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Article
Publication date: 26 June 2019

Erin L. Hamilton, Rina M. Hirsch, Jason T. Rasso and Uday S. Murthy

The purpose of this paper is to examine how publicly available accounting risk metrics influence the aggressiveness of managers’ discretionary accounting decisions by…

Abstract

Purpose

The purpose of this paper is to examine how publicly available accounting risk metrics influence the aggressiveness of managers’ discretionary accounting decisions by making those decisions more transparent to the public.

Design/methodology/approach

The experiment used a 2 × 3 between-participants design, randomly assigning 122 financial reporting managers among conditions in which we manipulated whether the company was currently beating or missing analysts’ consensus earnings forecast and whether an accounting risk metric was indicative of low risk, high risk or a control. Participants chose whether to manage company earnings by deciding whether to report an amount of discretionary accruals that was consistent with the “best estimate” (i.e. no earnings management) or an amount above or below the best estimate.

Findings

Aggressive (income-increasing) earnings management is deterred when managers believe such behavior will cause their firm to be flagged as aggressive (i.e. high risk) by an accounting risk metric. Some managers attempt to “manage” the risk metric into an acceptable range through conservative (income-decreasing) earnings management. These results suggest that by making the aggressiveness of accounting choices more transparent, public risk metrics may reduce one type of earnings management (income-increasing), while simultaneously increasing another (income-decreasing).

Research limitations/implications

The operationalization of the manipulated variables of interest may limit the study’s generalizability.

Practical implications

Users of accounting risk metrics (e.g. investors, auditors, regulators) should be cautious when relying on such risk metrics that may be of limited reliability and usefulness due to managers’ incentives to manipulate their companies’ risk scores by being overly conservative in an effort to prevent being labeled “aggressive”.

Originality/value

By increasing the transparency of the aggressiveness of accounting choices, public risk metrics may reduce one type of earnings management (income-increasing), while simultaneously increasing another (income-decreasing).

Details

Managerial Auditing Journal, vol. 34 no. 8
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 14 May 2019

Maia Farkas, Rina Hirsch and Julia Kokina

The purpose of this paper is to examine potential determinants of management’s agreement with internal auditor recommendations of an interim assurance engagement.

Abstract

Purpose

The purpose of this paper is to examine potential determinants of management’s agreement with internal auditor recommendations of an interim assurance engagement.

Design/methodology/approach

The experiment involved a 2 × 2 × 2 design with internal auditor gender, mode of communication and root cause variables randomly assigned to 228 experienced managers.

Findings

When the internal auditor includes a root cause for an identified deficiency in an internal audit report, management perceptions of the quality of that report improve. The gender of the internal auditor who communicates the audit finding with management does not significantly impact management’s perceptions. Additionally, communicating the internal audit report via e-mail instead of videoconference results in improved managerial perceptions of the quality of the internal auditor. While improvements in perceptions of internal auditor quality lead to greater agreement with internal auditor recommendations, improvements in perceptions of report quality lead to greater implementation of internal-auditor-recommended remediation strategies.

Research limitations/implications

The operationalization of the manipulated variables of interest (communication mode, gender and root cause) may limit the generalizability of the study’s results.

Practical implications

The paper includes managerial implications for internal auditors’ choice of communication mode and inclusion of a root cause in interim internal audit reports.

Originality/value

This study provides evidence on the factors that could improve management’s perceptions of internal auditors’ work. The findings can help organizations, such as the Institute of Internal Auditors, to better understand how to address the needs of those who communicate with internal auditors.

Details

Managerial Auditing Journal, vol. 34 no. 4
Type: Research Article
ISSN: 0268-6902

Keywords

Content available
Book part
Publication date: 16 September 2014

Abstract

Details

Special Education International Perspectives: Practices Across the Globe
Type: Book
ISBN: 978-1-78441-096-4

Article
Publication date: 22 June 2012

Rina Arya

This paper aims to be a critical reflection on the author's position as a Black female academic in the academy, and comes from a motivation to raise Black consciousness…

2496

Abstract

Purpose

This paper aims to be a critical reflection on the author's position as a Black female academic in the academy, and comes from a motivation to raise Black consciousness about the importance of Black feminist scholarship.

Design/methodology/approach

The author identifies the unique position of Black feminism, which has had to define itself apart from second‐wave feminism of the 1970s, which marginalised non‐White women and the Civil Rights movement, which marginalised women. The oppression faced by Black feminists is apparent in the shifting platforms of identity that Black feminists occupy in the academy. Another obstacle is the restricted and incomplete picture of feminism in the academy, which sidelines Black feminist writing. One of the ways to raise awareness is to focus on the corpus of Black writing and to re‐position it within academic core curricula, rather than relegating it to specialised courses.

Findings

It is found that Black feminism is marginalised in the academy in scholarship and representation. It is also found that students are more receptive to ideas about feminism when approaching the subject indirectly.

Research limitations/implications

One limitation of the study is an absence of theoretical literature from a UK context.

Social implications

The paper highlights the marginalisation of Black feminism in the academy.

Originality/value

The subjects of “feminism in academia” and the representation of “Black and minority ethnics in the Academy” have been explored in scholarship. However the combination of these terms, namely the role of the Black feminist in the academy, is a comparatively unexplored subject. Hence, the originality of this paper.

Details

Equality, Diversity and Inclusion: An International Journal, vol. 31 no. 5/6
Type: Research Article
ISSN: 2040-7149

Keywords

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