Research in Accounting Regulation最新文献

Section 404b of the 2002 Sarbanes–Oxley Act (SOX) requires auditors to attest to the effectiveness of a client's internal control over financial reporting (ICFR). In this paper, we provide an overview of key regulatory events in the implementation of the 404 internal control audit. We discuss the early years (under Auditing Standard No. 2) as well as the later years (under Auditing Standard No. 5) of the 404 audit, emphasizing areas of improvement in the efficiency and effectiveness of the audit as well as the remaining problems and challenges highlighted in PCAOB inspection reports and practice alerts. Finally, we address recent regulatory developments pertinent to the 404 audit such as Auditing Standard No. 12 and the recent 2013 update to the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) internal control framework.

Robert K. Mautz's work has influenced the accounting and auditing profession for decades. The Philosophy of Auditing and his support of applied research afford us a legacy for contemporary contemplation in research, education, and professional practice. He served on numerous committees and commissions, providing a model of service and integrity worthy of recognition.

The International Accounting Standards Board's (IASB) new international financial reporting standards (IFRS) relating to contingencies became effective on January 1, 2011, officially replacing the CICA's (Canadian Institute of Chartered Accountants) contingent liability accounting standards for publicly accountable enterprises. Although both sets of standards (IFRS and CICA) are based on fundamentally similar conceptual frameworks, they differ significantly in certain respects. This study examines the changes now required in contingency reporting and their implications for regulators. Rules for contingency reporting were previously dictated by Canadian GAAP (CGAAP), as formulated by the Canadian Institute of Chartered Accountants, but are now subject to the IASB's IAS 37. However, to enhance clarity and ease of understanding for financial statement users, the IASB has proposed a new version of contingent liability accounting standards under IFRS, titled exposure draft IAS 37. The message conveyed by the three different types of reporting is investigated, with findings that have implications for other similar rules adopted by IASB. Results indicate variations in four types of judgments by the Canadian loan officers in the experiment. Although their loan granting decisions were not influenced by the change to IASB's IAS 37, the officers charged significantly different interest premiums according to the type of financial statement received, i.e. based on former Canadian requirements, the original IAS 37 or the proposed IAS 37 exposure draft. Loan officers' judgments are therefore influenced by the way contingent liabilities are presented, a finding that has implications for regulators, mainly in view of the fact that the proposed IAS 37 reporting style could facilitate clarity and understanding of these liabilities.

This study analyzes the evolution of the Financial Accounting Standards Board (FASB)'s Statement of Financial Accounting Standards (SFAS) 141 and 142, through a detailed analysis of comment letters submitted to the FASB on Business Combinations Exposure Drafts 201 and 201 (Revised). Comment letters, an integral part of the standard-setting process, contain valuable insights on the views of parties affected by FASB's pronouncements – issuers, professional accountants and auditors, securities analysts, and others. The content analysis indicates that a majority of corporate respondents opposed the abolition of the pooling-of-interests method, not on theoretical grounds, but on the grounds that abolishing pooling would bring adverse economic consequences to their firms and industries. Letters also show strong differences in views across various groups of respondents. On the question of how goodwill should be treated once recognized, the amortization-with-impairment approach garnered significantly more support from the entire pool of respondents than the impairment-only approach, and the dominant view among most respondents, particularly audit firms, was that an impairment-only approach would not be reliable enough to be feasible in practice. These views are in sharp contrast to the FASB's eventual adoption of the impairment-only approach in SFAS 142, Goodwill and Other Intangible Assets, which suggests that the evolution of this standard was subject to forces not fully evident from, or reflected in, the comment letter process.

The PCAOB's Auditing Standard No. 7 (AS No. 7) revised guidance for Engagement Quality Reviews (EQRs). To better understand the impact of resulting changes in practice, if any, that have occurred in the nature, extent, and timing of the EQR process, and the impact of such changes on audit quality, we surveyed practicing audit partners familiar with EQRs. Results indicate that AS No. 7 changed the nature of EQRs by impacting the role and approach of the EQ Reviewer. It impacted the extent of procedures performed by the EQ Reviewer and altered communications between the EQ Reviewer and most engagement team members, but it had little impact on the timing of EQRs. Collectively, results suggest AS No. 7 changed EQRs, but such changes may not have improved audit quality. These findings provide insight to the continuing conclusion of the PCAOB that many EQ Reviewers do not fulfill their role of monitoring audit quality, and are also suggestive of opportunities to improve the EQR process.

In this article, we synthesize in annotated bibliography form, recent regulation-related findings and commentaries in the academic literature. This annotated bibliography is one in a series of bibliographies that summarize regulation-related academic research. We reviewed academic outlets such as The Accounting Review, Journal of Accounting Research, Journal of Accounting and Economics, Contemporary Accounting Research, Accounting Horizons, The Journal of Accounting, Auditing & Finance, Journal of Accounting and Public Policy, Journal of Business, Finance & Accounting, Auditing: A Journal of Practice and Theory, and Research in Accounting Regulation. We annotate results of regulation-related research studies and key points from regulation-related commentaries. The literature featured some strong regulation-related threads in 2012 including the foundations of financial reporting, the role of financial reporting in the financial crisis, accounting disclosure, financial reporting choices, international financial reporting standards, and Sarbanes–Oxley and its impact on accounting and auditing quality.

This study examines the impact of auditor dismissals and resignations on investing decisions. The study also aims to ascertain whether these decisions differ due to a reason given for the dismissal or resignation. Participants were given a scenario involving an investing decision and were first asked to assess the level of risk associated with investing in the company. Next, they were asked to allocate $10,000 between investing in the company versus a money market account. Five different questionnaires were created by varying information about an auditor switch and the reason for the switch. Results indicated that auditor switches produce higher investment risk assessments and marginally lower amounts invested than no auditor switches. Furthermore, the effects of resignations were not significantly different from the effects of dismissals. Also, disclosure of a disagreement as a reason for an auditor switch had no impact.

This paper examines early evidence of IPO registrants' disclosure exemption choices in response to the optional disclosure relief provided by the recently enacted Jumpstart Our Business Startups Act (JOBS Act) of 2012. The JOBS Act provides firms going public classified as “emerging growth companies” (EGCs) with certain accounting and financial reporting and disclosure exemptions not available to other issuers. The study's results for EGC firms filing prospectuses through August, 2013, indicate that for the earliest companies affected by the JOBS Act, greater board independence and audit committee accounting expertise are associated with greater likelihood of foregoing financial reporting exemptions. Moreover, the study finds that scaled executive compensation disclosure exemptions had widespread acceptance while the private company accounting standards and reduced audited financial statements exemption provisions were initially less utilized. Finally, the study finds that even though the JOBS Act raised the threshold for disclosure relief up to $1 billion in revenues, those firms that were already classified as smaller reporting companies which already have less extensive disclosure demands under SRC Rule #33–8876, were those most likely to initially take these exemptions. The paper discusses the practical implications of the study's findings for accounting standard-setters, watchdogs, and policy makers.