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This paper aims to uncover the practices of different privacy auditors to reveal the extent of any similarities in such practices. The purpose is to investigate the drivers of practices used by privacy auditors and to identify potential for improvements in the practice of privacy auditing so that privacy audits may better serve stakeholders.

Six semi-structured interviews with seven privacy auditors and regulators and an analyst across Australia, Canada, New Zealand and the USA are used as the basis for our analysis.

The study shows that some privacy auditors view privacy as an organizational issue, which means that all staff within an organization should understand the privacy issues that are relevant to the organization and to its customers. Because this practice goes beyond a mere compliance approach to privacy auditing, it indicates that there is a way to avoid the approach of merely applying standards from national data privacy laws which is an approach that has been subject to criticism because it is not applicable to the current situation of global applications and cross-border data. The interview themes demonstrate that privacy audits face significant challenges, such as the lack of a privacy auditing profession and the difficulty of raising the awareness of organizations and individuals regarding information privacy rights and duties.

Privacy auditing is mostly unexplored by academic research and little is known about the drivers behind the practice of privacy auditing. This study is the first to document the views of privacy auditors regarding the practices that they use. It also presents novel results regarding the drivers of the practice of privacy auditing and the interests of the beneficiaries of privacy audits. It builds on research that argues for the existence of best practices for privacy (Toy, 2013; Toy and Hay, 2015) and it extends this argument by providing reasons why privacy auditors may benefit from the use of best practices for privacy.

The purpose of this study is to examine the relationship between going-concern (GC) opinions issued by the Big 4 audit firms and adverse credit ratings from the two largest credit rating agencies (CRAs) – Standard & Poor’s (S&P) and Moody’s. This question is relevant because there have been suggestions that auditors and CRAs should become more similar to each other, and because the two largest CRAs have different ownership structures that could affect their ratings.

Univariate and multivariate analyses are performed using a sample of firms that filed for bankruptcy between January 1, 2002 and December 31, 2013 that also had an audit opinion signed during the 12 months prior to bankruptcy, along with a credit rating issued by either or both S&P and Moody’s. Both influence each other. The likelihood of an auditor issuing a GC opinion is related to the credit rating issued by both S&P and Moody’s in the month prior to the audit report signing. The results also show differences between the CRAs. S&P reacted in the month after an auditor issued a GC opinion by downgrading its ratings 68% of the time. However, Moody’s did not react as strongly as S&P, downgrading its ratings only 24% of the time.

Both audit reports and credit ratings influence each other. The likelihood of an auditor issuing a GC opinion is related to the credit rating issued by both S&P and Moody’s in the month prior to the audit report signing. The results also show differences between the CRAs. S&P reacted in the month after an auditor issued a GC opinion by downgrading its ratings 68% of the time. However, Moody’s did not react as strongly as S&P, downgrading its ratings only 24% of the time.

Auditors are more likely to issue GC opinions when there is a downgrade to the credit rating, and CRAs are more likely to downgrade their ratings when there is a GC opinion. The study highlights that CRAs with different ownership structures provide different credit rating outcomes.

Changes to the auditor’s report have been proposed and issued internationally to provide more relevant information to users and enhance the perceived value of financial statement audits. This paper aims to investigate the impact of audit reporting changes on audit quality and audit fees in the New Zealand context.

The authors examined audit quality measured by absolute abnormal accruals and audit fees for New Zealand listed companies.

The evidence suggests the enhanced audit reports were followed by an improvement in audit quality as proxied by a reduction in absolute abnormal accruals upon the adoption of the new audit reporting requirements. There was also a significant increase in audit fees.

Although the new auditor reporting requirements are associated with improvements in audit quality, such benefit does not come without cost.

The study provides evidence about the impact of this recent substantial reform to auditing.

The purpose of this study is to investigate whether audit quality is associated with the speed with which managers revise earnings forecasts to arrive at the actual earnings through the lens of the auditor selection theory. This study examines this relationship in a unique institutional setting, Japan, where nearly all managers disclose earnings forecasts.

The authors pioneer an empirical proxy to capture the speed of management forecast revisions based on well-established principles from the finance and disclosure literatures. This proxy is tested alongside other disclosure proxies (namely, accuracy, frequency and timeliness) to assess the influence of audit quality on managerial forecasting behavior.

This empirical analysis shows that forecast revision speed is higher for firms that select higher-quality auditors. While firms that select higher-quality auditors revise forecasts in a more timely fashion, these firms revise less frequently. Moreover, the authors find that the influence of audit quality on forecast revisions is asymmetric. Specifically, the analysis of downward forecast revisions shows that higher-quality auditors are associated with firms that disclose bad news via forecasts revisions faster, more frequently and in a more timely fashion. However, the analysis of upward forecast revisions shows that higher-quality auditors have no effect on the speed with which firms disclose good news via forecast revisions, even though they are associated with less frequent but more timely forecast revisions. These findings have important implications for prior studies that consistently document an asymmetric response of the stock market to good news and bad news.

The authors provide evidence on the relationship between audit quality and management earnings forecasts using a novel and intuitive measure that captures forecast revision speed. This measure speaks to the growing interest in understanding the notion of speed and timing of voluntary disclosures. This study provides a more robust and comprehensive measure of the speed with which managers revise their earnings forecasts to arrive at the actual earnings. Furthermore, this study is among the first to document an asymmetric effect of audit quality on the type of news disclosed in forecast revisions.

This study examines the effect of employees' perceptions of political connections on performance measurement systems (PMS) design choice and firm performance. In addition, this study explores the moderating effect of social networking, a very common and widely used factor by domestic and foreign multinational firms operating in China, and its joint effect with political connections or PMS design choice on firm performance. We collected survey responses from a sample of 110 managers from manufacturing firms in China. Our results reveal that highly politically connected managers use nonfinancial measures, leading to improved firm performance. Our results suggest that social networking interacts significantly with political connections, and nonfinancial and financial measures on firm performance. The theoretical and practical implications of our findings are discussed.

The Chinese Government encourages firms to diffuse their operational-level environmental management (EM) into their organization’s mission and strategy to develop strategic EM to promote sustainable development. The purpose of this paper is to utilize two concepts of institutional theory (isomorphic pressures and decoupling behavior) to assess how different institutional forces arising from Chinese macro-level factors (market pressure, business turbulence, legal voids, carbon policy, structural-level governmental interference and guanxi with government) influence the efficacy of strategic EM.

In partnership with a major consulting firm in China, the authors collect multi-informant survey data from 183 manufacturing firms drawn from a variety of industries for testing the hypotheses posited.

The efficacy of strategic EM in the sampled firms is confirmed by the positive association with environmental performance. The authors also find that the efficacy of strategic EM is weakened by market pressure, business turbulence and legal voids, whereas it is strengthened by structural-level governmental interference. However, carbon policy and guanxi with government do not impact it significantly.

To extend the findings on the environmental importance of strategic EM, future research can develop and validate a management framework to guide the adoption of strategic EM. With regard to the four valid macro-level factors influencing the efficacy of strategic EM, future research can identify the reasons (e.g. conflict with corporate functions) behind them to aid manufacturers to mitigate their negative influence or enhance the positive influence on strategic EM.

China’s Government and its manufacturers (or those sharing a similar institutional environment) can expand the scope of their EM efforts from operational-level EM practices to strategic EM. The findings on the valid macro-level factors have led to practical suggestions for government bodies and manufacturers to improve the efficacy of strategic EM adoption. Overall, the implications help achieve the higher levels of firm-level environmental performance and alleviate the global pollution problem.

A particular value of this work lies in the demonstration of combining institutional theory (organization decoupling, isomorphic pressures) with practical consideration such as guanxi with government in the particular institutional environment of China to help address an important and context-related problem, environmental performance.

The authors examine whether Chinese banks use loan loss provisions (LLPs) for capital management, income smoothing and signaling purposes, and assess the effect of the recent regulatory changes following the implementation of Chinese Basel III on such behavior.

The authors use a unique set of hand-collected data on bank capital combined with financial data downloaded from the China Stock Market and Accounting Research (CSMAR) database. Multivariate regression models are used to test our hypotheses.

The authors find that while there is no evidence to suggest capital management practice before the Chinese Basel III, the implementation of the new regulations induced listed banks to manage tier-1 capital via LLPs. The authors also find strong support that Chinese banks engage in income smoothing via LLPs management, and there is no change in such tendency following the issuance of Chinese Basel III. Lastly, the authors do not find support for the signaling behavior by Chinese banks using LLPs.

The authors’ evidence suggests that elevated tier-1 capital and provisioning requirements may induce capital management by banks, which indicates a potential unintended effect brought forth by the new Basel regulations.

To the best of authors’ knowledge, this study is the first to examine Chinese banks' behavior relating to LLPs in terms of capital management, income smoothing and signaling. In particular, the authors use a sample containing a large number of Chinese commercial banks – previously a major data issue in other studies.

The purpose of this paper is to offer a theoretical and empirical understanding of how social ties affect innovation behavior and new product performance in Turkey, which is an emerging economy where high levels of economic and political uncertainties exist.The authors examine whether innovation behavior binds the political and business ties of the firm to new product performance. They also examine if these effects are contingent on variations in the institutional environment and market environment.

Structural equation modeling and mediation analyses were used on a sample of 344 small- and medium-sized enterprises in Istanbul.

Business ties are positively related to exploratory innovation behavior and political ties hamper such behavior. The authors also show that government support hinders firms’ disruptive innovation while encouraging incremental innovation behavior. The authors further demonstrate that the positive and indirect relation of business ties to new product performance through exploratory and exploitative innovation is largely insensitive to changes in market and institutional environments. Political ties are negatively (positively) and indirectly related to new product performance through exploratory (exploitative) innovation.

Managers should choose the form of their personal interactions (political and/or business) based on the type of innovation that is being pursued. Additionally, managers should consider both the institutional environment and the market environment as important contingencies in their decision of whether to invest resources in developing social ties to build innovation behavior.

The authors offer a deeper perspective of how social ties in emerging economies affect new product performance by considering exploratory and exploitative innovation behavior as mediating mechanisms. These mediating effects are conditional on institutional and market environments.