Advances in Accounting最新文献

This study empirically examines the timeliness of financial reporting as an important qualitative characteristic of useful financial information within the context of United Kingdom (UK) charities. Using 8490 UK charitable companies (67,014 observations) during 2007–2018, we find that charities relying more on donation income take a shorter time to file accounts. Moreover, we observe that charities operating in more competitive donation markets are more inclined to provide timely financial disclosures. Similar to for-profit organizations, charities tend to delay their financial statements filings when reporting deficit, negative equity, low liquidity, and high leverage. In addition, our analysis shows that charities with higher accruals quality, unqualified audit opinions, and subject to audits by industry-specialized auditors publish their annual accounts earlier. Our findings have important implications for charities, donors as critical stakeholders, regulators, and scholars.

This research explores how accounting and HR employees perceive the value of managerial accounting and HR practices in their organizations. Our study was restricted to participants employed in publicly listed organizations allowing us to explore how their perceptions equate with objectively measured firm performance. In total, 186 employees completed a series of measures exploring their perceptions of managerial accounting practices and the value of using HR as a measurement tool. Further, we regressed our accounting and HR measures on financial, non-financial, and market-based aspects of corporate performance. Our findings reveal that compared to accounting employees, HR employees place a higher value on using HR metrics and diagnostic styles of managerial accounting systems. Further, internal accounting and HR systems impact firm performance and corporate information environment. Our research has practical implications for strategic policy makers within publicly listed corporations that influence accounting and HR organizational cultures.

Research shows that in practice, supervisors without any constraints to their compensation setting behavior often tend to provide lenient performance evaluations to employees. Economic theory criticizes this outcome because leniency is thought to provide lower motivation to exert effort for low and medium as well as high performers. To provide incentives for employees to exert effort, economic theory calls for a distributed compensation approach that ensures employee performance differences lead to compensation differences. This call ignores insights from psychology and specifically from social determination theory (SDT). Using a real-effort experiment, we find that lenient evaluations lead to lower performance than distributed evaluations when performance is measured precisely. However, lenient evaluations lead to higher effort and performance than distributed evaluations when employee performance is measured imprecisely. We show, using a process model, that the positive effect of leniency for imprecise performance measurement on employee performance results from higher levels of task enjoyment, consistent with SDT. Our findings suggest that organizations need to consider the leniency of compensation as well as performance measurement precision jointly to achieve optimal employee effort and performance.

Analysts' earnings forecasts exclude other comprehensive income (OCI). However, OCI affects firm value on a dollar-for-dollar basis and can enhance investors' assessments of the riskiness of firms' equity capital. Focusing on financial firms and using analysts' book value per share (BVPS) forecasts as a proxy for forward-looking information about OCI, we examine whether analysts provide information about future OCI via BVPS forecasts, whether investors respond to BVPS innovations (which should include OCI innovations), and whether such innovations are more useful to investors in financial firms with difficult-to-value financial assets. We find evidence consistent with: 1) Analysts' BVPS forecasts generally conveying at least some information about future OCI; and, 2) The market responding to whether firms miss analysts' consensus BVPS expectations (which should include OCI expectations), with stronger evidence for firms with larger holdings of difficult-to-value financial assets. The evidence supports the intuition that analysts provide at least some information about future OCI in their BVPS forecasts.

This study examines whether allowing select analysts private access to management before an IPO affects analyst consensus building and subsequently post-IPO stock return volatility. The 2012 Jumpstart Our Business Startups (JOBS) Act creates many exemptions to reduce the cost of going public for smaller issuers that qualify as an Emerging Growth Company (EGC). One set of provisions allows analysts affiliated with an EGC's underwriters to communicate privately with management and potential investors before the IPO. Using a sample of IPOs during 2001–2022, we find that the dispersion in affiliated analysts' initiation forecasts is significantly higher for EGCs than similar IPOs in the pre-JOBS period. A path analysis reveals that the JOBS Act indirectly contributes to the heightened post-IPO stock return volatility through the mediating role of forecast dispersion among affiliated analysts. Our exploratory analyses suggest that more significant variations in affiliated analysts' social connections and their workload tend to be associated with higher forecast dispersion. Overall, our findings indicate that having privileged access to management could reduce consensus among analysts, which can increase post-IPO stock return volatility in EGCs.

I organize my discussion of “Impact of Audit Committee Social Capital on the Adoption of COSO 2013” by Farah, Islam, Tadesse & McCumber (2023) around the following themes: the use of board interlocks vs. comprehensive board social connectiveness ties in prior literature, the use of other methodologies (i.e. survey, interviews) to augment findings and provide a source of issues where audit committee members confer with their social networks, and lastly how future studies can use a similar framework to examine the role that audit committee network ties have in disseminating information.

Using data on audit adjustments, this study examines the relation between Chinese listed companies' strategic change and their auditor's behavior. We find that levels of audit clients' strategic change are positively associated with the magnitude of audit adjustments and audit fees, suggesting that auditors exert greater effort, and propose larger audit adjustments, on these audits. We argue that during a client’ strategic change, auditors rely less on prior experience with the client, and increase their perceived risk of the audit. Further results show a positive correlation between clients' strategic change and the experience level of auditors assigned to the client by the audit firm. We also find evidence that levels of strategic change are negatively associated with pre-audit financial reporting quality, indicating that auditors' perceived risk for clients undergoing strategic change is consistent with clients' real financial reporting risk. Evidence on regulatory sanctions suggests that audit adjustments mitigate the positive association between clients' strategic change and the likelihood of those clients' being sanctioned. Taken together, these results suggest that auditors incorporate clients' strategic change into their assessment of client risk and implement appropriate responses to that risk, and that audit adjustments help companies avoid regulatory sanction.

This paper analyzes analysts' questions in conference calls to make inferences about how analysts acquire information. Using two complementary techniques, I develop several measures of the specificity of analysts' questions. I predict and find that analysts ask more specific questions if they enter the call with poor information. The firm's information environment improves after a call in which most analysts ask specific questions. Additional analyses show that managers respond defensively to specific questions and attempt to deemphasize these questions by putting them later in the calls. Furthermore, investors react negatively to calls in which most questions are specific. Overall, this study provides insights into the roles of conference calls in analysts' processes and offers a method to analyze interactions between managers and analysts.