Accounting Commons^™

The Geographic Profiling Of Poverty And Accessibility: The Case Of Two Provinces In The Philippines, Alexis M. Fillone, Nicanor Roxas Jr., Cristela G. Dakila

DLSU Business & Economics Review

This study attempts to relate the poverty problem in the Philippines using spatial accessibility measures. Spatial accessibility is the ease with which one could avail of the social services and economic opportunities laid in geographic space to the individual. Using the provinces of Eastern Samar and Siquijor Island as case studies, a Social Composite Index (SCI) value for the household was derived from the 13+1 CBMS core indicators of poverty, which represents the unmet needs of the household and which was then aggregated at the barangay level. The spatial accessibility values were estimated by measuring how each barangay, specifically households, …

Assessment Of The Adoption Of Ifrs In Foreign Countries In Comparison To The Anticipated Results Of United States Ifrs Adoption, Emily Schippers

Honors Program Theses

The importance of discussing implications of adoption of International Financial Reporting Standards (IFRS) in the U.S. is imperative to financial investors, audit committees, and corporations' management as IFRS may potentially impact earnings quality and the consistency of financial statements which in turn may influence earnings per share of that particular organization. As the standards are set to converge to IFRS tentatively in 2015 for the United States, it is essential to have some indication of what types of hindrances and differences will be a result of adopting a new set of financial reporting standards. This can be accomplished by examining …

An Analysis Of Quickbooks Internal Control Utilization, Andrew J. Steckel

Honors Program Theses

The QuickBooks software created and sold by Intuit, Inc. is the most predominantly used accounting software among small businesses. According to a June 19, 2008 press release issued by Intuit, more than 3.7 million businesses use QuickBooks, and it held a 94.2 percent market share for retail units in the business accounting category as of March 2008 (Intuit, 2008). As such, large amounts of financial data and information are created, edited, and stored using QuickBooks. A large majority of these companies will rarely, if ever, have their financial statements or internal control structures audited. However, the accuracy and security of …

Internal Control Weakness And Bank Loan Contracting: Evidence From Sox Section 404 Disclosures, Jeong-Bon Kim, Byron Y. Song, Liandong Zhang

Research Collection School Of Accountancy

Using a sample of borrowing firms that disclosed internal control weaknesses (ICW) under Section 404 of the Sarbanes-Oxley Act, this study compares various features of loan contracts between firms with ICW and those without ICW. Our results show the following. First, the loan spread is higher for ICW firms than for non-ICW firms by about 28 basis points, after controlling for other known determinants of loan contract terms. Second, firms with more severe, company-level ICW pay significantly higher loan rates than those with less severe, account-level ICW. Third, lenders impose tighter nonprice terms on firms with ICW than on those …

Why 'Democracy' And 'Drifter' Firms Can Have Abnormal Returns: The Joint Importance Of Corporate Governance And Abnormal Accruals In Separating Winners From Losers, Koon Boon Kee

Research Collection School Of Accountancy

No abstract provided.

Do Ceos And Principal Financial Officers Take A "Bath" Separately Or Together?: An Investigation Of Discretionary Accruals Surrounding Appointments Of New Ceos And Pfos, Marshall A. Geiger, David S. North

Accounting Faculty Publications

This study presents the first targeted examination of changes in financial reporting surrounding the appointment of both new CEOs and Principal Financial Officers (PFOs). We identify companies that appoint new CEOs and PFOs in the period 1995 to 2002 and find that the change in discretionary accruals is negative and significant in the year of hire (from t-1 to t) for firms appointing a new CEO or both a new CEO and PFO (i.e., the "big bath"), but not for firms appointing only a new PFO. We also find that firms appointing both executives in the same year report significant …

The Influence Of Irrelevant Information On Is Auditor Key Risk Factor Predictions, Daniel D. Selby

Accounting Faculty Publications

Can information systems (IS) auditors ignore irrelevant information when they assess key risk factors (KRFs)? Irrelevant information is information that is of little or no value to a specific task or predicted future outcome. When assessing a KRF, IS auditors sift through numerous pieces of information to target items that are relevant to understanding the KRF. Some items encountered by IS auditors may be relevant to understanding the KRF, while other items encountered may be irrelevant. IS auditors should ignore irrelevant information when they assess KRFs.

An example of irrelevant information that an IS auditor may encounter during a financial …

Should Investors Follow The Prophets Or The Bears? Evidence On The Use Of Public Information By Analysts And Short Sellers, Michael S. Drake, Lynn Rees, Edward P. Swanson

Faculty Publications

We investigate whether short sellers and analysts differ in their use of information that is predictive of future returns. We find that open short interest is significantly associated in the expected direction with all eleven variables examined. In contrast, analysts tend to positively recommend stocks with high growth, high accruals, and low book-to-market ratios, despite these variables having a negative association with future returns. We then investigate the profitability of using short interest in trading. We find abnormal returns (1.11 percent per month) from a zero-investment strategy that (1) shorts firms with highly favorable analyst recommendations (buy signal) but high …

An Empirical Investigation Of Decision Aids To Improve Auditor Effectiveness In Analytical Review, Robert N. Marley

USF Tampa Graduate Theses and Dissertations

There is considerable evidence in the audit literature that even though auditors usually identify the relevant information needed to propose and select the correct cause of an unexpected fluctuation, they frequently do not propose the correct cause, and even when they do propose the correct cause, they often fail to select it. I suggest that working memory limitations might be a factor contributing to this analytical review paradox. Consequently, this study investigates whether two new decision aids, designed from Cognitive Load Theory, reduce auditors' cognitive load during analytical review, freeing cognitive resources for problem solving, and ultimately leading to improved …

The Effects Of Item Complexity And The Method Used To Present A Complex Item On The Face Of A Financial Statement On Nonprofessional Investors` Judgments, Linda Gale Ragland

USF Tampa Graduate Theses and Dissertations

My study is motivated by standard setters interest in better understanding (and the gap in research as to) the effects of item complexity and disaggregation across a financial statement on users' decision processes (Bonner 2008; Glaum 2009; FASB 2010b). I examine whether complexity of an item and the method used to present the item on a financial statement influences nonprofessional investors' judgments. Specifically, I examine two issues raised concerning IAS 19 Employee Benefits. The first is to examine whether there are differences in nonprofessional investors' judgments when individual components of a complex item (defined pension cost) are disaggregated across a …

Ceo Demographics And Accounting Fraud: Who Is More Likely To Rationalize Illegal Acts?, Carmelita J. Troy, Ken G. Smith, Madeline A. Domino

Faculty Publications

This article proposes that key CEO demographic factors reflect alternative modes of rationalizing the choice to engage in and/or facilitate accounting fraud. Specifically the authors theorize that younger, less functionally experienced CEOs and CEOs without business degrees will be more likely to rationalize accounting fraud as an acceptable decision. Based on a sample of 312 fraud-committing and control firms, the study finds support for the authors’ predictions. It also finds that CEO stock options (a form of executive equity incentive) also predict fraud, and that this relationship is not moderated by CEO demographics. The study thus extends upper echelon theory …

Uniform Accountancy Act, Standards For Regulation Including Substantial Equivalency, American Institute Of Certified Public Accountants (Aicpa), National Association Of State Boards Of Accountancy

Association Sections, Divisions, Boards, Teams

No abstract provided.

Lost In Translation: The Effects Of Incentive Compensation On Strategy Surrogation, Jongwoon Choi, Gary Hecht, William B. Tayler

Faculty Publications

To facilitate managers’ decision-making, firms develop strategic performance measurement systems that translate strategy into performance measures. Ideally, managers see measures for what they are: imperfect proxies for intangible strategic constructs. However, managers may fail to fully appreciate the fact that measures are merely representations of the strategic constructs, and act as though the measures were the construct of interest – a phenomenon we label surrogation. In this paper, we investigate whether and how the use of strategically-linked performance measures for compensation purposes affects managers’ propensity to exhibit surrogation. In accordance with the attribute substitution framework (Kahneman and Frederick 2002), we …

Short Interest As A Signal Of Audit Risk, Cory A. Cassell, Michael S. Drake, Stephanie J. Rasmussen

Faculty Publications

Motivated by evidence from the empirical accounting and finance literatures suggesting that short sellers target firms with suspect financial reporting, we investigate whether short interest provides a signal of the degree of audit risk. We find a positive association between audit fees and short interest (total shares sold short scaled by total shares outstanding) after controlling for other determinants of audit fees. This finding suggests that short interest is an indicator of audit risk that reflects information not captured by traditional client risk measures. We also find an increase in the magnitude of the association between audit fees and short …

Analysts’ Accrual-Related Over-Optimism: Do Analyst Characteristics Play A Role?, Michael S. Drake, Linda A. Myers

Faculty Publications

Bradshaw, Richardson, and Sloan (2001) find that analyst forecast over-optimism is greater for firms with high accruals. This “accrual-related over-optimism” is generally interpreted as evidence that analyst forecasts do not fully incorporate predictable earnings reversals associated with high accruals. We investigate whether analyst experience, access to resources (brokerage size), and portfolio complexity moderate the relation between over-optimistic forecasts and high accruals. We demonstrate the robustness of accrual-related over-optimism to controls for cash flow and prior forecast errors. We find that accrual-related over-optimism is lower for analysts with greater general experience and for analysts following fewer firms but find only limited …

Managerial Ability And Earnings Quality, Peter Demerjian, Melissa F. Lewis-Western, Baruch Lev, Sarah Mcvay

Faculty Publications

We examine the relation between managerial ability and earnings quality. We find that earnings quality is positively associated with managerial ability. Specifically, more able managers are associated with fewer subsequent restatements, higher earnings and accruals persistence, lower errors in the bad debt provision, and higher quality accrual estimations. The results are consistent with the premise that managers can and do impact the quality of the judgments and estimates used to form earnings.

Pcaob Standards And Related Rules As Of January 2011, Public Company Accounting Oversight Board, American Institute Of Certified Public Accountants (Aicpa)

AICPA Professional Standards

No abstract provided.

Aicpa Professional Standards As Of June 1, 2011, Volume 1: U.S. Auditing Standards-Aicpa, Attestation Standards, American Institute Of Certified Public Accountants (Aicpa)

AICPA Professional Standards

No abstract provided.

Individual Accounting Faculty Research Rankings By Topical Area And Methodology, Jeffrey Pickerd, Nathaniel M. Stephens, Scott L. Summers, David A. Wood

Faculty Publications

This paper ranks individual accounting researchers based on their research productivity in the most recent 6, 12, and 20 years. We extend prior individual faculty rankings by providing separate individual faculty research rankings for each topical area commonly published in accounting journals (AIS, audit, financial, managerial, and tax). In addition, we provide individual faculty research rankings for each research methodology commonly used by accounting researchers (analytical, archival, and experimental). These findings will be of interest to potential doctoral students and current faculty, as well as accounting department, business school, and university administrators as they make decisions based on individual faculty …

Reconciling Archival And Experimental Research: Does Internal Audit Contribution Affect The External Audit Fee?, Douglas F. Prawitt, Nathan Y. Sharp, David A. Wood

Faculty Publications

Consistent with guidelines from external auditing standards, a large body of experimental and survey research suggests that an internal audit function (IAF) can contribute in ways that lead to decreased external audit fees; however, research using archival methodologies generally finds either no relation or a positive relation between proxies for IAF contribution and external audit fees. In this paper, we provide new evidence using a unique and previously unavailable data set to develop archival proxies of internal audit contribution. We find that SAS No. 65-based proxies for the contribution of internal audit are associated with lower unexpected external audit fees. …

Accounting Doctoral Program Rankings Based On Research Productivity Of Program Graduates, Nathaniel M. Stephens, Scott L. Summers, Brady Williams, David A. Wood

Faculty Publications

This paper presents rankings of accounting doctoral programs based on the research productivity of each institution’s graduates in the years immediately following their graduation. We use two time periods for analysis: the first three years after graduation and the first six years after graduation. We extend previous doctoral program ranking literature by expanding rankings of accounting doctoral programs with specific rankings for topical areas (accounting information systems (AIS), audit, financial, managerial, and tax) and methodologies (analytical, archival, and experimental). We show that rankings for topical and methodological areas differ significantly from rankings produced using methodologies that create a singular doctoral …

Do Earnings Reported Under Ifrs Tell Us More About Future Earnings And Cash Flows?, T.J. Atwood, Michael S. Drake, James N. Myers, Linda A. Myers

Faculty Publications

We contribute to the debate about the relative benefits and costs of International Financial Reporting Standards (IFRS) adoption by examining whether earnings persistence and the association between current accounting earnings and future cash flows differ for firms reporting under IFRS versus firms reporting under United States Generally Accepted Accounting Principles (U.S. GAAP) and firms reporting under non-U.S. domestic accounting standards (DAS). Using samples comprised of 58,832 firm-year observations drawn from 33 countries from 2002 through 2008, we find that positive earnings reported under IFRS are no more or less persistent than earnings reported under U.S. GAAP but losses reported under …

Accounting For Lease Renewal Options: The Informational Effects Of Unit Of Account Choices, Jeffrey Hales, Shankar Venkataraman, T. Jeffrey Wilks

Faculty Publications

This study examines the informational effects of unit of account choices in the context of a proposed standard on lease accounting. Standard setters have tentatively decided that leases in excess of one year should be recognized on a lessee’s balance sheet, including optional lease periods, even though the lessee can choose not to renew the lease. We argue that this approach lacks representational faithfulness and creates an informational problem for users. Using an experiment, we show that the proposed treatment of renewal options has a negative effect on lenders’ willingness to lend to a firm with renewal options. However, we …

Aicpa Standards For Performing And Reporting On Peer Reviews And Related Interpretations, Based On The June 1, 2010 Exposure Draft (Qcm &Cpe Reviews), American Institute Of Certified Public Accountants. Peer Review Board

Exposure Drafts, Comment Letters, and Statements of Position

No abstract provided.

Comment Letters On Working Draft Of Aicpa Audit And Accounting Guide Employee Benefit Plans, Updated 12/15/2010, Released 4/12/2011, American Institute Of Certified Public Accountants. Auditing Standards Board

Exposure Drafts, Comment Letters, and Statements of Position

No abstract provided.

Comment Letters On Iaasb Consultation Paper: Enhancing The Value Of Auditor Reporting: Exploring Options For Change, American Institute Of Certified Public Accountants. Auditing Standards Board

Exposure Drafts, Comment Letters, and Statements of Position

No abstract provided.

Codification Of Statements On Standards For Attestation Engagements, As Of January 2011, Numbers 1 To 17, American Institute Of Certified Public Accountants (Aicpa)

AICPA Professional Standards

No abstract provided.

Aicpa Professional Standards As Of June 1, 2011, Volume 2: Accounting And Review Services, Code Of Professional Conduct, Bylaws, Valuation Services, Consulting Services, Quality Control, Peer Review, Tax Services, Personal Financial Planning, Continuing Professional Education, American Institute Of Certified Public Accountants (Aicpa)

AICPA Professional Standards

No abstract provided.

Codification Of Statements On Standards For Accounting And Review Services As Of January 2011, Numbers 1 To 20, American Institute Of Certified Public Accountants. Accounting And Review Services Committee

AICPA Professional Standards

No abstract provided.

Codification Of Statements On Auditing Standards (Including Statements On Standards For Attestation Engagements) Numbers 1 To 121, As Of January 2011, American Institute Of Certified Public Accountants (Aicpa)

AICPA Professional Standards

No abstract provided.