Voluntary Disclosures in the Audit Committee Report

In recent years, there has been an increasing interest in the voluntary disclosures in the audit committee report by different stakeholders such as corporate governance organizations and institutional investors. Based on the different requests for enhanced audit committee disclosures, the SEC issued a concept release during 2015 proposing several enhancements and requesting public comment (Securities and Exchange Commission (SEC), 2015). In this dissertation, we investigate the voluntary disclosures in the audit committee report. The purpose of our study is twofold: 1) to analyze the comment letters to understand "investors' needs" in the context of the audit committee disclosures, 2) to investigate the association between voluntary disclosures in the audit committee report and earnings management, and the voluntary disclosures impact on the external environment. The first essay analyzes the comment letters by using a framing analysis. We aim to understand how each respondent category defines the current audit committee disclosure requirements in fulfilling "investors' needs." We compare and contrast the respondents’ frames and analyze their discourse. The second essay is composed of two studies and considers the top US Bank Holding Companies (BHC). We study the association between the voluntary disclosures in the audit committee reports and banks' earnings quality. Also, in this study, we analyze the impact of the voluntary disclosures in the audit committee report on the implied cost of equity and financial analysts' forecasting properties. The results reveal that there is a wide variation among respondents in defining “investors’ needs” and how they argue to convince the SEC to adopt their point of view. Also, the discourse analysis reveals several issues at the corporate governance level that require the SEC attention. As for the second essay, the results show that there is a positive association between voluntary disclosures and earnings management. In our view, it implies that audit committees are engaged in impression management. Also, the results suggest that there is a positive relationship between the voluntary disclosures and cost of equity. It implies that the investors are able to know that the voluntary disclosures do not reveal strong performance by the audit committees and as a consequence, they will require a higher rate of return. Finally, for the financial analysts’ forecasting properties, it seems that they have learned that these voluntary disclosures are impression management. They are able to make better forecasting as the results suggest a negative relationship between voluntary disclosures and forecasting errors and forecasting dispersion. Overall, our results have practical implications for the regulator and policy-makers. The framing analysis of the comment letters provides evidence about the need to have a common understanding of the “investors’ needs” in the audit committee disclosure context. The qualitative study is focusing on “investors’ needs” which is a critical concern for the SEC. Also, one of the regulator’s goal is to ensure that investors maintain confidence in financial markets. Our results show that audit committees engage in impression management. This practice can have bad consequences on investors’ confidence and require the SEC intervention

What is Missing in Data Governance? Regulation, Board Oversight, and a New Role for Accountants

By 2025, the world will produce 163 Zettabytes (ZB) of data on an annual basis. Data is displacing oil as the most productive commodity. However, poor data quality costs the U.S. economy $3.1 trillion annually. Data must be properly managed through data governance. A strong data governance program does not only maximize the value of the data resulting in optimal decision making, but also minimizes risks of data breaches, lawsuits, and reputational costs. In our research, we conducted a content analysis of the data governance literature by considering both professional and academic literature. Our results showed that the U.S. does not have comprehensive legislation for data governance. First, legislative and regulatory progress has been lagging behind data security and individual rights. Second, the Securities and Exchange Commission (SEC) issued a new regulation, “The Cybersecurity Risk Management”, in 2022. It did not take a holistic approach in considering an overall data governance framework that firms should follow. Third, our content analysis revealed that the companies’ boards have not yet embraced a data governance culture. The boards have to customize and implement data governance frameworks comprised of policies, processes, roles, and responsibilities. Fourth, we found that the accounting profession has an important role in data governance. In order to play that role, it has to reinvent itself by developing new skills, especially digital skills. Our study provides several public policy implications. First, legislative bodies, including the SEC, need to set forth a holistic approach for data governance regulations. Second, the SEC needs to set a requirement for public companies to identify that component of the board of directors responsible for data governance. Third, accounting educators at universities should revise their academic programs in a way that prepares accountants for data governance roles

Safety, Efficacy, and Predictive Factors of Conventional Epithelium-Off Corneal Crosslinking in the Treatment of Progressive Keratoconus

Purpose. To report predictive factors of outcome of conventional epithelium-off corneal crosslinking (CXL) in the treatment of progressive keratoconus. Methods. This is a monocentric observational retrospective study conducted at Eye and Ear International Hospital, Lebanon. All patients with progressive keratoconus who underwent CXL between January 2008 and January 2016, with minimal 3-years follow-up were included. Primary treatment outcomes were maximum keratometry (K max), best-corrected distance visual acuity (CDVA), and failure. Failure was defined as an increase of 1.00 diopters (D) or more in K max and/or an increase of 0.1 logMAR or more in CDVA and conversion to corneal transplantation. Statistical analysis was done to identify predictors of treatment success. Univariate and multivariate analyses were performed to determine the correlations between baseline parameters and outcomes, and an equation for predicting K max and CDVA was created. Results. 156 eyes of 102 patients were enrolled. The mean age was 23.85 ± 6.52 years. Failure occurred in 31 eyes (19.87%). Gender and thinnest pachymetry did not have any impact on postoperative outcomes. Concerning the CDVA outcome, multivariate analysis showed that a better preoperative CDVA was associated with higher improvement in CDVA, and higher baseline K max and higher posterior mean K were associated with a worse outcome CDVA. Regarding postoperative K max, a higher baseline K max, a worse baseline CDVA, and a younger age were associated with less flattening postoperatively. Conclusion. CXL is a safe and effective method in treating progressive keratoconus. However, the clinical benefits can differ among patients, and in our series, a nonnegligible number of cases show a continued progression of their ectasia. Further studies to identify predictors of postoperative progression prior to the procedure could help sort out good responders to treatment