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This paper aims to investigate the determinants and consequences of using disclaimer language in the banks’ audit committee (AC) reports. This study aims to analyze the factors tempting AC members of banks to disclose disclaimer language in the AC reports and the effect of such language on the cost of equity.

The data cover the period from 2006 to 2015 and considers the top US bank holding companies. Voluntary disclosure in the AC report is manually coded by using a scoring grid. Multivariate regression analysis is mainly used in the study.

The findings suggest that the ACs are using the disclaimer language to protect themselves when disclosing a high level of voluntary information that describes their oversight activities or to reduce their liability exposure due to lower financial reporting quality. The findings also reveal that investors are requiring a higher return on their investments whenever ACs use disclaimer language in their reports.

The AC report provides useful information to shareholders who evaluate the AC’s performance and accordingly vote for or against AC members on annual basis. The paper sheds lights on the motives and consequences of disclaimer language in the ACs report. Thus, the study benefits shareholders by providing empirical evidence in regard to the usage of disclaimer language. Also, the findings benefit industry, corporate governance organizations, standard setters and regulators that analyze AC disclosures and issue recommendations or new standards for improving those disclosures.

This study empirically assesses the perceptions the public has of employees and their organization following a [re]tweet, and the additional potential ameliorating effect of a disclaimer distancing the organization from the individual employee's social media presence.

A fully crossed 2 (disclaimer vs. no disclaimer) × 2 (positive vs. negative valence post) × 2 (post vs. retweet) experiment exposed participants (N = 173) to an employee's personal tweet. Resultant perceptions of both the poster (i.e., goodwill) and the poster's organization (i.e., organizational reputation) were analyzed using planned contrast analyses.

Findings reveal audiences form impressions of individuals based on both tweeted and retweeted content. Perceptions of both the poster's goodwill and the poster's organization were commensurate with the valence of the poster's tweets, stronger when posts were original tweets rather than retweets, and there was a significant interaction effect between valence and [re]tweet. Disclaimers did not significantly affect perceptions, suggesting employers may be better served by asking employees to omit reference to their employer on their personal social media accounts.

This research contributes to understanding how employee and organizational reputation are affected by employees' personal social media content. Results suggest that even when a disclaimer explicitly seeks to distance an employee from the organization, audiences still see the employee as an informal brand ambassadors of their organization.

Using China’s key audit matters (KAMs) data, this study aims to examine whether negative press coverage alleviates boilerplate KAMs.

This study uses Levenshtein edit distance (LVD) to calculate the horizontal boilerplate of KAMs and investigates how boilerplate changes under different levels of the perceived legal risk.

The findings indicate that auditors of firms exposed to substantial negative press coverage will reduce the boilerplate of KAMs. This association is more significant for auditing firms with lower market share and client firms with higher financial distress. Additionally, the authors find that negative press coverage is more likely to alleviate the boilerplate disclosure of KAMs related to managers’ subjective estimation and material transactions and events. Furthermore, the association between negative press coverage and boilerplate KAMs varies with the source of negative news.

The findings suggest that upon exposure to negative press coverage, reducing the boilerplate of KAMs has a disclaimer effect for auditors.

To provide human judgment input for computer algorithm development, this study examines the relative importance of source, content, and style cues in predicting the truthfulness ratings of two common types of online health information: news stories and institutional news releases.

This study employed a multi-method approach using (1) a manual content analysis of 400 randomly selected online health news stories and news releases from HealthNewsReview.org and (2) an online experiment comparing truthfulness ratings between news stories and news releases.

Using content analysis, the authors found significant differences in the importance of source, content, and style cues in predicting truthfulness ratings of news stories and news releases: source and style cues predicted truthfulness ratings better than content cues. In the experiment, source credibility was the most important predictor of truthfulness ratings, controlling for individual differences. Experts have higher ratings for news media stories than news releases and lay people have no differences in rating the two news formats.

It is important for health educators to curb consumer trust in misinformation and increase health information literacy. Rather than solely reporting scientific evidence, educators should focus on addressing cues people use to judge the truthfulness of health information.

This is the first study that directly compares human judgments of health news stories and news releases. Using both the breadth of content analysis and experimental causality testing, the authors evaluate the relative importance of source, content, and style cues in predicting truthfulness ratings.

This study aims to examine the effects of risk disclosure and call to action (i.e. encouraging individuals to consult a health provider before they make any purchase decision) on young adults’ cognitive and behavioral responses to dietary supplement advertising.

A 2 (risk disclosure: absence vs presence) × 2 (call to action: absence vs presence) between-subjects online experiment was conducted with 124 college-attending young adults.

Including risk disclosure in probiotic supplement advertising increased young adults’ perceived message credibility, intentions to ask a medical doctor and sense of confidence in decision-making. The addition of call to action in probiotic supplement advertising improved perceived message credibility, trust in advertised brand, favorable attitude toward brand, intention to ask a medical doctor and purchase intention; however, a significant joint effect was not found between risk disclosure and call to action.

Although risk disclosure and call to action are significant techniques in pharmaceutical and health-care marketing, they have been overlooked by both research and practice of dietary supplement marketing. This study closes this gap by providing empirical evidence to generate a clear idea about the benefits of including risk disclosure and call to action in dietary supplement advertising.

The purpose of this paper is to examine whether the voluntary implementation of an internal audit department (IAD) by municipalities has any influence on external auditors' opinions.

This study population comprises the 308 Portuguese municipalities, from which the authors extracted a sample of 179. Financial and audit reports were collected from the period under analysis (2014–2017). The sample was then divided into two groups: municipalities that had voluntarily implemented an IAD and those that had not. Internal audit departments were characterized according to their robustness – whether they were more or less robust. First, a descriptive statistical analysis of the dataset was performed to analyze the representativeness of the sample and to extract insights. To address the research questions, ordinal random effect regression models were considered.

Contrary to the authors' expectations, the voluntary implementation of an IAD had no influence on the audit report type. However, when the authors refined the approach to include the robustness of the IAD, it became clear that this variable does influence the report issued by the external auditor.

This paper contributes to the current literature by determining the effects of the robustness of IADs on municipality audit reports. As far as the authors know, this paper is novel. Since auditing plays an important role in the transparency of public financial statements and in promoting equity, this study shows that a robust IAD is an advantage in the pursuit of these goals.

This study aims to investigate whether auditors compromise their independence for economically important clients in family business settings.

The authors empirically examine the research question based on China for the years 2011 to 2020. The dependent variable is the auditors’ propensity to issue modified audit opinions, which is a proxy for auditor independence. The authors use relative client audit fees as a proxy for client importance. To address endogeneity issues in the selection of family firms, the authors use the two-stage least squares regression model and, subsequently, the propensity score matching and Hausman firm fixed effect modeling.

This study reveals that the propensity to issue modified audit opinions is positively correlated with client importance. Big-N auditors are more likely to issue modified audit opinions for their economically important family firm clients, whereas such evidence is not found for non-Big-N auditors. Results are consistent and robust to endogeneity test and sensitivity analysis.

This study enriches the literature on auditor independence and the effect of family firms’ ownership structure factors on audit reporting behavior for their economically important clients. Findings may prove useful for managers and practitioners interested in family business.

This research investigated Australian property valuers' identification and consideration of physical climate change risks in valuation practice.

Thirty Australian valuer members of the Australian Property Institute from a variety of specialisations were interviewed. The semi-structured interviews explored climate change risks and the extent of risk investigation and consideration in valuation practice. The analysis utilised the Moser and Luers (2008) climate risk preparedness framework as a lens to evaluate current valuation practice in Australia.

The analysis reflects that while physical risks are easily identified and engaged with by valuers, correspondingly, there is a lack of understanding of and engagement with, climate change risks. This supports the need for better information sources and guidance to inform valuers of climate change risks and the development of specific mechanisms for the consideration of such risks to be included in valuation processes, practices and reports.

The research was limited by its sample size and qualitative approach. Therefore, the research is not a representative opinion of the Australian profession; however, the analysis provides the perspective of a range of valuers from across Australia with different valuation specialisations.

This research has established that valuers have the potential to be prepared to address climate change in their professional capacity, as described by Moser and Luers (2008). However, they are constrained by information communication, access and detail and subsequent market awareness of information on climate change risk exposure on properties. There is a need for further support, guidance, information and tools, as well as awareness-raising, to enable valuers to accurately identify and reflect all risks affecting a property in the process of valuation.

This research provides the first investigation into the consideration of climate change in valuation practice. Property stakeholders—owners, investors, financiers and occupiers—are escalating their climate change risk analysis and reporting for property portfolios and organisations. This research suggests that valuers also need to be aware of the changing dynamics of market reporting and decision-making related to climate change risks to ensure appropriate reflection in valuation practice.

This paper aims to investigate the impact of qualified audit opinions on the returns of stocks listed at Amman Stock Exchange (ASE) after the introduction of the recent amendments by the International Auditing and Assurance Standard Board (IAASB) on audits reporting and conclusions. It further investigates if results differ between first time qualified and sequenced qualifications, and between plain qualified opinion and qualifications with going concern.

Audit opinions’ announcements and stock returns data are collected from companies’ annual reports for the fiscal years 2016 to 2019 while stock returns are computed from stock closing prices published at ASE website. The authors apply the event study approach and use the market model to calculate normal returns. Cumulative abnormal returns (CARs) and average abnormal returns (AARs) are computed for all qualified audit opinions’ announcements.

The empirical evidence suggests that investors at ASE do not react to qualified audit opinions announcements. That is, the authors find an insignificant impact of qualified audit opinion announcements on stock returns using both CAR and AAR estimates. The results are robust to first time and sequenced qualifications, and for qualifications with going concern. Results are also robust to the use of risk adjusted market model.

The insignificant impact of qualified audit opinions on stock returns have two potential conflicting research implications. First, the new amendments introduced to auditors’ report made them more informative and reduce the negative signals contained in the qualified opinions. That is, investors are now aware of the real causes of qualifications and not overreacting to the qualified opinion. Second, the documented insignificant impact confirms that ASE is not a semi-strong form efficient.

The apparent excessive use of qualifications should ring the bell on whether auditors misuse their power or companies are really in trouble. Hence, the Jordanian regulatory bodies need to warn auditors against the excessive use of qualifications on the one hand, and to raise the awareness of investors on the implications of auditors’ opinions on the other hand.

This study is innovative in twofold. First, it explores the impact of qualified audit opinions on stock returns after the introduction of new amendments by IAASB at ASE. In addition, it uses event study approach and distinguishes between first time qualified and sequenced qualifications, and between plain qualified opinion and qualifications with going concern. The results are consistent with efficient market theory and behavioral finance explanations.