Accounting Commons^™

Auditor Concentration Of Listed Public Companies On International Stock Exchanges, Ramesh Narasimhan, Shifei Chung

Department of Accounting and Finance Faculty Scholarship and Creative Works

This paper explores the concentration of audit services provided to listed public companies on the Stock Exchanges of Canada, Hong Kong, London, and Singapore. The Canadian and London stock exchanges are chosen as representatives of the North American and European markets, while the Hong Kong and Singapore exchanges represent the newly developed Asia Pacific markets. Public accounting firms have benefited from the globalisation trends by expanding their own markets. The reason frequently mentioned for the mergers of the Big 8 accounting firms to form the Big 6 is that they want to increase their international presence and be in a …

Measuring The Degree Of International Harmony In Selected Accounting Measurement Practices, Emmanuel N. Emenyonu, Ajay Adhikari

WCBT Faculty Publications

The I-index developed by Van der Tas and chi square tests suggested by Tay and Parker are used to quantify and assess the degree of harmony in selected accounting measurement practices of large companies from France, Germany, Japan, the UK, and the US. The results indicate significant differences in accounting for inventory, fixed assets, and investments among the countries. The 3 sub-topics that exhibited a high degree of harmony were the treatment of gains or losses on the disposal of fixed assets, short-term investments and long-term investments, a reflection of the preference of regulators and companies in the different countries …

Going-Concern Audit Report Recipients Before And After Sas No. 59, Marshall A. Geiger, Kannan Raghunandan, D. V. Rama

Accounting Faculty Publications

In an attempt to provide information to make an evaluation on whether the requirements under SAS No. 59 have had any significant effect on auditor reporting decisions, a study was conducted that examined companies receiving going-concern modified reports before and after the implementation of SAS No. 59. We wanted to assess whether auditors were issuing going-concern modified reports to clients exhibiting different levels of financial stress and also whether the bankruptcy rate of such companies was different after the adoption of SAS No. 59.

Valuation Analysis Of Environmental Disclosures, Kathryn Lancaster

Accounting

No abstract provided.

A Note On Going-Concern Modified Audit Reports And Subsequent Bankruptcies Before And After Sas No. 59, Marshall A. Geiger, Kannan Raghunandan, Dasaratha V. Rama

Accounting Faculty Publications

Several papers have examined the proportion of bankrupt companies which did not have a prior going-concern modified report (a type II reporting error) before and after Statement on Auditing Standards No. 59 became effective. This paper contributes to the debate by examining the subsequent viability status for companies that received a first-time going-concern modified audit report (type I reporting errors) before and after SAS No. 59. The results indicate that 13.6 (10.1) percent and 24.3 (20.2) percent of companies receiving a first-time going concern modified audit report in the post-SAS No. 59 (pre-SAS No. 59) period entered bankruptcy within one …

Towards Relevancy In Financial Reporting: Mark-To-Market Accounting, Eunsup Daniel Shim, Joseph M. Larkin

WCBT Faculty Publications

The objectives of this paper are to: discuss the relevancy vs. reliability of current financial reporting practices, survey the literature that describes the impact of mark-to-market accounting, critically examine current GAAP financial statements by comparing them to market value financial statements. With theoretical discussions and a case study, this paper shows that the mark-to-market accounting could present better about the economic reality of transactions and, therefore, tends to provide more useful and relevant information than does historical cost financial reporting. This study suggests that if the objective of financial reporting is to provide "useful" information to the users, existing GAAP …

Qualitative Materiality In Government Audit Planning, Sridhar Ramamoorti, Andrea Lee Hoey

Accounting Faculty Publications

The political sensitivity of the area under audit to adverse media exposure and litigation concerns the nature rather than the size of an amount, such as illegal acts, bribery and corruption, related party transactions, snowballing patterns of error and other risks that grow over time. Qualitative materiality considerations should not be ignored-they can and frequently do influence the nature and scope of governmental audits. Financial Accounting Standards Board Concepts Statement No. 2 defines materiality as the magnitude of an omission or misstatement that would influence the decisions of a user of financial statements. Audit planning needs to incorporate considerations of …

Underreporting Chargeable Time: A Continuing Problem For Public Accounting Firms, Michael D. Akers, Charles T. Horngren, Tim V. Eaton

Accounting Faculty Research and Publications

Prior research shows that underreporting chargeable time has been a concern for public accounting firms even though many of these firms have policies and procedures that prohibit "eating" time. The purpose of this study is to examine the current state of this problem and to provide recommendations to manage the problem more effectively. Practicing public accountants at all professional levels were surveyed to determine the extent, opportunity, ethical perception and perceived benefits of underreporting time. The results show that although the majority of the respondents believe underreporting time is unethical, the majority of them did not report all of their …

Implementing Activity-Based Costing And Its Implications For A Service Firm In The Tme Share Exchange Industry, Sakthi Mahenthiran, Bruce D. Marshall

Scholarship and Professional Work - Business

This study reports on how an activity-based cost accounting (ABC) system was implemented in a service firm in the timeshare exchange industry. In addition, the study highlights the similarities of implementing ABC in a service firm and a manufacturing firm. An important contribution of this field study is to illustrate the separation of labor activities into those that are productive versus those that are not. Further, the study shows the importance of separately allocating the non-productive activities, which are traceable to the primary service lines from those that are not traceable to them. This is analogous to separating the product …

Assessing Higher-Level Thinking Skills, Federation Schools Of Accountancy Accounting Pedagogical Resource Series, C. Johnson, C. Baril, Sakthi Mahenthiran, M. Sarhan, G. Weinstein

Scholarship and Professional Work - Business

This resource catalog is one of a series prepared for the Pedagogical Resources Committee of the Federation of Schools of Accountancy. The aim of the resource catalog series is to provide background information for instructors interested in enhancing classroom pedagogy. Each resource catalog focuses on a single pedagogical issue or approach. The catalogs are authored by educators who are familiar with the issue or approach in both their classroom efforts and research writings.

1997-1998 Financial Summary, Morehead State University. Budget & Financial Planning Office.

Morehead State University Financial Summaries Archive

1997-1998 Financial Summary of Morehead State University.

Actuarial Techniques In Risk Pricing And Cash Flow Analysis For U.K. Bank Loans, Philip Booth, Duncan E.P. Walsh

Journal of Actuarial Practice (1993-2006)

A cash flow model is developed to set the price for a loan to a borrower with known risks. Similarities are noted between this model and those used for profit testing in life insurance. We emphasize aspects that reasonably can be treated in several ways and also indicate where the cash flow model differs from the pricing methods usually employed in bank lending. The sensitivity of interest rates to various parameters of the model such as the length of loan and the expected default rate is examined. Also, we examine how features of loans, including cash back and early repayments, …

Outlier Analysis Of Annual Retail Price Inflation: A Cross-Country Study, Wai-Sum Chan

Journal of Actuarial Practice (1993-2006)

Wilkie's stochastic investment model and its variants have been increasingly applied by actuaries around the world to actuarial modeling and simulation. This paper performs time series outlier analysis on retail price inflation, which is the driving force of Wilkie's composite model. The data come from four developed countries: the United Kingdom, the United States, Canada, and Australia. The fit of the model is significantly improved after the adjustment of outliers. The analysis also identifies exogenous events that have intervened in the inflation dynamics. An example is given to demonstrate the importance of outlier analysis on stochastic simulation. Finally, inflation trends …

Stability Of Representative Crediting Rate Scenarios Under Monte Carlo Simulations, Sarah L.M. Christiansen, Kelley Buchacker

Journal of Actuarial Practice (1993-2006)

We develop a methodology to ensure that a Monte Carlo simulation of the distribution of the primary rates, used for determining an interest crediting rate, is stable regardless of the initial random number seed. We consider the implications of the use of antithetic random normal deviates upon the scenario process and modifications to the candidate list and the choice function within the representative process. It is shown that the use of antithetic random deviates alone does not have a statistically significant effect on our results. The other two modifications (candidate selection algorithm and choice function) are statistically significant. Furthermore, the …

Principles And Application Of Credibility Theory, Vincent Goulet

Journal of Actuarial Practice (1993-2006)

We review the history of the practical development of credibility theory. Emphasis is placed on the two main approaches to credibility theory: limited fluctuation credibility and greatest accuracy credibility. We explain when each approach should and should not be used. The presentation of greatest accuracy credibility theory starts with a review of (exact) Bayesian credibility and then moves to the Buhlmann-Straub model. Estimators of the structure parameters are discussed. Examples are presented to illustrate the concepts. Finally, the hierarchical credibility and crossed classification credibility models are presented.

Using Analysts’ Forecasts To Measure Properties Of Analysts’ Information Environment, Orie E. Barron, Oliver Kim, Steve C. Lim, Douglas E. Stevens

Accountancy Faculty Publications

This paper presents a model that relates properties of the analysts' information environment to the properties of their forecasts. First, we express forecast dispersion and error in the mean forecast in terms of analyst uncertainty and consensus (that is, the degree to which analysts share a common belief). Second, we reverse the relations to show how uncertainty and consensus can be measured by combining forecast dispersion, error in the mean forecast, and the number of forecasts. Third, we show that the quality of common and private information available to analysts can be measured using these same observable variables. The relations …

The Effects Of Counterexplanation And Audit Groups On Fraud Detection, Janne Chung, Gary S. Monroe

Research outputs pre 2011

Prior studies have found that auditors' fraud detection rates are relatively low (Bernardi 1994; Pincus 1991 ). The present study examines whether counterexplaining inaccurate judgments will increase fraud detection rates and whether audit groups can counterexplain more effectively compared to individual auditors. The possible negative effect of counterexplanation is examined by requiring audit groups and individual auditors to counterexplain accurate judgments. The purpose of this 'inanipulatiori is to determine whether counterexplaining accurate judgments will lead to negative belief revision, and whether this negative belief revision will be mitigated by the use of audit groups. A 2 x 2 x 2 …

Journal Of Actuarial Practice, Volume 6, Nos. 1 And 2, 1998, Colin Ramsay , Editor

Journal of Actuarial Practice (1993-2006)

ARTICLES

Principles and Application of Credibility • Vincent Goulet

Actuarial Techniques in Risk Pricing and Cash Flow Analysis for U.K. Bank Loans • Philip Booth and Duncan E.P. Walsh

Stability of Representative Crediting Rate Scenarios Under Monte Carlo Simulations • Sarah L.M. Christiansen and Kelley Buchacker

Outlier Analysis of Annual Retail Price Inflation: A Cross-Country Study • Wai-Sum Cha

An Analysis of Australian Pensioner Mortality by Pre-Retirement Income • David Knox and Andrew Tomlin

Using Parametric Statistical Models to Estimate Mortality Structure: The Case of Taiwan • Shih-Chieh Chang

A Frailty Model for Projection of Human Mortality Improvements • Shaun …

An Analysis Of Australian Pensioner Mortality By Pre-Retirement Income, David Knox, Andrew Tomlin

Journal of Actuarial Practice (1993-2006)

The existence of a relationship between an individual's socioeconomic status and his or her mortality is often accepted, but it is difficult to measure this relationship objectively. This study analyses the relationship between an individual's final salary immediately prior to retirement and mortality rates during retirement. The data used are taken from a large Australian public sector pension plan. A strong inverse relationship is found, which decreases with age. Some of the implications of these results for individual annuity markets and public pension policy are discussed.

A Frailty Model For Projection Of Human Mortality Improvements, Shaun S. Wang, Robert L. Brown

Journal of Actuarial Practice (1993-2006)

Based on the everyday observations that individual human beings vary significantly in their capacity to combat death, we adopt a so-called frailty model of human mortality. This frailty model assumes that each individual in a given population is endowed with his or her own frailty index, r, which remains constant for life. In addition, we assume that the individual's force of mortality (hazard rate function) at age x, Ux(r), satisfies Ux(r) = rUx where Ux is the population's base force of mortality at age x. Given the probability distribution of the frailty index among the newborns in the population, an …

Using Parametric Statistical Models To Estimate Mortality Structure: The Case Of Taiwan, Shih-Chieh Chang

Journal of Actuarial Practice (1993-2006)

A mixture parametric model is used to analyze the changing pattern of Taiwanese mortality from 1926 to 1991. Three different age ranges are modeled as mixtures of extreme value distributions, namely the Weibull, inverse Weibull, and Gompertz distributions. The results show a significant improvement of mortality over the years.

The Effects Of Gender And Task Complexity On Audit Judgment, Janne Chung, Gary S. Monroe

Research outputs pre 2011

This study examines the interaction effect between gender and task complexity on audit judgment based on the selectivity hypothesis. This hypothesis states that males are selective information processors whereas females are detailed information processors. The study extends this hypothesis to an auditing context and hypothesizes that males will outperform females when task complexity is low while females will outperform males when task complexity is high. A two (males and females) by two (task complexity - high and low) full factorial experiment was carried out. The low and high task complexity conditions were created by manipulating the number of cues. The …

The Interactive Effects Of Different Accounting Controls On Subordinates' Behaviour And Performance, Chong M. Lau

Research outputs pre 2011

Prior research suggests that goal setting and an emphasis en meeting tight budget targets may influence the extent of subordinates' performance and slack creation. This study hypothesizes that other accounting controls may moderate these relationships. Specifically, it hypothesizes that: (i) budgetary performance is increased and (ii) budgetary slack creation is decreased when an emphasis on setting and meeting tight budget targets is complemented with a high extent of cost control. The results support a significant two-way interaction between Emphasis on setting and meeting tight budget targets and Cost control affecting budgetary performance. A significant two-way interaction between Emphasis en setting …

1998-1999 Operating Budget, Morehead State University. Budget & Financial Planning Office.

Morehead State University Operating Budgets Archive

1998-1999 Operating Budget of Morehead State University.

Business Process Change And The Role Of The Management Accountant, Sakthi Mahenthiran, Russ Kershaw

Scholarship and Professional Work - Business

The role if the management accountant (MA) is undergoing a transition from that if a "number-crunching" preparer of financial statements and cost reports to that if a business partner. The MA is increasingly expected to analyze and explain the business implications if financial information and is becoming more involved in strategic planning, performance evaluation, and business process reengineering. Changes in the business environment have caused many companies to modify their strategic objectives and redesign their existing business processes. Firms can initiate and manage business process change (BPC) using different approaches. This article identifies the particular management accounting activities and skills …