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Full-Text Articles in Accounting

Internal Control: The Human Risk Factor, Annetta M. Gibson May 2017

Internal Control: The Human Risk Factor, Annetta M. Gibson

Faculty Publications

Presentation for the SPD new CFO orientation program, May 15, 2017


Academic Accounting Salaries In The Southwest: A Revisitation And Exploration, Kelly Noe, Mary Fischer, Treba Marsh, Dana A. Forgione Jan 2017

Academic Accounting Salaries In The Southwest: A Revisitation And Exploration, Kelly Noe, Mary Fischer, Treba Marsh, Dana A. Forgione

Faculty Publications

This study examines the faculty located in the Southwest Region of the American Accounting Association to ascertain salary determinants as well explore salary compression and inversion. This study finds there are differences among faculty salaries based on longevity, institutional type and size. Typically larger, public institutions pay higher salaries. Further this study finds that salary, perceived salary compared to others, institutional longevity, marital status, institutional type and size are significantly associated with faculty’s gender.


Lumberjack Construction: Job-Order Costing & Manufacturing Simulation, Marie Kelly, Nikki Shoemaker Jan 2017

Lumberjack Construction: Job-Order Costing & Manufacturing Simulation, Marie Kelly, Nikki Shoemaker

Faculty Publications

This paper describes a classroom Job-Order Costing and manufacturing simulation called Lumberjack Construction. This simulation is used in introductory managerial accounting and cost accounting courses to help students understand the various parts of the manufacturing process and the application of Job-Order Costing principles. For this simulation, students are placed into manufacturing groups. Each group is responsible for manufacturing a building and calculating the cost of that building using job-order costing.


The Effects Of Gamification On Corporate Compliance Training: A Field Experiment Of True Office Anti-Corruption Training Programs, Ryan J. Baxter, D. Kip Holderness, David A. Wood Jan 2017

The Effects Of Gamification On Corporate Compliance Training: A Field Experiment Of True Office Anti-Corruption Training Programs, Ryan J. Baxter, D. Kip Holderness, David A. Wood

Faculty Publications

Companies rely on internal controls to comply with the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act. One such control is anti-corruption employee training. Although corporate training is a key component of anti-fraud policies and procedures, it is often perceived as dull by employees. To motivate greater engagement, firms are experimenting with training that involves elements of digital games, known as gamification. We perform a field experiment with 158 employees of a large, multinational bank to examine the effectiveness of gamified anticorruption training. We find that employees strongly prefer gamified training to traditional, nongamified training and that gamified …


The Impact Of Shadow It Systems On Perceived Information Credibility And Managerial Decision Making, Noah Myers, Matthew Starliper, Scott L. Summers, David A. Wood Jan 2017

The Impact Of Shadow It Systems On Perceived Information Credibility And Managerial Decision Making, Noah Myers, Matthew Starliper, Scott L. Summers, David A. Wood

Faculty Publications

Business trends show that more and more employees are creating shadow IT systems—IT systems that are not sanctioned or monitored by the IT department. This paper examines how the use of shadow IT in product costing impacts managers’ perceptions of information credibility and managerial decision-making. Using two experiments, we find that participants view information from shadow IT systems as less credible and they are less impacted by and less willing to rely on costing reports produced from shadow IT systems versus non-shadow IT systems. We also find that although participants are concerned about the credibility of shadow IT systems, they …


The Internet As An Information Intermediary, Michael S. Drake, Jacob Thornock, Brady J. Twedt Jan 2017

The Internet As An Information Intermediary, Michael S. Drake, Jacob Thornock, Brady J. Twedt

Faculty Publications

The internet is an enormous and growing source of information for investors about the opinions of others. Virtually any individual with internet access can express opinions about firms and editorialize about company news. However, to date we know very little about the impact these nontraditional internet intermediaries have on markets. We develop a framework wherein internet information intermediaries fall along a spectrum of professionalism and document a nuanced relationship between coverage by these intermediaries and capital market effects. Using a novel dataset that tracks coverage of companies by individuals posting on thousands of websites, we find that coverage by professional …


The Effect Of Industry Co-Location On Analysts’ Information Acquisition Costs, Jared Jennings, Joshua A. Lee, Dawn Matsumoto Jan 2017

The Effect Of Industry Co-Location On Analysts’ Information Acquisition Costs, Jared Jennings, Joshua A. Lee, Dawn Matsumoto

Faculty Publications

We examine how the co-location of firms in the same industry affects analysts’ cost of gathering and processing information. We find that when the firms in an analyst’s portfolio are located farther away from other firms in the same industry, the analyst’s portfolio size is smaller and average forecast accuracy is lower. We further find that the additional costs that analysts incur to follow distant firms are amplified when earnings are more difficult to forecast. Lastly, we provide some evidence that managers are more knowledgeable about other firms in the same geographic area. Specifically, managers are more likely to reference …


How Does Intentional Earnings Smoothing Vary With Managerial Ability?, Peter Demerjian, Melissa F. Lewis-Western, Sarah Mcvay Jan 2017

How Does Intentional Earnings Smoothing Vary With Managerial Ability?, Peter Demerjian, Melissa F. Lewis-Western, Sarah Mcvay

Faculty Publications

We investigate if high-ability managers are more likely to intentionally smooth earnings, a form of earnings management, and when they are more likely to do so. Although prior studies provide evidence that high-ability managers report higher quality earnings, the literature does not indicate whether this behavior is common because of (or happens in spite of) high-ability managers’ intentional smoothing activities. We find that (1) high-ability managers are significantly more likely to engage in intentional smoothing, (2) their intentional smoothing is associated with improved future operating performance, and (3) their intentional smoothing is more prevalent when the smoothing either benefits shareholders, …


Auditors’ Response To Assessments Of High Control Risk: Further Insights*, Timothy Seidel Jan 2017

Auditors’ Response To Assessments Of High Control Risk: Further Insights*, Timothy Seidel

Faculty Publications

Auditing standards prescribe a risk-based approach where auditors assess the risk of material misstatement and then design and perform audit procedures to reduce audit risk to an appropriately low level. Prior research suggests that auditors are responsive to high control-risk assessment (CRA), but that this response is, perhaps, only partially effective at reducing audit risk, with relatively little insight into where and why this occurs. By refining analyses to more detailed levels of the audit, I extend this research by providing further insight into auditors’ response to high CRA. I examine and find that audit fees are significantly higher for …


Irs Attention, Zahn Bozanic, Jeffrey L. Hoopes, Jacob Thornock, Braden M. Williams Jan 2017

Irs Attention, Zahn Bozanic, Jeffrey L. Hoopes, Jacob Thornock, Braden M. Williams

Faculty Publications

We study how public and private disclosure requirements interact to influence both tax regulator enforcement and firm disclosure. To capture IRS enforcement activities, we introduce a novel data set of IRS acquisition of firms’ public financial disclosures, which we label IRS attention. We examine the implementation of two new disclosure requirements that potentially alter IRS attention: FIN 48, which increased public tax disclosure requirements, and Schedule UTP, which increased private tax disclosure. We find that IRS attention increased following FIN 48 but subsequently decreased following Schedule UTP, consistent with public and private disclosure interacting to influence tax enforcement. We next …


The Consequences Of Audit-Related Earnings Revisions, Jacob Z. Haislip, Linda A. Myers, Susan Scholz, Timothy Seidel Jan 2017

The Consequences Of Audit-Related Earnings Revisions, Jacob Z. Haislip, Linda A. Myers, Susan Scholz, Timothy Seidel

Faculty Publications

In this paper, we investigate the consequences that auditors and their clients face when earnings announced in an unaudited earnings release are subsequently revised, presumably as a result of year-end audit procedures, so that earnings as reported in the 10-K differ from earnings as previously announced. Specifically, we examine whether the likelihood of an auditor ‘losing the client’ is greater following such revisions, and whether the likelihood of dismissal is influenced by revisions that more negatively impact earnings, that cause the client to miss important earnings benchmarks, by greater local auditor competition, or by auditor characteristics. We also examine audit …


An Examination Of Firms’ Responses To Tax Forgiveness, Terry Shevlin, Jacob Thornock, Braden Williams Jan 2017

An Examination Of Firms’ Responses To Tax Forgiveness, Terry Shevlin, Jacob Thornock, Braden Williams

Faculty Publications

This study uses state tax amnesties to examine how firms respond to forgiveness—particularly repeated forgiveness—by a taxing authority. We posit that tax forgiveness programs alter taxpayer perceptions of the probability of detection by enforcers or the probability of future forgiveness programs, either of which could affect future tax aggressiveness. We find that firms headquartered in an amnesty-granting state increase state income tax aggressiveness following the first instance of tax amnesty, relative to control firms in other states. Moreover, we find evidence that tax aggressiveness incrementally increases with each additional repetition of a tax amnesty. Finally, we find that the effect …


An Evaluation Of The General Vs. Specialist Nature Of Top Accounting Journals, Scott L. Summers, David A. Wood Jan 2017

An Evaluation Of The General Vs. Specialist Nature Of Top Accounting Journals, Scott L. Summers, David A. Wood

Faculty Publications

Academic research has a role in advancing and enlightening society in broad areas of study. Many forces interact to influence the directions, topics, and methodologies used in research. In this paper, we explore and discuss the relationships between the top general-interest and specialist accounting journals. We test whether top journals (e.g., “Top 3” or “Top 6”), relative to a set of high-quality but specialist journals, (1) are perceived to be general in what they will consider publishing, (2) have historically published diverse sets of articles, (3) have editorial board members with diverse sets of interests and skills, and (4) publish …


Discussion Of 10-K Disclosure Repetition And Managerial Reporting Incentives What Have We Learned And Where Do We Go With Textual Research?, Travis Dyer, Mark H. Lang, Lorien Stice-Lawrence Jan 2017

Discussion Of 10-K Disclosure Repetition And Managerial Reporting Incentives What Have We Learned And Where Do We Go With Textual Research?, Travis Dyer, Mark H. Lang, Lorien Stice-Lawrence

Faculty Publications

We discuss the evolution of research on textual attributes in accounting and suggest potential directions for future research using Cazier and Pfeiffer (2017) to illustrate the challenges and opportunities in the literature. We categorize the literature based on whether a given textual attribute is assumed to be ‘‘discretionary’’ versus ‘‘nondiscretionary’’ and whether it is assumed to be ‘‘helpful’’ versus ‘‘harmful.’’ The literature to date has been largely descriptive, with limited focus on causality, and we argue that there are substantial opportunities for research that better isolate the discretionary components of textual disclosure, as well as identifying specific contexts in which …


The Evolution Of 10-K Textual Disclosure: Evidence From Latent Dirichlet Allocation, Travis Dyer, Mark Lang, Lorien Stice-Lawrence Jan 2017

The Evolution Of 10-K Textual Disclosure: Evidence From Latent Dirichlet Allocation, Travis Dyer, Mark Lang, Lorien Stice-Lawrence

Faculty Publications

We document marked trends in 10-K disclosure over the period 1996–2013, with increases in length, boilerplate, stickiness, and redundancy and decreases in specificity, readability, and the relative amount of hard information. We use Latent Dirichlet Allocation (LDA) to examine specific topics and find that new FASB and SEC requirements explain most of the increase in length and that 3 of the 150 topics—fair value, internal controls, and risk factor disclosures—account for virtually all of the increase. These three disclosures also play a major role in explaining the trends in the remaining textual characteristics.


Factors Influencing Recruitment Of Non-Accounting Business Professionals Into Internal Auditing, Geoffrey D. Bartlett, Joleen Kremin, K. Kelli Saunders, David A. Wood Jan 2017

Factors Influencing Recruitment Of Non-Accounting Business Professionals Into Internal Auditing, Geoffrey D. Bartlett, Joleen Kremin, K. Kelli Saunders, David A. Wood

Faculty Publications

This paper examines factors affecting non-accounting business professionals’ willingness to work in internal auditing. In a 2 x 6 experiment with 502 participants from across the country, we find that, in contrast to prior research examining accountants, business professionals have relatively favorable views of internal audit. Although they hold favorable views, participants were still less likely to apply for a position labeled as internal audit than an identical position with an alternate label. Varying the structure of internal audit, including job responsibilities, career path, and sourcing arrangement, did not affect participants’ willingness to apply for an internal audit position. We …


Changes In Corporate Effective Tax Rates Over The Past 25 Years, Scott D. Dyreng, Michelle Hanlon, Edward L. Maydew, Jacob Thornock Jan 2017

Changes In Corporate Effective Tax Rates Over The Past 25 Years, Scott D. Dyreng, Michelle Hanlon, Edward L. Maydew, Jacob Thornock

Faculty Publications

We investigate systematic changes in corporate effective tax rates over the past 25 years and find that effective tax rates have decreased significantly. Contrary to conventional wis- dom, the decline in effective tax rates is not concentrated in multinational firms; effective tax rates have declined at approximately the same rate for both multinational and domes- tic firms. Moreover, within multinational firms, both foreign and domestic effective rates have decreased. Finally, changes in firm characteristics and declining foreign statutory tax rates explain little of the overall decrease in effective rates.


Internal Control: It's More Than A Locked Safe, Annetta M. Gibson Mar 2016

Internal Control: It's More Than A Locked Safe, Annetta M. Gibson

Faculty Publications

Presentation for the NAD orientation for new treasurers, March 30, 2016


Reading And Interpreting A Financial Statement, Annetta M. Gibson Mar 2016

Reading And Interpreting A Financial Statement, Annetta M. Gibson

Faculty Publications

Presentation for Treasurers, North American Division, March 29, 2016


Accounting Information Systems: A View From The Public Eye, Rachelle Paige Miller, Esther Bunn, Kelly Noe Jan 2016

Accounting Information Systems: A View From The Public Eye, Rachelle Paige Miller, Esther Bunn, Kelly Noe

Faculty Publications

In order to fully appreciate the potential impact accounting information systems have on the accounting profession, an understanding of what accounting encompasses is necessary. Over the years, accounting has evolved from what many would call a “checks and balance” system to a much more complex system involving complicated activities such as calculating taxes and garnishments, auditing financial statements and processing payroll to name a few. It would be reasonable to think that advanced technology such as accounting information systems would only enhance the production of these activities. However, like with any “game changers,” there are always potential threats involved. The …


Using Option Theory To Determine Optimal Ira Investment, Treba Marsh, Todd A. Brown, Mary Fischer Jan 2016

Using Option Theory To Determine Optimal Ira Investment, Treba Marsh, Todd A. Brown, Mary Fischer

Faculty Publications

Given the current uncertain economic trends, the decision to contribute to a personal retirement account can be a financial challenge taking a great deal of courage. Using the option theory, this paper presents arguments to justify the optimal contribution to maximize an IRA investment return.


Rodeo In The Classroom: Activity Based Costing Simulation, Nikki Shoemaker, Marie Kelly Jan 2016

Rodeo In The Classroom: Activity Based Costing Simulation, Nikki Shoemaker, Marie Kelly

Faculty Publications

This paper describes a classroom Activity Based Costing simulation called Rodeo in the Classroom. This simulation has been used in several introductory managerial accounting and cost accounting courses in order to help students understand the difference in the application of overhead between Job Order Costing and Activity Based Costing methods. Each student is assigned their own rodeo simulation and must calculate its cost using specific cost drivers. To verify their calculations, students with the same rodeos are grouped together to compare costs. Final rodeo costs are presented to the class where differences in cost allocations and reasons for these differences …


Using Unstructured And Qualitative Disclosures To Explain Accruals, Richard Frankel, Jared Jennings, Joshua A. Lee Jan 2016

Using Unstructured And Qualitative Disclosures To Explain Accruals, Richard Frankel, Jared Jennings, Joshua A. Lee

Faculty Publications

We examine the usefulness of support vector regressions (SVRs) in assessing the content of unstructured, qualitative disclosures by relating MD&A-based SVR-accrual estimates (MD&Aaccruals) to actual accruals. We find that MD&A accruals explain a statistically and economically significant portion of firm-level accruals and identify more persistent accruals. We find that the explanatory power of MD&A accruals is higher for more readable 10Ks, thereby providing evidence for the construct validity of the readability measures. To highlight the flexibility of the SVR method, we apply it to other dependent variables and disclosures. We find that MD&A-based cash-flow forecasts produced by SVR predict next …


Does Use Tax Evasion Provide A Competitive Advantage To E-Tailers?, Jeffrey L. Hoopes, Jacob Thornock, Braden M. Williams Jan 2016

Does Use Tax Evasion Provide A Competitive Advantage To E-Tailers?, Jeffrey L. Hoopes, Jacob Thornock, Braden M. Williams

Faculty Publications

Many online retail firms (e-tailers) do not collect sales tax from the majority of their customers. This practice provides these firms with a potential competitive advantage over traditional retailers. We examine stock market returns and analysts' sales forecast revisions surrounding federal legislative proposals, such as the Marketplace Fairness Act, that could erode this alleged competitive advantage for e-tailers. Following events that indicated an increased likelihood of federal sales tax legislation, we find negative abnormal stock returns for e-tail firms relative to traditional retail firms. We also find that analysts forecast a future reduction in sales revenue for e-tailers. These findings …


Understanding Audit Quality: Insights From Audit Professionals And Investors*, Brant E. Christensen, Steven M. Glover, Thomas C. Omer, Marjorie K. Shelley Jan 2016

Understanding Audit Quality: Insights From Audit Professionals And Investors*, Brant E. Christensen, Steven M. Glover, Thomas C. Omer, Marjorie K. Shelley

Faculty Publications

Projects seeking to define, measure, and evaluate audit quality are on the agendas of auditing standards setters as well as audit firms. The Public Company Accounting Oversight Board (PCAOB) currently provides information regarding audit quality through the release of inspection reports, and the Board intends to establish and report audit quality indicators. To provide additional perspective on audit quality, we obtain auditors’ and investors’ views, definitions, and indicators of audit quality. We find that investors’ definitions of audit quality focus more on inputs to the audit process than do auditors’, and that investors view the number of PCAOB deficiencies as …


Comparing The Publication Process In Accounting, Economics, Finance, Management, Marketing, Psychology, And The Natural Sciences, David A. Wood Jan 2016

Comparing The Publication Process In Accounting, Economics, Finance, Management, Marketing, Psychology, And The Natural Sciences, David A. Wood

Faculty Publications

I present two types of data about the publication and review process in the accounting, economics, finance, management, marketing, psychology, and natural science disciplines. First, I collect all articles published in 2012 in top tier journals of these disciplines and compare the articles based on word counts, figures and tables included in each article, the time it took to be published, citations, the number of co-authors, and submission fees. I then survey academics in each discipline. Survey questions were designed to evaluate overall perceptions of the review process; changes in the review process in the last 5 years; opinions about …


Compensation Or Feedback: Motivating Performance In Multidimensional Tasks, Margaret H. Christ, Scott A. Emett, William B. Tayler, David A. Wood Jan 2016

Compensation Or Feedback: Motivating Performance In Multidimensional Tasks, Margaret H. Christ, Scott A. Emett, William B. Tayler, David A. Wood

Faculty Publications

Employees often perform tasks with multiple dimensions. In this study, we examine how employees' performance on multidimensional tasks differs under different control structures. We conduct two experiments in which we manipulate the presence of compensation controls and the presence of feedback controls on multiple task dimensions. Our findings suggest that when employees are compensated on multiple dimensions they commit to multiple goals and divide their attention among those task dimensions. However, when feedback controls are implemented on one task dimension with compensation controls on another dimension, employees can improve performance on individual dimensions as well as their overall task performance. …


Applying Basic Gamification Techniques To It Compliance Training: Evidence From The Lab And Field, Ryan J. Baxter, D. Kip Holderness, David A. Wood Jan 2016

Applying Basic Gamification Techniques To It Compliance Training: Evidence From The Lab And Field, Ryan J. Baxter, D. Kip Holderness, David A. Wood

Faculty Publications

Companies depend on strong internal controls to protect the integrity of accounting information systems. IT security and data privacy training are critical controls to safeguarding company information. However, employees often dislike the training, which can cause a lack of attention to and poor understanding of training concepts, leading to less effective internal controls. To improve the training experience, companies are implementing principles of games into employee training modules; a practice known as gamification. Using a laboratory experiment of data privacy training and a field study involving a publicly-traded bank’s rollout of IT security training, we test whether a training environment …


Do Managers Really Guide Through The Fog? On The Challenges In Assessing The Causes Of Voluntary Disclosure, Travis Dyer, Mark Lang, Lorien Stice-Lawrence Jan 2016

Do Managers Really Guide Through The Fog? On The Challenges In Assessing The Causes Of Voluntary Disclosure, Travis Dyer, Mark Lang, Lorien Stice-Lawrence

Faculty Publications

Guay e tal. (2016) document that firms with longer and more complex 10-Ks provide  relatively more voluntary disclosure, which they interpret as evidence that managers use voluntary disclosure to mitigate negative effects of complex mandatory disclosure. We review the results of Guay et al. and focus on two main challenges to inferring causality: (1) the coincidence of upward over-time trends in annual report length, complexity, and voluntary disclosure, and (2) the potential for omitted correlated variables, such as changes in firm economics, to drive changes in 10-K textual characteristics and voluntary disclosure. While the results in Guay et al. are …


How Do Firms Use Cash Tax Savings: A Cross-Country Analysis, Danielle Higgins Green, Jon Kerr Jan 2016

How Do Firms Use Cash Tax Savings: A Cross-Country Analysis, Danielle Higgins Green, Jon Kerr

Faculty Publications

Cash tax avoidance activities can serves as a significant source of additional cash flows for firms; how managers utilize this additional cash source and the resulting consequences is an empirical question. To answer our research question, we examine the association between the spread between a country’s enacted statutory rate for the year and the cash effective tax rate, and two uses of cash – investment and dividend payout – for an international sample of firms. In the cross-section, we find the firms are more likely to invest cash tax savings rather than distribute them in the form of dividends and …