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We investigate the effect of the PCAOB’s Part II report on annually inspected firms’ audit fees and audit quality. The PCAOB replaced the peer review auditor program with an independent inspection of audit firms. Upon completion of each inspection, the PCAOB issued inspection reports that include a public portion (Part I) of identified audit deficiencies, and (in most cases) a nonpublic portion (Part II) of identified quality control weaknesses. The Part II report is only made public when the PCAOB deems that remediation was insuffcient after at least 12 months have passed. Starting around the time of the 2007 Deloitte censure (Boone et al., 2015), the PCAOB shifted from a soft synergistic approach to an antagonistic approach, such that Part II reports were imminent, despite delays that ultimately led to their release one to four years later than expected. Our study spans the period from 2007 to 2015, and examines the effect on audit fees and audit quality at the earliest date that the Part II report could have been released – 12 months after the Part I report was issued. We find that following the 12 month period, that annually inspected audit firms eventually lost reputation by lower audit fees, while they concurrently made remedial efforts to increase the quality of their client’s financial reporting quality (abnormal accruals magnitude and restatements). However, three years after the Part II report was actually released, audit fees increased.

This paper empirically examines whether the order of liability and preferred stock accounts presented on the balance sheet is consistent with how the stock market values their riskiness.

This paper measures a firm’s riskiness with idiosyncratic risk and employs the first-difference design to test the relation between idiosyncratic risk and the order of current liabilities, noncurrent liabilities and preferred stock, respectively. Further, the paper tests whether operating liabilities are viewed as riskier than financial liabilities. Finally, the authors partition their sample based on the degree of financial distress and investigate whether the results differ between the two subsamples.

The paper finds that current liabilities are viewed as riskier than noncurrent liabilities and preferred stock is viewed as less risky than current and noncurrent liabilities, consistent with the ordering on the balance sheet. Further, the paper finds that operating liabilities are viewed as riskier than financial liabilities. Finally, the authors find that total liabilities and preferred stock (redeemable and convertible classes) are viewed as riskier for distressed firms than for nondistressed firms.

The authors thoroughly investigate the riskiness of several classes of claims and document that the classification of liabilities and preferred stock classes is relevant to common stockholders for assessing their associated risk.

Student evaluation of teaching (SET) questionnaires are used in many countries, although much current research questions the validity of these surveys. US research indicates that more than 90 percent of academic accounting departments use this performance measurement. This paper aims to focus on the validity of SET data.

A mail survey was sent to a random sample of 1,000 accounting professors employed at four‐year universities and colleges in the USA. A total of 447 responses were returned for a response rate of 44.7 percent. Statistical results of the survey for data are reported.

Instructors engage in impression management when SET data are used for control purposes. Dysfunctional behavior of accounting instructors includes easy grading, inflating grades, course work deflation, and other defensive strategies which result in negative social implications. A significant 53 percent of the accounting instructors knew of other professors who have reduced grading standards and course content in order to improve SET scores.

Universities worldwide risk legal action when they defame faculty members by releasing unreliable and invalid SET results.

The paper illustrates some of the present problems with SET questionnaires.

This study aims to examine whether national industry expertise in Italy is more dominant than local expertise. Prior studies from Australia, USA and UK show that audit fees for industry experts are priced at a higher premium at the local level than the national level. These countries have voluntary audit firm rotation, while Italy has mandatory audit firm rotation (MAFR). The authors predict that Italy has a stronger national than local level of industry expertise, to better retain and transfer industry expertise.

The authors compare audit fee premiums of national industry experts to local levels, using quantitative (multivariate tests) and qualitative (interviews) methodology.

Using hand-collected audit fees, the authors find that the audit fee premium for industry expertise is greater at the national level than the local level. The authors find corroborating results with audit hours. To provide further support, the authors conduct analysis for a neighboring country that does not have audit firm rotation. Using hand-collected data from Germany, the authors find that audit fee premiums from national industry expertise are no different from local industry expertise.

The present study study has theoretical and practical implications, for European Union countries, which recently adopted MAFR and for countries considering adoption in the future.

This piece takes issue with the deployment of Trotsky’s idea of uneven and combined development (UCD) in the Anglophone discipline of International Relations (IR). It argues that this strand of thought makes a theory out of what is really a theorem (a deduction from an axiom), whilst forgetting about the original, actual theory of which it was part, Leon Trotsky’s theory of permanent revolution. IR U&CD, marketed in the discipline as International Historical Sociology (IHS), posits ‘the international’ as the field to which ‘the theory’ must be applied in order to open it up to social theorisation. This is analogous to the late-19th-century subjective turn in social science in which reality is presented as unfathomable, and rationality is merely subjective, an attribute of individual ‘actors’. ‘The international’ in this sense may be compared to ‘the market’ in neoclassical economics. Although it presents itself as Marxist, the U&CD/IHS project was part of a regressive conjuncture in Anglo-American, mainstream IR, as transpires from its attempt to position itself close to the ‘English School’ in IR. I conclude with a variation on Trotsky’s original theory, applying it to the ‘permanent counterrevolution’, of which the current war on terror is the latest stage.

The purpose of this paper is to demonstrate a deeper understanding about the reasons behind difference in previous studies’ results in the field of audit quality determinants.

A meta-analysis method is employed in which 52 studies including 40 international studies from authentic scientific articles during the year 2000–2015 and 12 national studies out of authentic national scientific articles from 2001 to 2015 are taken to account as sample studies. Audit firm size, auditor tenure and auditor specialization are set as independent variables and audit quality is the only dependent variable in the current paper.

The results indicate that audit firm size and auditor specialization are positively associated with audit quality. In other words, contracting with larger audit firm and specialized auditor results in delivering higher quality audit services.

The current study is the first study to be conducted in the field of audit quality determinants. The results may be beneficial both for standard setters as well practitioners in a way that it provides evidence that contributes to basis policy and audit-standard makers about domination and determinants of audit quality.

The process performed during a financial statement audit is critical but is unobservable to external stakeholders. This can create challenges in assessing the quality of individual audit engagements. This study’s objective is to introduce and investigate an archival measure based on publicly available information that proxies for audit process ineffectiveness.

We proxy for audit process ineffectiveness using errors in the audit report. We examine audit reports to identify errors because the audit report represents the auditor’s primary communication with financial statement users and is subject to rigorous preparation and review. We first examine if typical factors influencing audit process ineffectiveness are associated with audit report errors. We then examine whether audit reports containing errors are associated with audit quality measures.

We find that errors are more likely to be present in audit reports when time pressure exists and less likely when auditors exert more effort and when audit engagement risk is higher. Results also show that errors in audit reports are positively associated with financial reporting misstatements, measured by subsequently disclosed Big R restatements and out-of-period adjustments.

Collectively, our evidence suggests that an audit report containing an error is a suitable proxy for audit process ineffectiveness. This proxy has audit quality implications because inattentiveness in one area of the audit process could indicate inattentiveness in another area.