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Article
Publication date: 22 March 2011

Ning Du and Kevin Stevens

The purpose of this paper is to investigate how accountants interpret verbal uncertainty expressions with a focus on numeric‐to‐verbal translation.

1281

Abstract

Purpose

The purpose of this paper is to investigate how accountants interpret verbal uncertainty expressions with a focus on numeric‐to‐verbal translation.

Design/methodology/approach

Accounting for loss contingencies (SFAS 5) were chosen as a setting to study this research question. The approach used was a behavioral experiment where participants choose probability phrases for 11 numeric probabilities for two default conditions.

Findings

The results indicate a clear pattern, where thresholds for accrual and disclosure decisions can be easily identified in the numeric‐to‐verbal translation. Also, the base rate appears to affect the assessment of the uncertainty related to potential default, but does not affect mapping of numeric values to verbal terms.

Research limitations/implications

The use of 11 probabilities does not cover all regions of the [0, 1] probability line and may leave regions of the probability interval not mapping to any SFAS 5 phrase. Also, this study uses upper‐level undergraduate accounting students, whose judgments are similar to novice auditors but may differ from experienced auditors.

Practical implications

The evidence suggests that unlike verbal‐to‐numeric translation, which is unstable and context dependent, numeric‐to‐verbal translation is quite consistent among individuals, and is unlikely to be affected by the contextual information. The results complement prior findings in auditors' judgment, and suggest that interpreting uncertainty expressions can be improved if auditors are encouraged to use numeric‐to‐verbal translation when they apply accounting and auditing standards in forming an opinion on the financial report.

Originality/value

This is the first paper to examine the mapping of numeric probabilities to verbal probability terms.

Details

Managerial Auditing Journal, vol. 26 no. 3
Type: Research Article
ISSN: 0268-6902

Keywords

Abstract

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-0-76231-239-9

Article
Publication date: 2 November 2015

Ning Du, Kevin Stevens and John McEnroe

This paper aims to understand the effects of different presentation formats on nonprofessional investors’ judgments. Both International Financial Reporting Standards and…

2324

Abstract

Purpose

This paper aims to understand the effects of different presentation formats on nonprofessional investors’ judgments. Both International Financial Reporting Standards and US Generally Accepted Accounting Principles require an entity to present items of net income and other comprehensive income (OCI) either in one continuous or in two separate, but consecutive, statements but limited understanding exists about their differential effects on evaluation of company performance.

Design/methodology/approach

To investigate this research question, we used a two (Financial Position) x two (Format) randomized between-subjects experiment. Ninety-four graduate students assumed the role of investor and participated in this study.

Findings

Results of the experiment suggest that participants are more likely to incorporate OCI information presented in the one-statement format than in the two-statement format. Further analysis suggests that participants both assign more weight to OCI and perceive OCI to be relatively more important in the one-statement format than in the two-statement format, especially when the entity suffers an economic loss.

Originality/value

Results from this study provide evidence to the Financial Accounting Standards Board and International Accounting Standards Board that should be useful in evaluating the effectiveness of alternative comprehensive income reporting formats and should be of interest to accounting rule-making bodies, investors, publicly traded entities and financial analysts, among others.

Details

Accounting Research Journal, vol. 28 no. 3
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 26 August 2014

Ning Du, John E. McEnroe and Kevin Stevens

The purpose of this paper was to examine whether a less precise (or imprecise) estimate may increase investors’ confidence and improve investors’ perceptions of fair value…

2719

Abstract

Purpose

The purpose of this paper was to examine whether a less precise (or imprecise) estimate may increase investors’ confidence and improve investors’ perceptions of fair value reliability. The main criticism of fair value accounting has been its lack of reliability perceived by investors.

Design/methodology/approach

A 2 × 3 randomized experiment was used where management incentive and information precision are manipulated.

Findings

The results from this study indicate that perceived reliability is jointly affected by management’s incentives and information precision. Reliability rating is the highest for fair value stated as a point estimate with a specified confidence level attached to it. Further analysis indicates that higher perceived reliability is related to its representational faithfulness because participants perceive that a point estimate with a specified confidence level better matches uncertainty in measuring future cash flows.

Originality/value

This is the first study to examine whether a less precise (or imprecise) estimate may increase investors’ confidence and improve investors’ perceptions of fair value reliability. Because of the subjectivity and uncertainty in fair value estimates, less precise fair value estimates may not be viewed as less reliable. In fact, using a precise format to represent fair value estimates may not be appropriate (neither reliable nor credible), because a precise point estimate fails to capture its underlying uncertainty in future cash flows. A less precise format could represent a credible choice for fair value because it reflects uncertainty and subjectivity and effectively communicates management’s assessments of variability in future cash flows.

Details

Accounting Research Journal, vol. 27 no. 2
Type: Research Article
ISSN: 1030-9616

Keywords

Content available
Article
Publication date: 7 September 2015

Ellie (Larelle) Chapple

386

Abstract

Details

Accounting Research Journal, vol. 28 no. 2
Type: Research Article
ISSN: 1030-9616

Book part
Publication date: 27 October 2016

Alexandra L. Ferrentino, Meghan L. Maliga, Richard A. Bernardi and Susan M. Bosco

This research provides accounting-ethics authors and administrators with a benchmark for accounting-ethics research. While Bernardi and Bean (2010) considered publications…

Abstract

This research provides accounting-ethics authors and administrators with a benchmark for accounting-ethics research. While Bernardi and Bean (2010) considered publications in business-ethics and accounting’s top-40 journals this study considers research in eight accounting-ethics and public-interest journals, as well as, 34 business-ethics journals. We analyzed the contents of our 42 journals for the 25-year period between 1991 through 2015. This research documents the continued growth (Bernardi & Bean, 2007) of accounting-ethics research in both accounting-ethics and business-ethics journals. We provide data on the top-10 ethics authors in each doctoral year group, the top-50 ethics authors over the most recent 10, 20, and 25 years, and a distribution among ethics scholars for these periods. For the 25-year timeframe, our data indicate that only 665 (274) of the 5,125 accounting PhDs/DBAs (13.0% and 5.4% respectively) in Canada and the United States had authored or co-authored one (more than one) ethics article.

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-78560-973-2

Keywords

Content available
Article
Publication date: 26 August 2014

M. Azizul Islam

486

Abstract

Details

Accounting Research Journal, vol. 27 no. 2
Type: Research Article
ISSN: 1030-9616

Content available
Article
Publication date: 2 November 2015

Ellie (Larelle) Chapple

470

Abstract

Details

Accounting Research Journal, vol. 28 no. 3
Type: Research Article
ISSN: 1030-9616

Book part
Publication date: 20 January 2010

Richard A. Bernardi and David F. Bean

This research is a 6-year extension of Bernardi's (2005) initial ranking of the top ethics authors in accounting; it also represents a broadening of the scope of the…

Abstract

This research is a 6-year extension of Bernardi's (2005) initial ranking of the top ethics authors in accounting; it also represents a broadening of the scope of the original data into accounting's top-40 journals. While Bernardi only considered publications in business-ethics journals in his initial ranking, we developed a methodology to identify ethics articles in accounting's top-40 journals. The purpose of this research is to provide a more complete list of accounting's ethics authors for use by authors, administrators, and other stakeholders. In this study, 26 business-ethics and accounting's top-40 journals were analyzed for a 23-year period between 1986 through 2008. Our data indicate that 16.8 percent of the 4,680 colleagues with either a PhD or DBA who teach accounting at North American institutions had authored/coauthored one ethics article and only 6.3 percent had authored/coauthored more than one ethics article in the 66 journals we examined. Consequently, 83.2 percent of the PhDs and DBAs in accounting had not authored/coauthored even one ethics article.

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-84950-722-6

Article
Publication date: 8 April 2021

Zonghua Liu, Yulang Guo, Junyun Liao, Yanping Li and Xu Wang

Despite past studies revealed the positive effect of corporate social responsibility (CSR) on consumer advocacy behavior, little research has paid attention to employee…

Abstract

Purpose

Despite past studies revealed the positive effect of corporate social responsibility (CSR) on consumer advocacy behavior, little research has paid attention to employee advocacy behavior. This research aims to examine the relationship between CSR and employee advocacy behavior, the mediating role of meaningful work as well as the moderating effect of person–supervisor fit on CSR perception – meaningful work relationship.

Design/methodology/approach

This study used 263 employee samples to examine the relationship between CSR and employee advocacy behavior and its influence mechanism. Hierarchical regression analyses and bootstrap approach were applied to analyze the data.

Findings

The results show that CSR perception is positively related to employee advocacy behavior, meaningful work mediates the link between CSR perception and employee advocacy behavior, and the strength of the relationship between CSR perception and meaningful work depends on person–supervisor fit.

Research limitations

This study only investigated the effect of perceived CSR on employee advocacy behavior, future studies should explore the alternative mediation mechanism through which external/internal CSR perception or different CSR dimensions influence employee advocacy behavior.

Practical implications

This study has practical implications for organizational managers. First, firms should undertake CSR practices and make employee interpret them in a right way. Second, meaningful work is of significance for employees and training and development, challenging jobs and job rotation are conducive to create a sense of meaning in employees’ work.

Originality/value

This study discussed how and when CSR influences employee advocacy in the Chinese context.

Details

Chinese Management Studies, vol. 16 no. 1
Type: Research Article
ISSN: 1750-614X

Keywords

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