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1 – 10 of 510Kelsey Kay Dworkis and S. Mark Young
This study examines the effects of narcissism and bonus-based incentive plans on managerial decision-making performance. Using an experiment, the authors first examine decision…
Abstract
This study examines the effects of narcissism and bonus-based incentive plans on managerial decision-making performance. Using an experiment, the authors first examine decision choices under two levels of an incentive threshold (high and low). Narcissism is measured using the Narcissistic Personality Inventory (NPI). Typically, the NPI is used as a single monolithic construct in analyses; however, in this study, the authors subdivide it in two ways to gain more nuanced information about its impact on decision making. First, the authors split the NPI into three levels – high, medium, and low (Hascalovitz & Obhi, 2015), and then decompose it into its adaptive and maladaptive components (Campbell, Hoffman, Campbell, & Marchisio, 2011) to examine how these subdivisions affect performance. Results show that the different levels of incentive thresholds affect performance among narcissistic individuals. Results indicate that individuals higher in narcissism and higher in levels of adaptive and maladaptive narcissism outperform their low-trait counterparts in a lower-threshold environment, but not in a high threshold environment.
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Casey J. McNellis, John T. Sweeney and Kenneth C. Dalton
In crafting Auditing Standard No.3 (AS3), a primary objective of the PCAOB was to reduce auditors' exposure to litigation by raising the standard of care for audit documentation…
Abstract
In crafting Auditing Standard No.3 (AS3), a primary objective of the PCAOB was to reduce auditors' exposure to litigation by raising the standard of care for audit documentation. We examine whether the increased documentation requirements of AS3 affect legal professionals' perceptions of audit quality and auditor responsibility in the event of an audit failure. Our experiment consists of a 3 × 2 between-participants design with law students serving as proxies for legal professionals. The results of our experiment indicate that when an audit procedure, namely the investigation of inconsistent evidence, is not required to be documented, legal professionals perceive the performance of the work itself but not its documentation to significantly increase audit quality and reduce the auditor's responsibility for an audit failure. When documentation of the procedure is required, as per AS3, legal professionals perceive enhanced audit quality and reduced auditor responsibility only if the performance of the work is documented.
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I use a controlled experiment to examine, in the context of Corporate Social Responsibility (CSR) crises, whether investors' investment judgments are influenced by a firm's CSR…
Abstract
I use a controlled experiment to examine, in the context of Corporate Social Responsibility (CSR) crises, whether investors' investment judgments are influenced by a firm's CSR reputation and CSR crisis response strategy. I find that for good CSR reputation firms, the use of a rebuild or deny crisis response strategy does not lead to improvements in investment judgments. However, for bad CSR reputation firms, the use of a deny response strategy leads to improvements in investment judgments while the use of a rebuild strategy does not.
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Dona Cady, Matthew Olson, Peter Shea and J.M. Grenier
Since the prevalence of virtual worlds in society has grown exponentially in recent years and virtual worlds have demonstrated an incredible power to engage participants in ways…
Abstract
Since the prevalence of virtual worlds in society has grown exponentially in recent years and virtual worlds have demonstrated an incredible power to engage participants in ways in which traditional education has not, virtual worlds provide us an excellent opportunity to create engaging, collaborative, and academically challenging learning situations. Also, given the new media literacy of many of younger students, we in higher education are in many ways meeting them where they already are …or should be. By integrating virtual worlds into instruction, the Virtual Education Research Group (VERG) at Middlesex Community College in Massachusetts provides students with these collaborative experiences. Through a sustained community of practice and experimentation with a variety of virtual world platforms including ActiveWorlds, World of Warcraft, Warhammer, City of Heroes Architect, Forbidden City, and Second Life, some general principles and specific learning activities emerge for instructors integrating virtual worlds into the classroom. The basic concepts of connecting with technical and administrative support, choosing a world with thematic connections to your subject, creating scheduled opportunities to play and learn together, and committing to providing a strong online presence have been expanded upon to create a flexible model that can be applied across disciplines. Through the work of VERG at Middlesex Community College, virtual worlds are now used in a variety of instructional disciplines, ranging from humanities to psychology to business. Several case studies illustrating unique and effective practices are provided.
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There are probably very few college management teachers, industry trainers, or organisation development specialists that have heard of Hamburger University. Believe it or not…
Abstract
There are probably very few college management teachers, industry trainers, or organisation development specialists that have heard of Hamburger University. Believe it or not, Hamburger University really does exist in Elk Grove Village, Illinois and it is a very large operation. You guessed it — Hamburger University is the international training centre for McDonald's Corporation and since its establishment in the basement of a Chicago restaurant in 1961, it has graduated almost 20,000 McDonald's managers and franchisees.
Mark D. Sheldon and J. Gregory Jenkins
This study empirically examines perceptions of environmental report believability based on a firm's relative performance and level of assurance obtained on environmental…
Abstract
Purpose
This study empirically examines perceptions of environmental report believability based on a firm's relative performance and level of assurance obtained on environmental activities under the recently clarified and recodified attestation standards in the United States.
Design/methodology/approach
The paper uses a 2 × 3 between-subjects experiment to identify differences in 153 non-expert environmental report users' perceptions of report believability based on positive or negative firm performance and (level of) assurance provided by an accounting firm.
Findings
Results show a main effect in that negative performance reports are perceived to be more believable than positive performance reports, as driven by negative performance reports being significantly more believable when no assurance is present. The firm performance effect is eliminated once limited or reasonable assurance is provided. Further, positive performance reports with limited, but not reasonable, assurance are perceived to be more believable than reports without assurance. No differences are identified within the negative performance condition.
Practical implications
Limited assurance might be used as an impression management tool to enhance the believability of positive performance environmental reports. Users, practitioners, and standard-setters should also be aware that users might believe environmental reports are assured, even when no such assurance has been provided.
Originality/value
This paper examines the impact of assured environmental reporting on users that review firms' environmental reports outside of a shareholder/investor role. The study also demonstrates conditions in which firm performance and assurance impact perceptions of report believability.
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Bita Mashayekhi, Ehsan Dolatzarei, Omid Faraji and Zabihollah Rezaee
This study aims to identify the intellectual structure of expanded audit reporting (EAR), offers a quantitative summation of prominent themes, contributors and knowledge gaps and…
Abstract
Purpose
This study aims to identify the intellectual structure of expanded audit reporting (EAR), offers a quantitative summation of prominent themes, contributors and knowledge gaps and provides suggestions for further research.
Design/methodology/approach
This research uses various bibliometric techniques, including co-word and co-citation analysis for EAR science mapping, based on 123 papers from Scopus Database between 1991 and 2022.
Findings
The results show EAR research is focused on Audit Quality; Auditor Liability and Litigation; Communicative Value and Readability; Audit Fees; and Disclosure. Regarding EAR research, Brasel et al. (2016), article is the most cited paper, Bédard J. is the most cited author, Laval University is the most influential university, The Accounting Review is the most cited journal and USA is the leading country. Furthermore, the results show that in common law countries, in which shareholder rights and litigation risk is high, topics such as disclosure quality and audit litigation have been addressed more; and in civil legal system countries, which usually favor stakeholders’ rights, topics of gender diversity or corporate governance have been more studied.
Practical implications
This research has practical implications for standard setters and regulators, who can identify important, overlooked and emerging issues and consider them in future policies and standards.
Originality/value
This paper contributes to the literature by providing a more objective and comprehensive status of the accounting research on EAR, identifying the gaps in the literature and proposing a direction for future research to continue the discussion on the value-relevance of EAR to achieve more transparency and less audit expectation gap.
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Md Mustafizur Rahaman, Md Moazzem Hossain and Md. Borhan Uddin Bhuiyan
The new audit regulation for disclosure of key audit matters (KAMs) in financial reporting has been introduced in both developed and developing countries. This study investigates…
Abstract
Purpose
The new audit regulation for disclosure of key audit matters (KAMs) in financial reporting has been introduced in both developed and developing countries. This study investigates the influence of three distinctive sets of variables, namely industry features, firm characteristics and auditor attributes, on the extent, pattern and level of disclosure of KAMs by companies listed in Bangladesh, an emerging economy.
Design/methodology/approach
The study uses qualitative and quantitative research approaches to investigate the pattern of disclosure of KAMs and their determinants. With a sample of 447 firm-year observations from companies listed on the Dhaka Stock Exchange over 2018–2020, the study reveals industry-level, firm-level and auditor-specific characteristics that affect KAMs' communication in the new audit reporting model.
Findings
The findings suggest that significant differences exist between firms in the number and types of KAMs reported and the extent of their disclosure. The study findings also observed variations both within and across different industry sectors. Highly regulated firms disclose a greater number of KAMs, while environmentally sensitive firms are found to provide a greater detail of the issues presented as KAMs. Further, both firm size and age positively impact the number of KAMs disclosed and the extent of the disclosure provided. Big-4-affiliated auditors do not issue a significantly higher number of KAMs but deliver extensive details to their KAMs description, compared to non-Big-4 auditors. In addition, while auditors, in general, tend to issue boilerplate KAMs, Big-4 associates are found to disclose more new KAMs. However, audit fees and auditor rotation do not influence KAMs disclosure.
Research limitations/implications
This study is based on two years of publicly available data. However, future studies could consider in-depth interviews to explore the motivation behind KAMs' disclosure in Bangladesh and other developing countries with similar cultural and contextual values.
Practical implications
These findings have substantial policy considerations for improving firms' audit quality and, thus, their financial reporting quality, with implications for national and international standard-setters, regulators and other stakeholders.
Originality/value
This study is one of the earliest endeavours to investigate KAMs in a context of an emerging country, such as Bangladesh, which adopted KAMs' disclosure in 2018.
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Thanyawee Pratoomsuwan and Orapan Yolrabil
This study examines the effects of key audit matter (KAM) disclosures in auditors' reports on auditor liability in cases of fraud and error misstatements using evaluators with…
Abstract
Purpose
This study examines the effects of key audit matter (KAM) disclosures in auditors' reports on auditor liability in cases of fraud and error misstatements using evaluators with audit experience.
Design/methodology/approach
The experiment is conducted using 174 professional auditors as participants.
Findings
The participating auditors assess higher auditor liability when misstatements are related to errors rather than when they are related to fraud. In addition, the results also demonstrate that KAM disclosures reduce auditor liability only in cases of fraud and not in cases of errors. Together, the results support the view that KAM reduces the negative affective reactions of evaluators, which in turn, reduce the assessed auditor liability.
Research limitations/implications
This study did not analyze the setting in which auditors who act as peer evaluators had an opportunity to discuss the case among their peers, which may have affected their judgments.
Practical implications
The results of KAM disclosures on auditor liability in cases of error and fraud misstatements inform auditors that, different from the auditors' concern that disclosing KAM may increase auditors' legal risk, it tends to decrease or at least have no impact on the liability judgment.
Originality/value
This study contributes to the accounting literature by adding findings on another aspect of KAM in different audit settings, particularly, in the Thai legal environment with different types of undetected misstatements. The current conflicting results on how KAM disclosures affect auditor liability warrant further investigation of this issue in other audit contexts in different countries.
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