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The bankruptcy of Enron and the subsequent demise of Arthur Andersen brought intense scrutiny to the accounting profession. That these events would have an effect on auditor going concern modification judgments and accounting regulation would not be surprising. This study aims to look at 1,204 publicly traded firms that filed bankruptcy in the period January 1, 1997 through December 31, 2005.

The observations are divided into pre‐Enron and post‐Enron periods. The paper finds the 18 largest bankruptcies represented 47 percent of the total assets entering bankruptcy in this period.

The going concern modification rate in the pre‐Enron period was 44.5 percent, in the post‐Enron period, 61.9 percent. Findings show auditors, in the presence of a consistent standard, nevertheless modify their decision making as a result of external events. This study further looks at the impact of outliers on this decision and on differences by firm size.

By considering the entire population of publicly traded firms filing bankruptcy, overall implications and statistics are provided. This method does not allow the use of certain traditional modeling techniques.

The research shows auditors, despite a consistent standard, vary their going concern judgments based upon external events. The paper also suggests that “one size fits all” regulatory models may not be cost effective across the population of public firms.

The research provides a summary of the characteristics of the population of firms filing bankruptcy for an extended period across a changing reporting and regulatory environment.

The purpose of this study is to explore the effect of industry specialization on the absorption and competitive pricing (or lack thereof) of audits of large Andersen clients (S&P 1500 companies) who switched to the remaining Big 4 international accounting firms in 2002 due to the demise of Arthur Andersen LLP (Andersen). Did the audit clients pay a premium or discount in audit fees to their new auditor who specialized in their industry?

Ordinary least squares regression is used to test hypothesis of a positive association between industry specialization and audit fees charged to former Andersen's audit clients in 2002 following Andersen's demise. This study provides more control over size effects by design. Test variables are constructed based on national market share of audit fees within an industry. Logistic regression is used to examine the likelihood of choosing new auditor that is an industry specialist.

Results support hypothesis, consistent with auditor differentiation explanation. Proportion of clients that had engaged an industry specialist in 2001 increased from 38 percent (84 clients) to 48 percent (105 clients) in 2002. No evidence of price‐gouging in 2002 although clients who aligned with industry specialist paid a 23.2 percent premium in audit fees. Large clients lost bargaining power to negotiate lower fees. Findings are robust to the inclusion of additional alternative measures of company size.

Results of logistic regression analysis imply that large audit clients with former auditor of tarnished reputation, long auditor tenure and high leverage are more likely to switch to an industry specialist to possibly signal audit/financial reporting quality. Large sample companies may limit the ability to generalize findings to smaller companies.

Mandatory audit firm rotation (currently being debated in the profession) will have costly effect on the pricing of Big 4 audits for companies wanting to signal audit and financial reporting quality to affect market perception, and large companies would likely lose their ability to bargain for lower audit fees.

The paper focus on the alignment of Andersen clients and impact on audit fees with Big 4 industry specialists resulting from the sudden increase in audit market concentration. Prior to Andersen's collapse, evidence on the association of audit fees premium and industry specialists was mixed, and little attention has been given to the influence of auditor industry specialization on both audit fees and alignment of former Andersen clients with a Big 4 specialist. This paper fills that void.

The objective of the study is to analyze corporate governance practices of Canadian companies in the post‐Enron period. The attempt is to investigate whether the convergence phenomenon evidenced in prior studies is limited to the minimum mandatory requirements imposed by regulators or reflects a real behavioral transformation.

Changing governance structure might be slow except in times of financial crisis, increased public scrutiny and reforms. These conditions are met in the post‐Enron period (2002 to 2005) where major reforms have been launched including the Sarbanes‐Oxley Act (SOX) in the USA and Bill 198 in Canada. The authors expect changes in corporate governance to be more important during this period, therefore, enhancing the robustness and reliability of their results. They measure corporate governance on a global scale, relying on the ROB index published by the Globe and Mail. The index distinguishes between four blocks of corporate governance, namely, board composition, compensation, shareholder rights, and disclosure.

The present results show signs of convergence. However, Canadian companies improved their corporate governance practices in the post‐Enron period mainly in areas mandated by regulation. This includes provisions related to the composition, attributes and working of the board of directors and board committees. No significant improvement is found in non‐regulated governance best practices.

Overall, the findings suggest a lack of real behavioral change in corporate leaders. Instead, convergence in corporate governance appears to be the result of a box‐checking exercise.

If corporate governance is about ethical conduct and stems from the culture and mindset of management, these results show that corporate governance cannot be regulated by legislation alone.

This study goes beyond the minimum mandatory requirements and looks into compliance of non‐regulated provisions as well. Examining the evolution of corporate governance practices on these two fronts helps to further investigate the extent and nature of convergence.

The purpose of this paper is to examine whether accounting researchers in Australia more proactively pursued government‐sponsored Australian Research Council (ARC) research funding in the post‐Enron period than researchers in other commerce‐related disciplines.

The study measures disciplinary research activity using successful Australian Research Council Linkage and Discovery grants for the period 2000 to 2008. The study identifies the number of grants received, the total dollar amount funded, the number of participating institutions, individual researchers and (where applicable) partnering organisations. Using these criteria, the study compares the success of accounting with that of banking and finance, economics and business and management.

The study highlights accounting's failure to attain comparable levels of research funding relative to other commerce‐related disciplines (both in terms of grants and dollars), even given the public profile of accounting events post‐Enron. The study reveals a significantly higher “elite institution effect” exists in accounting and lower levels of academic and commercial partnerships when compared to other disciplines. The study examines potential reasons for the lack of ARC funding won by accounting researchers.

The persistently low level of representation of accounting researchers among ARC grant winners during this period appears counterintuitive to the traditional “professional model” that links university‐based disciplinary members with practitioners. Why accounting, as a high‐profile profession diverges from this model should be of concern to researchers, universities and the accounting profession.

The study's use of comparative ARC data extends and contextualises earlier studies that have sought to examine the state of accounting research in Australia.

This paper reviews the field of internal auditing (IA) post-Enron to develop insights into how IA research has developed, offer a critique of the research to date and identify ways that future research can help to advance IA.

A structured literature review (SLR) was used to analyse 471 papers from 64 journals published between 2005 and 2018 based on a number of criteria, namely author, journal type, journal location, year, theme, theory, nature of research, research setting, regional focus, method and citations.

The IA literature has not significantly contributed to knowledge of the internal audit function (IAF), and one still knows relatively little about the factors that contribute to making the impact of IA practice effective and measurable. The IA literature is US-dominated (authors and journals), focussed on the American context (publicly listed companies), reliant on positivist analyses and largely makes no explicit reference to theory. Central regions (emerging economies) and key organisational settings (private SMEs and not-for-profit organisations) are largely absent in prior IA research. This paper evaluates and identifies avenues through which future research can help to advance IA in order to address emerging challenges in the field.

This is the first comprehensive review to analyse IA research in the post-Enron period (2005–2018). The findings are relevant to researchers who are looking for appropriate research outlets and emerging scholars who wish to identify their own research directions.

The purpose of this paper is to examine the effects of audit failure on Big 4 audit firm monitoring activities. The paper analyzes changes in discretionary accruals (DAs) among clients of firms implicated in audit failure events and examines whether these DAs decline in the period following the event.

The paper uses archival data and regression analyses to test whether DAs for clients of implicated audit firms decline in the period following the audit failure as compared to clients of other Big 4 firms. Audit failures are identified during the years 1996‐2004 based on significant lawsuit settlements. The paper focuses on an office‐level analysis to control for audit quality differences which may vary across firm geographic locations as suggested by recent research.

Empirical results indicate that auditor response to audit failure has changed over time. Auditors implicated in audit failure events occurring in the post‐Enron and Sarbanes‐Oxley period enforce more conservative accounting choices in the year following the event. Specifically, clients of the implicated firm's office report a significant decline in discretionary accounting accruals relative to clients of other auditors in the same city location. However, a significant change in client discretionary accounting accruals is not found following audit failures that occurred prior to 2001, the year of the Enron bankruptcy.

The results of this paper extend the knowledge of the effects of litigation pressure on audit quality. Additionally, this paper helps address the question of how large‐scale audit failures witnessed at the beginning of the century have impacted audit firm conservatism.

The purpose of this paper is to examine factors influencing the accounting students' career choice in public accounting practices.

Multinomial logistic regression is used to analyze survey data of 214 accounting students from three universities in Hong Kong. Three dependent variables are: pursue a career in public accounting (CPA); general accounting; and a non‐accounting careers.

Results support the TRA model. The two constructs in the model – “intrinsic factors” (attitude toward the behavior) and “parental influence” (subjective norm), make significant and independent contributions to predicting the career choice of accounting students. Results indicate that “intrinsic factors” and “parental influence” have significant influence on the decision whether to select a CPA career. This result is not consistent with the New Zealand study and the Canadian study. Neither the “financial rewards factor” nor the “high school accounting” factor is an influencing factor on the career choice in the post‐Enron. This result is also in contrast to the findings of the literature in the pre‐Enron. The fact that financial rewards variable has no influence on career choice is an interesting finding. There may be a “cultural” factor in Hong Kong linked to the prestige of professions that may outweigh the financial rewards factor. “Flexibility of career options” factor has the highest influencing power among all the variables, possibly influenced by the US Sarbanes Oxley enactments that result in a buoyant job market, and China's convergence with the International Financial Reporting Standards in 2007. Females dominate over males in entering the CPA career or general accounting career.

The support of the TRA model in this paper could be applied as a useful theoretical framework to examine other accounting areas.

The Hong Kong Institute of Certified Public Accountants and the Big 4 firms should exercise more efforts to improve the traditional accountants' negative image as boring and methodical so as to attract bright students to enter the accounting profession.

The lack of using a theoretical model and prior studies' limitations make any inferences drawn and generalizations difficult. This paper represents the first to the author's knowledge to use the theory of reasoned action (TRA) model from the social psychological literature to examine the issues into the Hong Kong environment.

This paper explores the contribution of the AAA Symposium on Ethics Research in Accounting to fostering accounting ethics research. For a 17-year period, the contributors, their schools of affiliation, and their research topics were analyzed to determine the extent of and trends in accounting ethics research. The research rankings of the contributing authors were examined in business ethics journals, top-40 accounting journals, and accounting education journals. Institutional rankings identify supportive places to do accounting ethics research. The impact of significant accounting scandals such as Enron and Madoff was examined and a financial scandal “bump” in paper presentations was found. Authors affiliated with Texas schools had papers following the state requirement of an ethics accounting course. A large amount of ethics education-related research was also presented at the Ethics Symposia. Overall the study results indicate that the Symposium with its AAA affiliation is a high-quality venue for paper presentation.

The purpose of this paper is to examine whether companies engage in earnings management during the specific years when convertible bonds are issued and redeemed; also to determine if any differences exist in earnings management when convertible bonds are issued domestically or abroad.

Discretionary current accruals are adopted as proxies for earnings management and the regression models are used to control the related variables.

The empirical results indicate that companies conduct earnings management in the years when convertible bonds are issued, and that there is no significant difference between earnings management when convertible bonds are issued in Taiwan or abroad. However, data after 2001 indicate that companies issuing convertible bonds abroad perform less earnings management compared to those issuing convertible bonds domestically. The results show no significant difference in earnings management in the years when convertible bonds are redeemed; the reasons may be due to the relatively small sample size and that the majority of convertible bonds are still outstanding.

This paper advances findings from previous studies, that firms conducting seasoned equity offerings manage earnings upward to increase the offering proceeds. This paper highlights the linkage between convertible bonds and earnings management. Conducting an integrated analysis of the relationship between convertible bonds and earnings management, it aims to provide a better understanding of the process.

The purpose of this paper is to study the role of corporate governance in abnormal returns around announcements of seasoned equity offerings (SEOs) by publicly traded US firms from 2001 to 2004.

Cross‐sectional regression analysis was used to determine which variables are important to the market's reaction to the SEO, with a particular focus on corporate governance variables.

It was found that investors react more positively for firms in which different people hold the CEO and board chairman positions. Limited evidence was found that investor reaction is more positive when the board has a greater representation of outside directors, the CEO has less ownership, and the board is not too large. These findings suggest that investors react more favorably to SEOs by firms with stronger corporate governance mechanisms that reduce adverse selection or agency problems.

This paper's findings are evidence that stronger boards can reduce a firm's cost of raising additional equity capital. Originality/value – There is not believed to be any other published paper that examines the impact of corporate governance mechanisms on the reaction to SEOs with such a comprehensive sample or in post‐Enron periods.