Michael D. Akers

This paper discusses Marquette University’s graduate student audit project, designed to enhance student learning and retention of auditing procedures and concepts learned in the classroom.

Corporate Governance, Risk Assessment And Cost Of Debt, Husam Aldamen, Keith Duncan, Ray Mcnamara

Ray McNamara

This paper examines the impact of corporate governance practices on the reported cost of contracted debt for Australian listed companies. Good governance decreases the variability in cash flows, reduces the probability of default (reduces default risk), increases the quality of value-relevant information disclosed (reduces the information risk) and thereby lowers the cost of debt (Ashbaugh-Skaife, Collins, and LaFond 2006; Sengupta 1998; Bhojraj and Sengupta 2003; Beekes and Brown 2006; Klein 2002; Easley and O'Hara 2004). Similarly our Australian data confirms that cost of debt is positively related to default and information risks. We show that increased corporate governance reduces default …

Multi-Perspective Performance Reporting And Organisational Performance: The Impact Of Information, Data And Redundant Cue Load, Errol Iselin, Lokman Mia, John Sands

Errol Iselin

Multi-perspective performance reporting systems (MPRS), such as the balanced scorecard (BSC), have become popular. The BSC reports performance about four perspectives (learning and growth, internal business processes, customer and financials). Although these systems are important, research in these areas has only just scratched the surface, hence the motivation for this study. A possible problem with multi-perspective systems is that they may cause information/data/redundant cue (I/D/C) overload and thus detrimentally affect the performance. The objectives of this research are to: (1) explore the relationship between MPRS and organisational performance and (2) study the relationship between I/D/C load and organisational performance in …

Continuous Improvement Systems, Balanced Scorecard Systems And Organisational Performance, Errol Iselin, John Sands, Lokman Mia

Errol Iselin

The use of multi-perspective performance reporting systems (MPRS), such as the balanced scorecard (BSC), is widespread. This study's motivation comes from the importance of these systems and the lack of knowledge about them. Continuous improvement systems (CIS) are another accounting innovation. CIS constantly look for ways to improve performance and are used in conjunction with performance reporting systems. The research objectives are to study MPRS users and to investigate: (1) the dimensions of multi-perspective performance reporting and organisational performance, and (2) the relationship between CIS and performance. We found 10 dimensions of performance reporting, 11 dimensions of performance, and that …

Audit Committee Characteristics And Firm Performance During The Global Financial Crisis, Husam Aldamen, Keith Duncan, Simone Kelly, Ray Mcnamara, Stephan Nagel

Simone Kelly

We address the question ‘do governance enhancing audit committee (AC) characteristics mitigate the firm performance impact of significant-adverse-economic events such as the Global Financial Crisis (GFC)?’ Our analysis reveals that smaller audit committees with more experience and financial expertise are more likely to be associated with positive firm performance in the market. We also find that longer serving chairs of audit committees negatively impacts accounting performance. However, accounting performance is positively impacted where ACs include blockholder representation, the chair of the board, whose members have more external directorships and whose chair has more years of managerial experience. We contribute to …

Financial Statement Fraud Detection And Possible Link To Company Failure, Adrian Gepp, Kuldeep Kumar, Sukanto Bhattacharya

Adrian Gepp

No abstract provided.

Attaining Legitimacy By Employee Information In Annual Reports, Pamela Kent, Tamara Zunker

Tamara Zunker

Purpose – The purpose of this study is to provide evidence on the category, quantity and quality of voluntary employee-related information Australian listed companies disclose in their annual report. An explanation is also sought to determine whether companies adopt employee-related disclosures to legitimise their relationship with society. Voluntary adoption of corporate governance best practice recommendations is used as a measure of companies’ attempts to attain ex ante legitimacy. Media agenda setting theory is used as a measure of an attempt to gain legitimacy ex post following adverse publicity from the media. Design/methodology/approach – The annual reports of all companies with …

Valuation Of Family Firms: The Limitations Of Accounting Information, Tim Hasso, Keith Duncan

Keith Duncan

This conceptual paper explores the extent to which reported accounting information captures unique family firm decision-making and intangible asset factors that impact financial value. We review the family firm valuation-relevant literature and identify that this body of research is predicated on the assumption that accounting information reflects the underlying reality of family firms. This research, however, fails to recognise that current accounting technology does not fully recognise the family firm factors in the book value of the firm or the implications for long-run persistence of earnings. Thus, valuation models underpinning the extant empirical research, which are predicated on reported accounting …

Corporate Governance, Risk Assessment And Cost Of Debt, Husam Aldamen, Keith Duncan, Ray Mcnamara

Keith Duncan

This paper examines the impact of corporate governance practices on the reported cost of contracted debt for Australian listed companies. Good governance decreases the variability in cash flows, reduces the probability of default (reduces default risk), increases the quality of value-relevant information disclosed (reduces the information risk) and thereby lowers the cost of debt (Ashbaugh-Skaife, Collins, and LaFond 2006; Sengupta 1998; Bhojraj and Sengupta 2003; Beekes and Brown 2006; Klein 2002; Easley and O'Hara 2004). Similarly our Australian data confirms that cost of debt is positively related to default and information risks. We show that increased corporate governance reduces default …

Do Corporate Governance Recommendations Improve The Performance And Accountability Of Small Listed Companies?, Jacqueline Christensen, Pamela Kent, James Routledge, Jenny Stewart

Pamela Kent

This study examines whether the implementation of the 2003 Australian Securities Exchange Limited governance recommendations influenced the governance choices of small companies and whether compliance improves their accounting and market performance and earnings quality. Our analysis examines small and large companies because we are interested in the different effects of the governance recommendations on the two groups. The analysis shows a significant shift by small and large companies to comply with the recommendations around the time of their introduction. We find that formation of an audit committee surrounding the reform period is significantly associated with improved earnings quality for small …

Attaining Legitimacy By Employee Information In Annual Reports, Pamela Kent, Tamara Zunker

Pamela Kent

Purpose – The purpose of this study is to provide evidence on the category, quantity and quality of voluntary employee-related information Australian listed companies disclose in their annual report. An explanation is also sought to determine whether companies adopt employee-related disclosures to legitimise their relationship with society. Voluntary adoption of corporate governance best practice recommendations is used as a measure of companies’ attempts to attain ex ante legitimacy. Media agenda setting theory is used as a measure of an attempt to gain legitimacy ex post following adverse publicity from the media. Design/methodology/approach – The annual reports of all companies with …

Do Corporate Governance Recommendations Improve The Performance And Accountability Of Small Listed Companies?, Jacqueline Christensen, Pamela Kent, James Routledge, Jenny Stewart

James Routledge

This study examines whether the implementation of the 2003 Australian Securities Exchange Limited governance recommendations influenced the governance choices of small companies and whether compliance improves their accounting and market performance and earnings quality. Our analysis examines small and large companies because we are interested in the different effects of the governance recommendations on the two groups. The analysis shows a significant shift by small and large companies to comply with the recommendations around the time of their introduction. We find that formation of an audit committee surrounding the reform period is significantly associated with improved earnings quality for small …

Insolvency Administration As A Strategic Response To Financial Distress, James Routledge, David Morrison

James Routledge

This study considers whether the strategic decision to enter voluntary administration (VA) rather than to trade the company’s business for a protracted period of declining performance is systematically related to the effective monitoring of management decision-making. Analysis that tests the association between strategic entry into VA and the likelihood that a company will reorganize in VA is also presented. We find about half of the companies in our sample entered VA as a strategic choice. The likelihood of strategic entry to VA increased with the proportion of independent board directors, the existence of an audit committee and a dual CEO/chair …

Financial Statement Fraud Detection And Possible Link To Company Failure, Adrian Gepp, Kuldeep Kumar, Sukanto Bhattacharya

Kuldeep Kumar

No abstract provided.

The Effect Of Regulation On Statement Disclosures In The 1915 Moody's Manuals, Jeffrey Archambault, Marie Archambault

Jeffrey Archambault

United States firms in the early 20th century were subject to public and private regulation. Forms of regulation included rate regulation and stock exchange listing requirements. These regulations created incentives to report income statement information. This study utilizes the 1915 Moody’s Analyses of Investments to test whether regulated firms in the United States reported more income statement information than unregulated firms. Rate regulation influenced utilities to report income statements more frequently than industrial companies.

Stock market listing requirements also influenced the reporting of income statements. Therefore, the results indicate that both public and private regulations influenced financial reporting in the …

Earnings Management Among Firms During The Pre-Sec Era: A Benford's Law Analysis, Jeffrey Archambault, Marie E. Archambault

Jeffrey Archambault

This paper examines the existence of financial statement manipulation in the U.S. during a time period when many of the current motivations did not exist. The study looks for types of manipulations that would be motivated by the pre-SEC operating environment. To examine this issue, a sample of U.S. firms from the 1915 Moody's Analyses of Investments is divided into industrial firms, railroads, and utilities. The railroad and utility companies faced rate regulatiori during this time period, providing incentives to manipulate the financial reports so as to maximize the rate received. Industrial firms were not regulated. These companies wanted to …

Financial Reporting In 1920: The Case Of Industrial Companies, Jeffrey Archambault, Marie Archambault

Jeffrey Archambault

This study uses the 1920 Moody’s Analysis of Industrial Investments to assess the extent of financial reporting by U.S. indus­trial companies. The reporting of an income statement and a balance sheet, as well as the amount of disclosure in both of these statements, is examined empirically to determine which economic factors influ­ence this reporting. The results show that corporate-governance, op­erating, and financing factors all significantly influence the reporting of financial statements and the extent of disclosure within those state­ments. However, the significant factors vary across the two financial statements and the two decisions considered (reporting a particular statement and the …

The Effect Of Regulation On Statement Disclosures In The 1915 Moody's Manuals, Jeffrey Archambault, Marie E. Archambault

Marie E. Archambault

United States firms in the early 20th century were subject to public and private regulation. Forms of regulation included rate regulation and stock exchange listing requirements. These regulations created incentives to report income statement information. This study utilizes the 1915 Moody’s Analyses of Investments to test whether regulated firms in the United States reported more income statement information than unregulated firms. Rate regulation influenced utilities to report income statements more frequently than industrial companies. Stock market listing requirements also influenced the reporting of income statements. Therefore, the results indicate that both public and private regulations influenced financial reporting in the …

Earnings Management Among Firms During The Pre-Sec Era: A Benford's Law Analysis, Jeffrey Archambault, Marie E. Archambault

Marie E. Archambault

This paper examines the existence of financial statement manipulation in the U.S. during a time period when many of the current motivations did not exist. The study looks for types of manipulations that would be motivated by the pre-SEC operating environment. To examine this issue, a sample of U.S. firms from the 1915 Moody's Analyses of Investments is divided into industrial firms, railroads, and utilities. The railroad and utility companies faced rate regulatiori during this time period, providing incentives to manipulate the financial reports so as to maximize the rate received. Industrial firms were not regulated. These companies wanted to …

Financial Reporting In 1920: The Case Of Industrial Companies, Jeffrey Archambault, Marie E. Archambault

Marie E. Archambault

This study uses the 1920 Moody’s Analysis of Industrial Investments to assess the extent of financial reporting by U.S. indus­trial companies. The reporting of an income statement and a balance sheet, as well as the amount of disclosure in both of these statements, is examined empirically to determine which economic factors influ­ence this reporting. The results show that corporate-governance, op­erating, and financing factors all significantly influence the reporting of financial statements and the extent of disclosure within those state­ments. However, the significant factors vary across the two financial statements and the two decisions considered (reporting a particular statement and the …

Social Networking Information Disclosure And Continuance Intention: A Disconnect, D. Mcknight, Nancy Lankton, John Tripp

Nancy K. Lankton

This paper tests a privacy calculus model for Facebook users. Privacy calculus means that individuals weigh a complex set of factors—including both costs and benefits—to decide whether to disclose personal information. Because information disclosure is closely related to use for many information technologies (IT), our privacy calculus model proposes that costs and benefits of user privacy will simultaneously influence users’ information disclosure and usage continuance intention. Based on past research, our model includes as ‘costs’ privacy concern and information sensitivity, while it includes as ‘benefits’ perceived usefulness, enjoyment, and trust. In a sample of business college students’ use of a …

Governing A Digital Business Ecosystem: Lessons From One.Motoring Portal, Gary Pan, See Liang Foo, Shongye Tan

Gary PAN

While the IT innovation topic has gathered significant research interests, the existing discourse on IT innovation is centered on internal organizational processes such as IT capability development and organizational learning rather than IT innovation networks as the primary means for achieving superior enterprise performance. This is an important topic because a networked perspective of IT-enabled innovation is a critical dimension for the dynamics of collaborative innovation in today’s networked economy. In particular, the development and implementation of a digital business ecosystem (DBE); a specific type of business ecosystem defined as an IT-enabled business network of entities with differing interests bound …

How Can Financial Reporting Standards Resist Accounting-Motived Financial Engineering?, Shyam Sunder

Shyam Sunder

No abstract provided.