Research in Accounting Regulation最新文献

The relevance-measurability tradeoff is at the very heart of accounting and auditing; typically, what is most relevant to practitioners is also notoriously difficult to measure. When it comes to auditing, the measurement of the audit quality of an auditing firm or the quality of a specific audit is subject to similar challenges.

In general, many of the most relevant and useful assessments are challenging because there appears to be “multiple determinism” involved, that is, a plethora of factors would seem to influence the assessment, many of which defy meaningful quantitative expression and measurement. We formulate the “Gresham's Law of Measurement” (similar to the so-called “streetlight effect” or “the principle of the drunkard's search”) as follows: “Easy-to-calculate quantitative metrics tend to crowd out more relevant but difficult-to-measure assessments.” Thus, succumbing to the Gresham's Law of Measurement means allowing measurability to trump meaningfulness. In other words, easily calculated quantitative metrics may provide the illusion of measurability while in actuality not being meaningful.

We use a philosophy of science approach, including concepts such as information integrity, feedback vs. measurement, static vs. dynamic measures, and look back and look-forward dimensions to evaluate and critique the 2015 Public Company Accounting Oversight Board (PCAOB) Concept Release on Audit Quality Indicators. Toward the end, we also provide a list of potential topics worthy of further examination.

Why Nations Fail (Acemoglu and Robinson 2012), a book widely and favorably reviewed by the business press (MacLeod 2013), identifies political and economic factors that allow some jurisdictions to prosper while other, often geographically and culturally similar, jurisdictions languish. The book's propositions are based on detailed case studies of countries across time and continents. The study summarized here follows a similar approach by relying on hand-collected evidence of municipalities that failed in the sense they ceased to exist as separate legal entities.¹ This evidence is used as a basis for identifying misconceptions about governments as going concerns, redefining what it means for a government to be a going concern, suggesting ways to improve disclosures related to going concern uncertainty (as redefined), and identifying questions for future policy-relevant research.

In 2015, several journal publishers retracted more than 30 papers written by Dr. James E. Hunton (Dr. Hunton) and various other co-authors. Retractions in academic literatures are not entirely rare and they are best understood in terms of their ‘chain effect’ potential impact. There is a first-order effect, namely the findings in the retracted papers are no longer reliable. A second-order effect occurs through other papers that cited and relied upon certain findings in the retracted papers. This paper sets forth the recently retracted papers. It will also be useful in identifying second-order papers to assist editors, other reviewers, and researchers who otherwise may be unaware of retraction details as they are known at this time.

This article sets forth Dr. Hunton's body of work with retractions noted. The article has several goals aimed at effective regulation of the accounting literature. First, it is a resource for researchers to determine whether a paper that they intend to cite has been retracted. Second, it encourages researchers to review and where feasible, replicate other papers authored by Dr. Hunton that have not been retracted to date in order to establish the legitimacy of those findings. Third, it encourages researchers to replicate or otherwise retest research questions in retracted papers so that reliable findings are made available to these questions. Fourth, at the second-order level, it encourages authors that have cited Dr. Hunton's papers to review their papers and where they deem it consistent with scholarly effort, restate their work. Similarly, editors of journals involved in the first- and second-order effects are encouraged to publish the additional analyses to reinforce the credibility of the literature. Fifth, an addition to the literature review process is suggested to assure that no papers in the chain of noted or cited work have been retracted. Finally and importantly, it reminds scholars of the importance of being diligent in their processes for producing, summarizing and retaining data and cross-reviewing data provided by and work completed by co-authors.

This paper advocates for the regulation of the disclosure of the information contained in directors' and officers' liability insurance policies. To prove the merit of the argument, it is demonstrated that this information meets the disclosure criteria identified in both the SEC Staff “Report on Public Company Disclosure” (2013) and the SEC disclosure concept release “Business and Financial Disclosure Required by Regulation S-K” (2016).

Many firms began implementing COSO's 2013 Internal Control–Integrated Framework in 2014. This study surveys U.S. accounting professionals, primarily from large publicly-traded firms, to examine views concerning the framework and its impact on key areas related to internal controls. The analyses provide insight into five specific topics important to the framework. First, results indicate that respondents view the 2013 Framework and its 17 principles as an overall improvement to the 1992 Framework. However, benefits and costs from implementing the framework appear mitigated because firms already had effective internal control structures in place. Second, respondents view the 17 principles as a set of rules for achieving effective internal controls, but believe the principles still provide adequate flexibility and allow for sufficient management judgment. Third, most respondents indicate changes in at least one of the five components of internal controls, as well as across information technology-related controls. Fourth, in addition to external financial reporting objectives, firms are applying the framework to non-financial, operational, and compliance objectives. Last, results indicate greater expected external audit effort related to SOX Section 404 testing but not audit fees, perhaps due to external auditors' reliance on internal audit departments' work.

This study investigates whether the Securities and Exchange Commission's Division of Corporate Finance (DCF) allocates resources toward public companies that investors perceive as having poor financial reporting quality. Resource allocation within the DCF is an important topic given the SEC's overall mission to improve disclosures and protect investors. The findings are consistent with the DCF being more likely to allocate resources toward firms that market participants perceive as having poor financial reporting quality.

This paper provides an example of how an accounting educator can build upon an intermediate accounting assignment of using practical real-world examples of earnings management by introducing to students the academic research that explains earnings management behavior. Students improve their critical thinking skills because of the connection to the real-world example. Accounting educators can provide this opportunity to students at a minimal cost of resources and time. In addition, a seed is planted for the development of the next generation of accounting academics because of this exposure to research at the undergraduate level.

This study examines the motivations that lead some firms to lobby, via comment letters, against the changes in accounting for leases proposed by FASB/IASB. There are at least three distinct motivations for a company to lobby against the proposed changes: a high perceived cost of implementation/operation, a belief that the changes will increase the cost of capital, and a desire on the part of management to avoid any administrative burden associated with the changes. Our research suggests that companies that engage in lobbying are concerned with the costs of such changes (renegotiation of debt covenants, auditor fees, change in IT systems, etc.), but they also seem to be motivated by their accounting manager's desire to avoid any additional effort that the changes will require.