Accounting Commons^™

Supervisor-Subordinate Communication In The Contemporary Audit Environment, Devon P. Jefferson

Theses and Dissertations

Just five years ago I was working as an Audit Manager in person (in the office or at the client site), amongst each of my subordinates, which made common work practices like knowledge sharing, responding to questions, and building team morale easy. Since then, remote work has become the new norm, which has significantly changed the communication dynamics between supervisors and subordinates. This dissertation is my personal pursuit to understanding how supervisor and subordinate auditors are currently interacting to achieve desired work outcomes, and identifying specific areas where challenges may exist. I accomplish this objective through four papers, including a …

Impact Of Environmental, Social, And Governance Disclosure On Firm Performance: A Case Of Listed Manufacturing Firms In Nigeria, Abdulbaki Ubandawaki

Theses and Dissertations

The traditional goal of companies is to maximize shareholders’ wealth. However, to achieve this objective, many complementary goals must be pursued alongside the traditional ones. To achieve corporate goals, businesses need to interact with the environment. The continual interaction of the corporation with the environment has definitely come with its costs and benefits, and the global interest in promoting sustainable development has made corporate ESG reporting a crucial issue. The aim of the study is to investigate the relationship between ESG reporting and firm performance among listed manufacturing firms in Nigeria. The data was collected from annual and standalone sustainability …

The General Anti-Avoidance Rule, Mary Cowx, Jon Kerr

Faculty Publications

The general anti-avoidance rule, or GAAR, is an enforcement mechanism that gives a country’s taxing authority broad power to deny a taxpayer tax benefits associated with any transaction. Although GAARs are becoming increasingly common, the presence of a GAAR is generally overlooked by researchers and thus has been left unstudied. In this paper, we provide an initial investigation by studying the effect of GAARs on firm-level corporate tax avoidance behaviors. Using an indicator for the enactment or strengthening of a GAAR within a country in a stacked difference-in-differences design, we find GAAR enactment is associated with a statistically and economically …

Estimating The Likelihood Of Future Tax Settlements, Jared Jennings, Joshua A. Lee, Erin Towery

Faculty Publications

Corporate income tax settlements represent a substantial cash outflow for many U.S. firms. This study develops an ex-ante measure of future corporate income tax settlement likelihood using quantitative and qualitative information from Form 10-K. We find that both quantitative and qualitative information are incrementally useful in predicting future tax settlements. We then use our new measure to examine the association between predicted future tax settlements and cash holdings. In contrast with prior research documenting a positive association between reserves for uncertain tax positions and cash holdings, we find that firms with a higher likelihood of future tax settlements hold less …

Do Audit Partners Exhibit Hometown Bias?, Yuzhou Chen, Timothy Seidel, Aleksandra "Ally" B. Zimmerman

Faculty Publications

We investigate whether audit partners exhibit greater leniency towards audit clients located in their childhood or pre-professional home state. While prior research has examined the audit quality effects of geographic distance between an auditor and client as well as auditors’ social ties to company management or directors, this study uniquely examines auditors’ psychological affinity to places rather than people. Using hand-collected data on audit partners, company managers, and directors, we find evidence of partners exhibiting hometown bias in the form of greater leniency towards clients’ opportunistic reporting. However, we find no evidence to suggest that these psychological biases affect audit …

Anomaly Time, Boone Bowles, Adam V. Reed, Matthew C. Ringgenberg, Jacob Thornock

Faculty Publications

We examine the timing of returns around the publication of anomaly trading signals. Using a database that captures when information is first publicly released, we show that anomaly returns are concentrated in the first month after information release dates, and these returns decay soon thereafter. We also show that the academic convention of forming portfolios in June underestimates predictability because it uses stale information, which makes some anomalies appear insignificant. In contrast, we show many anomalies do predict returns if portfolios are formed immediately after information releases. Finally, we develop guidance on forming portfolios without using stale information.

Regulating Gender Diversity: Evidence From California Senate Bill 826, Abigail Allen, Aida Wahid

Faculty Publications

Do gender diversity quotas enhance firm value? This broad question has sparked significant debate because while diversity is generally thought to improve board functioning, prior research in international settings suggests mandating diversity may have adverse consequences if it moves firms away from market equilibrium. Exploiting the political events leading up to the passage of California Senate Bill 826 as an exogenous shock to assess the market implications of board gender composition, we document either significantly positive or insignificant 2-day abnormal returns for California firms across a variety of model specifications. Importantly, this finding contradicts the strong claims of contemporary studies …

The Impact Of Chief Audit Executive Turnover In Taiwan, Kenneth L. Bills, Hua-Wei Huang, Yi-Hung Lin, David A. Wood

Faculty Publications

This study adds to the emerging body of research showing the importance of internal audit to improve corporate governance and firm performance. Specifically, we test how the market reacts to the announcement of a turnover to the head of internal audit (i.e., the chief audit executive (CAE)). We find negative cumulative abnormal returns in the days surrounding the announcement of a CAE turnover and that the market holds a relatively negative perception of CAE turnover regardless of the reasons for the turnover event. We then study two reasons for why the market would react negatively to the CAE turnover and …

Development Of A Framework Of Key Internal Control And Governance Principles For Robotic Process Automation (Rpa), Marc Eulerich, Nathan Waddoups, Martin Wagener, David A. Wood

Faculty Publications

Although robotic process automation (RPA) usage is growing rapidly in accounting, concerns are emerging regarding the internal controls and overall governance structure surrounding RPA. To help address these concerns, we use a design science research approach and work with a Fortune 500 company to develop an RPA governance framework. The framework consists of 4 governance areas and 14 control requirements, which help maximize the benefits and minimize the risks associated with the use of RPA. We validate that the framework is useful and generalizable to many organizations by presenting the framework to and subsequently interviewing and surveying 84 professionals at …

Chatbots Mitigate Help-Seeking Avoidance, James Gaskin, Eva Blondeel, Ryan Schuetzler, Rachel Serre, Jacob Steffen, David A. Wood

Faculty Publications

This research explores the transformative role of large language model (LLM) chatbots in fostering help-seeking behaviors among introverted and underrepresented students in educational settings. Despite the importance of help-seeking for academic success, certain groups exhibit avoidance behaviors due to self-presentation concerns and stereotype threats. By integrating LLM chatbots as non-judgmental, anonymous teaching assistants in an introductory information systems course, the study demonstrates how technology can mitigate these behaviors and promote inclusivity. The chatbots provided real-time, unbiased support, significantly enhancing the students' willingness to engage in help-seeking behaviors without fear of judgment. This practical application of chatbots not only supports academic …

Disclosure Benchmarking By Lawyers: Evidence Fromthe Ipo Setting, Michael S. Drake, Jeff Mcmullin, Kenneth Merkley, Chase Potter, John Treu

Faculty Publications

Lawyers play an important advisory role in drafting financial reports, yet empirical evidence documenting the influence of external legal counsel on this process remains sparse. This study focuses on a specific aspect of lawyers’ drafting process: the practice of reviewing disclosures previously filed by other issuers—a practice termed “disclosure benchmarking.” Using initial public offering (IPO) disclosures as the setting, we find that disclosure benchmarking is associated with amore efficient Securities and Exchange Commission (SEC) review process. We further find that it is associated with several measures of disclosure quality, including disclosures that are less likely to be revised in subsequent …

Automating Evaluation Of Skill Assessment To Promote Skill Acquisition In The Area Of Data Analytics Automation, Joshua G. Coyne, Scott L. Summers, Brigham Villanueva, David A. Wood

Faculty Publications

As accounting increasingly embraces automation and data analytics, proficient skill assessment remains a challenge. We introduce an automated tool that streamlines the evaluation of Alteryx workflows. Utilizing the design science methodology, our tool effectively executes and compares Alteryx workflows against a solution, providing score and feedback. Validation demonstrates remarkable gains; our tool is error-free and 9 to 146 times faster than manual evaluation. The tool’s efficiency, accuracy, and user-friendliness make it much more feasible to assign unstructured Alteryx assignments for student development. Enhanced technology skills will promote hiring and productivity gains associated with automation in accounting.

Explaining Corporate Tax Avoidance, Andrew Belnap, Kaitlyn Kroeger, Jacob Thornock

Faculty Publications

The tax avoidance literature identifies dozens of variables that are related to corporate tax avoidance, but it lacks a framework for understanding the relative importance of these variables and the theories that drive these relations. We distill thirty years of tax avoidance research into key theories, and then use novel empirical techniques to quantify the relative and total importance of proposed explanations. We find that factors tied to investment opportunities contribute more to explained variation than other proposed theories. On the other hand, agency costs and financial reporting concerns explain very little variation in tax avoidance proxies, while operating metrics …

คุณภาพรายงานทางการเงิน และความโดดเด่นด้าน Esg กับความสัมพันธ์ระหว่างคุณลักษณะกรรมการ โครงสร้างการถือหุ้น และ ประสิทธิภาพการลงทุนของบริษัทจดทะเบียนในตลาดหลักทรัพย์แห่งประเทศไทย, ภัฏฏินี ซ้ายขวัญ

Chulalongkorn University Theses and Dissertations (Chula ETD)

งานวิจัยนี้มีวัตถุประสงค์เพื่อศึกษาอิทธิพลทางตรงของคุณลักษณะกรรมการ โครงสร้างการถือหุ้น คุณภาพรายงานทางการเงิน ความโดดเด่นด้าน ESG (สิ่งแวดล้อม สังคม และธรรมาภิบาล) ที่มีต่อประสิทธิภาพการลงทุน และอิทธิพลทางอ้อมของคุณภาพรายงานทางการเงิน ความโดดเด่นด้าน ESG ที่ส่งผ่านอิทธิพลของคุณลักษณะกรรมการ และโครงสร้างการถือหุ้นไปยังประสิทธิภาพการลงทุน การวิจัยนี้เป็นการวิจัยเชิงปริมาณโดยใช้ข้อมูลทุติยภูมิของบริษัทจดทะเบียนในตลาดหลักทรัพย์แห่งประเทศไทยจำนวน 353 บริษัท 7 อุตสาหกรรมระหว่างปี พ.ศ.2560 ถึง ปี พ.ศ. 2563 รวม 1,412 ตัวอย่าง โดยใช้โมเดลสมการโครงสร้าง (SEM) ในการทดสอบสมมติฐานการวิจัย ผลการศึกษาพบว่า คุณภาพรายงานทางการเงิน คุณลักษณะกรรมการในด้านความหลากหลายของกรรมการ และการเป็นกรรมการในหลายกิจการมีผลเชิงบวกต่อประสิทธิภาพการลงทุน ทั้งนี้ ไม่พบความสัมพันธ์ระหว่างโครงสร้างการถือหุ้นกับประสิทธิภาพการลงทุน และความสัมพันธ์ระหว่างความโดดเด่นด้าน ESG กับประสิทธิภาพการลงทุน สำหรับผลของอิทธิพลทางอ้อม พบว่า คุณภาพรายงานทางการเงินเป็นตัวแปรส่งผ่านความสัมพันธ์ระหว่างคุณลักษณะกรรมการกับประสิทธิภาพการลงทุน และความสัมพันธ์ระหว่างโครงสร้างการถือหุ้นกับประสิทธิภาพการลงทุน อย่างไรก็ตาม ความโดดเด่นด้าน ESG ไม่มีอิทธิพลส่งผ่านความสัมพันธ์ระหว่างคุณลักษณะกรรมการกับประสิทธิภาพการลงทุน และความสัมพันธ์ระหว่างโครงสร้างการถือหุ้นกับประสิทธิภาพการลงทุน ดังนั้น ผลการวิจัยแสดงหลักฐานเชิงประจักษ์เกี่ยวกับบทบาทของกรรมการที่มีความเกี่ยวข้องกับคุณภาพรายงานทางการเงิน และประสิทธิภาพการลงทุน

The Economic Value Of Blockchain Applications: Early Evidence From Asset-Backed Securities, Xia Chen, Qiang Cheng, Ting Luo

Research Collection School Of Accountancy

In this paper, we evaluate the economic value of a blockchain application. In the context of asset-backed securities (ABS) issuance in China, where some ABS are issued with blockchain technology and others are not, we find that the use of blockchain significantly reduces the coupon yield at issuance. Compared with other ABS, those issued using blockchain technology experience a decrease of 31.4 basis points in the yield spread, which corresponds to a relative decrease of 13%. We further document that the effect of blockchain is more pronounced for ABS deals rated by less reputable credit rating agencies and agencies that …

Investigating The Use Of Voluntary Furloughs To Reduce Labour Costs: The Effect On Employee Effort, Kelsey Matthews

Theses and Dissertations (Comprehensive)

To quickly reduce costs in response to external shocks, firms often implement voluntary furloughs. In a voluntary furlough, employees decide whether to accept a reduction in their pay with a corresponding reduction in work hours. Despite the prevalence of voluntary furloughs in practice, it remains an empirical question how employees will respond to this cost reduction practice. The purpose of my dissertation is to investigate how the implementation of a voluntary furlough affects the subsequent effort of employees who volunteer and those who do not volunteer for a furlough.

I address my research question using two experiments where I manipulate …

Stakeholders’ Participation In Pcaob Audit Standard Setting, Xiaoshuai Yang

Electronic Theses & Dissertations (2024 - present)

Lobbying is an integral part of the Public Company Accounting Oversight Board’s standard-setting process. Although the PCAOB has been drafting auditing standards for over 20 years, there is still much to learn about how stakeholder behavior in submitting comment letters to the PCAOB varies by interest group, comment period (concept release, proposal, and reproposal), the stakeholder’s position on the proposal, arguments used, and emotional strategies. This paper examines PCAOB Docket 034, which proposed audit report reforms, including the auditor’s disclosure of critical audit matters (CAMs). There was strong stakeholder participation and conflicting opinions when this standard was under discussion. To …

Costs And Benefits Of A Risk-Based Pcaob Inspection Regime, Brant E. Christensen, Nathan J. Newton, Michael S. Wilkins

Faculty Publications

We investigate the costs and benefits of the PCAOB’s risk-based inspection regime by studying how auditors respond to engagement-level inspection risk. Using an established inspection selection model, we find evidence that auditors behave consistent with accountability theory when auditing clients with elevated ex-ante inspection risk. Specifically, we observe an increased propensity to report material weaknesses, a decreased propensity to assert that previous material weaknesses have been remediated, increased audit effort, and a decreased likelihood of subsequent financial statement restatement. In general, these outcomes reflect auditors’ attempts to minimize negative inspection outcomes in a way that could be beneficial to investors. …

Artificial Intelligence’S Capabilities, Limitations, And Impact On Accounting Education: Investigating Chatgpt’S Performance On Educational Accounting Case, Xu (Joyce) Cheng, Ryan Dunn, Travis Holt, Kerry Inger, J. Gregory Jenkins, Jefferson Jones, James Long, Tina Loraas, Mollie Mathis, Jonathan Stanley, David A. Wood

Faculty Publications

This study evaluates the capabilities of ChatGPT models 3.5 and 4 to provide solutions to eight educational accounting cases. We find that ChatGPT’s ability to provide accurate solutions varies depending on the type of case requirement and topical area of accounting, with better performance on tasks requiring elements that require explanation, application of rules, and ethical evaluation. However, ChatGPT performs poorly on tasks that require financial statement creation, journal entries, or software use. Our study also finds that detection tools provided by ChatGPT's developer are ineffective in identifying text created by Artificial Intelligence Text Generators (AITG). We suggest ways in …

Leveraging Chatgpt For Enhancing The Internal Audit Process – A Real-World Example From A Large Multinational Company, Scott Emett, Marc Eulerich, Egemen Lipinski, Nicolo Prien, David A. Wood

Faculty Publications

We discuss how the internal audit function (IAF) of a large multinational energy company, Uniper, is starting to use ChatGPT to improve automation of internal auditing. We investigate the benefits and challenges of integrating ChatGPT into internal audit processes and assess its impact on the efficiency and effectiveness of the IAF. Uniper has implemented ChatGPT into parts of audit preparation, fieldwork, and audit reporting. On their initial tests, they estimate efficiency gains ranging from 50 to 80 percent for various processes. We report key risks and challenges with using ChatGPT in internal auditing as well as the initial key practices …

Patience Is Key: The Time It Takes To See Benefits From Continuous Auditing, Marc Eulerich, Benjamin Fligge, Vanessa Lopez Kasper, David A. Wood

Faculty Publications

Despite research showing numerous benefits to continuous auditing, uptake by internal audit functions has been quite slow. Using field data from a multinational company, we study two possible reasons for the slow uptake of continuous auditing—the time it takes for continuous auditing to result in measurable reductions in audit risks and that not every type of risk is equally likely to improve from continuous auditing. Results suggest it takes three years before observing significant risk reductions from implementing continuous auditing. We also find that the benefits of implementing continuous auditing vary by risk factor, ranging in improvement from 0 percent …

Is It All Hype? Chatgpt’S Performance And Disruptive Potential In The Accounting And Auditing Industries, Marc Eulerich, Aida Sanatizadeh, Hamid Vakilzadeh, David A. Wood

Faculty Publications

ChatGPT frequently appears in the media, with many predicting significant disruptions, especially in the fields of accounting and auditing. Yet research has demonstrated relatively poor performance of ChatGPT on student assessment questions. We extend this research to examine whether more recent ChatGPT models and capabilities can pass major accounting certification exams including the Certified Public Accountant (CPA), Certified Management Accountant (CMA), Certified Internal Auditor (CIA), and Enrolled Agent (EA) certification exams. We find that the ChatGPT 3.5 model cannot pass any exam (average score across all assessments of 53.1%). However, with additional enhancements, ChatGPT can pass all sections of each …

The Dark Side Of Robotic Process Automation, Marc Eulerich, Nathan Waddoups, Martin Wagener, David A. Wood

Faculty Publications

Prior research on Robotic Process Automation (RPA) has largely focused on how it benefits firms and employees. In contrast, we interview 26 high-profile RPA stakeholders at a Fortune 500 firm to ascertain challenges, drawbacks, or pitfalls of using RPA. We identify five key problems related to RPA usage: (1) RPA is often used as a quick-fix band-aid instead of fixing core system issues, (2) RPA can cause serious control and security issues, (3) the true cost of RPA is often misunderstood and understated, (4) RPA governance is complicated and challenging, and (5) RPA usage can lead to a loss of …

A Demonstration Of How Chatgpt Can Be Used In The Internal Auditing Process, Marc Eulerich, David A. Wood

Faculty Publications

For the past several years, internal audit functions (IAFs) have been significantly increasing their digitization efforts to enhance the efficiency and effectiveness of the IAF. The introduction of ChatGPT has increased the potential for IAFs to have a more significant impact; however, there is little guidance on how ChatGPT can influence the day-to-day work of internal auditors. This paper demonstrates with specific examples how ChatGPT can be used to enhance all aspects of the audit process. While not comprehensive in nature, the detailed, illustrative examples should help internal auditors see actionable steps they can take to be more efficient and …

Gauging Scholarly Engagement: An Investigation Into Topic Popularity Within The Asee Cit Division, Barry M. Lunt, Mudasser Fraz Wyne, David A. Wood

Faculty Publications

Since 2011, the Computing and Information Technology (CIT) division of the ASEE has had 427 papers presented and published in the proceedings of the ASEE Annual Conference and Exposition. This paper looks at these 427 papers as a whole, providing descriptive statistics, giving the top institutions and authors that have contributed to these papers, and providing information regarding the impact of the top ten papers, as measured by their citations and downloads. We have also used the ChatGPT version 4.0 to provide categories for the 427 papers, providing insight into the most popular topics for papers in the CIT division.

Assessing Virtual Reality’S Influence On Honesty In Reporting, Jeffrey Pickerd, Nathan Waddoups, David A. Wood, Xiaomei (Grazia) Xiong

Faculty Publications

Organizations, businesses, and society are exploring and adopting virtual reality (VR) and augmented reality (AR). VR is expected to boost the global economy by $1.5 trillion by 2030. In this study, we focus on the effect of VR on an important accounting variable—reporting honesty. We examine reporting honesty across two tasks, various measures, and various populations, that are commonly used in existing research. In our initial experiment, participants misreported more in a dice rolling task when performing it in a VR setting than in a non-VR setting. However, in a second and third experiment attempting to replicate and extend our …

Improving The Production And Reviewing Of Design Science Research In Accounting, Noah Myers, Mason Snow, Nathan Waddoups, David A. Wood

Faculty Publications

Design Science Research (DSR) is a rigorous research methodology widely used in other fields like computer science and engineering, but its application in accounting is still relatively limited. This paper reviews the implementation of DSR published in accounting journals and provides recommendations to improve the authoring and reviewing processes. We review 51 DSR articles published in accounting journals between 2011 and 2023. The analysis identified areas where papers excelled and fell short, leading to recommendations in the following key aspects: adherence to a research framework, validation of research questions, defining objectives of artifacts, developing a more diverse set of artifacts, …

Short And Synthetically Distort: Investor Reactions To Deepfake Financial News, Scott Emett, Marc Eulerich, Jeffrey Pickerd, David A. Wood

Faculty Publications

Recent advances in artificial intelligence have led to new forms of misinformation, including highly realistic “deepfake” synthetic media. We conduct three experiments to investigate how and why retail investors react to deepfake financial news. Results from the first two experiments provide evidence that investors use a “realism heuristic,” responding more intensely to audio and video deepfakes as their perceptual realism increases. In the third experiment, we introduce an intervention to prompt analytical thinking, varying whether participants make analytical judgments about credibility or intuitive investment judgments. When making intuitive investment judgments, investors are strongly influenced by both more and less realistic …

Reassessing Assurance In An Automated World: Insights From Board Members, Executives, And Internal Auditors, Scott Emett, Marc Eulerich, Jeffrey Pickerd, David A. Wood

Faculty Publications

Technological advances that automate work continue to transform the accounting profession. We examine whether automation impacts resource allocation within the internal audit function (IAF), a unique setting that allows us to compare demand for assurance activities with demand for consulting activities. We conduct an experiment in which experienced board members, executives, and internal auditors make budget recommendations for a company’s IAF that developed automations that improved the efficiency of the IAF. Results show that across all groups, participants respond to these efficiencies by decreasing the IAF’s total budget but retaining the productive capacity of the IAF. The budget cuts are …

Implementasi Social Entrepreneur Dalam Umkm: Studi Kasus Program Csr “Umkm Kopi Tarzzan” Pt Geo Dipa Energi (Persero), Denindra Dwiputra Margono, Feriska Ajeng Anantri

Jurnal Administrasi Bisnis Terapan

Social problems lead to situations or conditions that disrupt the welfare and harmony of society, social problems have a difference between expectations and reality or as a gap between the existing situation and the situation that should be. One of the social problems that occur in Indonesia is poverty. Poverty is a state of deprivation such as food & drink, housing, and clothing. Poverty is related to low levels of education, health, and employment. One solution to the problem of poverty is to carry out CSR programs carried out by the Company. One of the companies that implement the program …