Firm Performance Following Auditor Changes For Audit Fee Savings

This study examines stock and earnings performance subsequent to auditor changes by firms specifically for audit fees savings without any other apparent regulatory or disclosure issues. Results show that there is mild evidence of positive stock return and earnings performance after changing auditors. There is also no significant difference in company performance among different types of auditor changes when looking at auditor changes among and between Big 4 and non-Big 4 auditors. Finally, we find that the positive firm performance is mainly among auditor changes made before 2003

Trends Of Accounting Restatements During The Period 2000-2007 And Big Four/Five Auditors

The objective of this study is to provide further analysis on the trends of accounting restatements during the period 2000-07 and the role of Big four/five auditors. Given the changes in regulatory environment after the enforcement of Section 404 of the Sarbanes-Oxley Act, we find that there is a significant increase in restatements in recent years. We also find that restatements being disclosed in recent years are more serious, however, they are disclosed on a more timely basis. Consistent with the general belief that Big four/five auditors are better quality auditors, we find that they are associated with shorter restatement disclosure lags. In addition, restatements with positive financial statement effects are more likely to be disclosed sooner than those with negative effects

The Relationship Of Development Status Of Investee Countries And Investor Perceptions Of Foreign Earnings

This study investigates the impact of corporate internationalization and the development status of investee countries on the foreign earnings response coefficient (FERC), which is a measure of the value-relevance of foreign earnings. To improve competitiveness, firms worldwide have expanded aggressively into foreign markets, thereby increasing their exposure to external risks and uncertainties on the one hand, and sources of growth and reward on the other. Using a Taiwanese sample, we found that greater corporate internationalization via investments in developed countries was positively related to the foreign ERC. We expected, and found, that companies can enhance the positive effects of internationalization by investing in countries that are relatively better developed than in countries that are less well developed. The public policy implications of these findings are discussed

Business Process Automation and Managerial Accounting: An SAP Plug and Play Module

The primary aim of our project is to develop an Enterprise Resource Planning (ERP) platform that enables students at Pace to understand how different interdisciplinary areas in cross-unit and/or cross-enterprise decision making are related. ERP can help us do this since it allows a firm to automate and integrate its business processes, share common data and practices across the entire enterprise, and provide and access information in a real-time environment

Business Process Automation and Managerial Accounting: An SAP Plug and Play Module (FINAL REPORT)

The primary aim of our project is to develop an Enterprise Resource Planning (ERP) platform that enables students at Pace to understand how different interdisciplinary areas in cross-unit and/or cross-enterprise decision making are related. ERP can help us do this since it allows a firm to automate and integrate its business processes, share common data and practices across the entire enterprise, and provide and access information in a real-time environment

Do Non-Staggered Board Elections Matter to Earnings Quality and the Value Relevance of Earnings and Book Value?

Purpose: The purpose of this paper is to examine the impact of non-staggered voting for members of the board of directors on earnings quality and the value relevance of earnings and book value. Design/methodology/approach: The authors used a sample of Taiwanese firms whose board was elected as a whole every three years from 2003 to 2013. The authors used multiple regression analysis to test whether board of directors elections and corporate governance affected earnings quality and the value relevance of earnings and book value. Findings: The authors found that elections led to lower earnings quality, but better corporate governance led to greater earnings quality. In the presence of board elections, earnings have reduced value relevance but book value had increased value relevance. Finally, given board elections, the relative value relevance of earnings and book value on stock price was not fully moderated by strong corporate governance. Research limitations/implications: The results presented here indicate the importance of better corporate governance in diffusing suspicions of management occasioned by the use of discretionary accruals in years in which board elections take place. Better corporate governance regimes led to a more positive relationship of discretionary accruals to earnings persistence, even in the presence of directorial elections. Similarly, better corporate governance regimes led to a more positive relationship between earnings per share and stock prices. Limitations include the restriction of the testing locale to Taiwan. That said, many companies around the globe use non-staggered board elections. Accordingly, these results suggest issues of importance to corporate governance advocates beyond Taiwan as well. Originality/value: This study deepens the field\u27s understanding of the impact of corporate governance arrangements and schedules for electing board of directors\u27 members on issues of interest to stockholders

The Impact of Sarbanes-Oxley on Internal Control Remediation

Purpose – The purpose of this paper is to examine the determinants of internal control weakness remediation revealed under Sarbanes-Oxley (SOX) section 404 reporting requirements. Design/methodology/approach – Data on firms that reported internal control weaknesses for fiscal year 2004 are collected, and determined whether these weaknesses still existed in their 2005 filings. Logistic regression is used to examine the impact of corporate governance, resource, impediments (e.g. severity of weakness), and Big 4 auditor status on remediation completion. Findings – Resources (e.g. size, ROA) were positively associated with remediation. Use of Big 4 auditor, more audit committee meetings, more business segments, and filing lag were negatively associated with remediation, as were number and type of internal control weaknesses. Research limitations/implications – First, the paper sheds light on the individual firm factors that influence corporate response to the legal and social (e.g. public pressure) environment facing firms. Understanding this should better enable policy makers and regulators to foresee where potential lags in firm implementation of regulations may occur, and why. Second, it believes that the paper also sheds light on the relative value of different corporate governance structures in meeting investor concerns for proper stewardship of their investments. Finally, this paper provides information of use to other corporate governance researchers in that the results suggest the overwhelming importance of the legal and social environment in influencing corporate behavior. However, this paper does not address the contribution of national culture, financial and audit-related reporting requirements, and differences in firm resources, to corporate behavior. Originality/value – The paper deepens the field\u27s understanding of the determinants of internal control weakness remediation, furthering regulators\u27 understanding of SOX\u27s impact

Statistical Choices and Apparent Work Outcomes in Auditing

The public accounting sector of the accounting profession has long been very concerned with the problem of employee recruitment and retention. As early as the 1970s, the then Big 8 firms funded extensive studies of the determinants of employee turnover. The problem is no less real today. Indeed, much has been written about the problem of the vanishing accounting student. If reducing employee turnover and dissatisfaction becomes important in order for the public accounting firms to fulfill their mission of helping to assure the quality of information that investors receive, then having tools that foster an understanding of the determinants of employee dissatisfaction, stress, and turnover is vital Sheds light on these issues by demonstrating how sophisticated statistical techniques can illuminate the underlying determinants of employee turnover and other important job attitudes. Applies structural equation modeling to Collins and Killough\u27s dataset in order to demonstrate how it can provide important additional substantive insights about relationships between the stressors and job outcomes in public accounting. This important interpretive information is not available, or is available in only limited fashion, in the comparison method of canonical correlation analysis

The Effects of Personal and Group Level Factors on the Outcomes of Simulated Auditor and Client Teams

The way that auditor and client teams develop team resources that they can later use in negotiating with their counterparts is a critical but unexplored issue in auditing research. This study examines several important issues that may affect the development of these team resources. Specifically, it uses interacting groups to evaluate the dynamic interplay between personal and perceived group level factors in determining individual team members\u27 satisfaction with the team\u27s solution, and the development of perceptions of team atmosphere. First, a model of the intra-person and intra-team decision processes is introduced. This model posits that individuals\u27 personalities and hierarchical levels influence their choice of conflict style, the development of their perceptions of the team\u27s atmosphere, and ultimately their satisfaction with the solution reached by the team. Conflict style also is posited to affect perceptions of the team\u27s atmosphere and solution satisfaction. We then test the model using structural equation modeling. We also examine the development of consensus within the teams. Students working on their MBA and MS in Business and Accounting at two AACSB-accredited universities participated in this study. The results provide dramatic evidence of the influence of the factors of interest on the resources that each team brings to the ultimate negotiation with its counterpart team