Social Technology: An Integrated Strategy and Risk Management Framework

Accounting firms, corporations, and nonprofits use social technology to attract and develop employees, manage business intelligence, innovate business processes, engage clients, customers, and members, and disseminate information to investors and regulators. Despite its benefits, social technology\u27s unique reach and speed create new risks for managers, accountants, and auditors. Based upon prior research and modifications to Kaplan and Norton\u27s (2004) balanced scorecard and the COSO (2017) Enterprise Risk Management framework, we develop an Integrated Social Technology Strategy and Risk Management Framework to model risk management during strategy selection and implementation. A field investigation involving three large accounting organizations supports the framework\u27s representativeness for the accounting profession. This research identifies significant benefits, risks, and effective risk management controls for social technology strategies, from governance to monitoring activities. These results suggest this framework\u27s potential usefulness to managers, auditors, consultants, and researchers examining how social technology can provide value to organizations

Information Technology in an Audit Context: Have the Big 4 Lost Their Advantage?

Audit firms use information technology (IT) to improve audit quality, effectiveness, and efficiency. While audit IT has evolved over the past decade, limited guidance is available to assist practitioners in determining how IT can be used. Our research objectives are fourfold. First, we examine to what extent auditors use and assess the perceived importance of IT in their audits. Second, we look at different-sized firms to determine whether IT adoption and implementation decisions differ by firm size. Third, we investigate changes in auditors\u27 use and perceived importance of IT over the past decade. Fourth, we examine whether IT has impacted the communication modes used by auditors when reviewing workpapers and fraud brainstorming. Overall, Big 4 auditors were not significantly more likely to use IT than non-Big 4 auditors, suggesting that the dominance of the Big 4 firms\u27 use of IT has lessened. In fact, there are a few applications where non-Big 4 auditors appear to have taken the lead. In addition, our findings indicate that auditors have increased the use of all the IT applications we examined ten years ago. However, we find evidence that auditors may prefer to use even more IT in their audits than they are currently using

Pro Forma Accounting Reconciliation Disclosures: The Effect of Financial Reporting Knowledge and Information Viewing Behavior on Judgments of Nonprofessional Investors

This study extends prior research by examining the extent to which financial reporting knowledge and information viewing behavior affect the influence of reconciled non-GAAP, or “pro forma” earnings disclosures on nonprofessional investors’ judgments. We find that the effects of pro forma earnings information on participants’ judgments differ, depending on their level of financial reporting knowledge and the amount of time they spent viewing the earnings reconciliation relative to other earnings information. Our results suggest that the effectiveness of financial reporting regulation may be dependent on characteristics of the general investing public that vary across investors. Regulators and standard setters need to be aware of the possible differential effects of financial reporting knowledge and investor type as they consider non-GAAP earnings reporting requirements

Investor Attitudes, Investment Screen Use, and Socially Responsible Investment Behavior

There is an increasing demand for socially responsible investment (SRI), and SRI screens are an important source of information for investors. Yet, little is known about the relationship between investors’ attitudes, use of SRI screens, and actual SRI behavior. To examine this relationship, we gathered data on investors’ environmental attitudes, use of SRI screens, and SRI behavior. We find that four out of five components of the New Ecological Paradigm (NEP) scale, a measure of basic environmental attitudes, are associated with specific attitudes towards environmentally responsible investment. These specific attitudes in turn are positively associated with SRI screen use, and SRI screen use is positively associated with the percentage of investors’ portfolio held in SRIs. There is also a significant direct relationship between specific environmentally responsible investment attitudes and SRI holdings. Our results suggest that there are complex, multi-dimensional relationships between investor attitudes, SRI screen use, and investment behavior

It\u27s just a game, or is it? Real money, real income, and real taxes in virtual worlds

Virtual worlds like Second Life offer players opportunities to earn real-world income through their activities in the game. It will not be long before governments begin to establish policies and regulations regarding the income generated by players of these game environments. This paper examines the issue of taxes in virtual world games. Two alternative places for recognizing income could be established by regulators: 1) at the point when in-game transactions take place; or 2) when players convert game assets into real-world currency. We argue for realization of income, and therefore taxation, at the exchange. We expect that burdensome policies such as requiring game operators to monitor and report taxable activities to the authorities will dissuade game play and likely result in the collapse of these vibrant economies. Therefore, our recommendation is that the IRS should establish specific rules that inform players about how they should calculate income and work with game operators to inform participants of both the rules and consequences for non-compliance

Do environmental responsibility views influence investors’ use of environmental performance and assurance information?

Purpose – The purpose of this study is to investigate whether investor views regarding the benefits of corporate environmental responsibility moderate the influence of environmental performance and assurance information on their judgments. Specifically, the authors examine the effects of two broad views: environmental responsibility is more important than financial performance, regardless of investment returns (i.e. environmental responsibility importance) and positive environmental performance will increase investment returns (i.e. environmental performance return). Design/methodology/approach – Nonprofessional investors completed an online study where environmental performance (high or low) and assurance on environmental performance information (present or absent) were varied. Participants’ corporate environmental responsibility views were assessed using a series of questions adapted from Cheah et al.’s (2011) study. Findings – Environmental performance and assurance information had a greater influence on the investment judgments of investors with strong environmental responsibility views. In contrast, participants’ environmental performance return views did not moderate the influence of environmental performance and assurance information on their judgments. Supplemental analysis indicates that these contrasting results are due to the fact that the two investor views have differing influences on the relative importance that investors place on financial vs environmental performance information. Research limitations/implications – This study presented participants with summarized financial and environmental performance information to maintain scale compatibility between financial and environmental measures. However, the information was presented in a format similar to those used by online brokerages. Practical implications – This study suggests that financial statement preparers should consider investors’ views regarding the importance and value of environmental performance information when making decisions to disclose and obtain assurance on this information. Social implications – Standard setters should consider individual differences among investors when developing guidance regarding the disclosure and assurance of environmental performance information. Originality/value – There is limited prior research which examines how investors’ views of the importance of environmental performance information may influence investment judgments. This research indicates that the strength of investors’ environmental responsibility importance moderates the previously reported influence of environmental performance and assurance information on investment judgments

The Process Of Creating XBRL Instance Documents: A Research Framework

The past decade has witnessed a technological revolution fueled by the widespread use of the Internet, web technologies, and their applications. Within financial reporting, proponents of extensible Business Reporting Language (XBRL) argue that XBRL will revolutionize financial reporting since it allows corporate financial information to be aggregated, transmitted, and analyzed quicker and more accurately (Hoffman and Strand 2001; Hannon 2002; Bovee et al. 2005; Willis 2005; Cox 2006). The SEC recently mandated that publicly traded companies furnish financial information in XBRL format (Rummel 2008; SEC 2009a). Thus, the purpose of this project is to provide researchers with a framework for examining the process financial statement preparers use to create XBRL instance documents. Further, the paper (1) demonstrates how the framework may be used, (2) raises unanswered questions, and (3) suggests avenues for future research.This article is from Review of Business Information Systems 14 (2010): 11. Posted with permission.</p

The Influence of Training Environment on Trainee Expertise

Competent computing skills are critical for successful business operations and the accountants who sustain them. Developing competent skills requires not only knowledgeable trainers but also facilities able to support and deliver instruction to accounting trainees in efficient ways. Technology-equipped training environments have long been espoused as essential environments needed to speed delivery and enhance the learning experience of trainees. This study examined the impact of training environment on knowledge and skill set development. Results suggest that there are limitations to the extent to which technology-equipped training environments influence learning.This article is from AIS Educator Journal 5 (2010): 95. Posted with permission</p