Advances in Accounting最新文献

This study examines the association between ethical leadership and environmental activity management (EAM) [environmental activity analysis (EAA), environmental activity cost analysis (EACA) and environmental activity-based costing (EABC)] and the mediating role of employee environmental empowerment in such an association. Data was collected using an online survey questionnaire from 400 middle and lower-level Australian managers. The results reveal that the relationship between ethical leadership and EAM transpires indirectly, with ethical leadership found to be positively associated with employee environmental empowerment which in turn, exhibits a positive association with the use of all three levels of EAM (EAA, EACA and EABC). Such findings highlight the importance of ethical leadership as a means of enhancing employee environmental empowerment, and subsequently increasing the extent of use of EAM. Accordingly, organisations should endeavour to encourage ethical leadership through leadership training programs and/or the recruitment of appropriate ‘ethical’ leaders. In addition, as employee environmental empowerment fully mediates the association between ethical leadership and the extent of use of EAM, organisations should look to enhance employee environmental empowerment through providing employees with greater opportunities: to discuss and be involved with the development of new environmental management practices; to be actively involved in the development, management and evaluation of environmental management practices; and/or to be involved in strategic decision making regarding environmental management practices.

U.S. employers, including the Big Four accounting firms, are increasingly using gig economy platforms to hire accounting labor. One factor that employers may consider when hiring accountants in the gig economy is the CPA license. The CPA license has two potential roles: 1) a licensing role, which enables the license holder to perform exclusive jobs; and 2) a certification role, which signals that the license holder is a high-quality accountant. Although prior research finds that CPAs earn a wage premium in the traditional economy, it is unclear whether this relationship will hold in the gig economy. CPA-privileged jobs may not be available in the gig economy, thereby diminishing the importance of the licensing role. Furthermore, unlike the traditional economy, the gig economy has sophisticated reputational feedback systems that provide detailed information about a worker's prior job performance, which could substitute to some extent for the CPA license as a signal of accountant quality. Using a novel dataset, I find that CPAs earn a wage premium in the gig economy when they and their non-CPA counterparts have no reputational feedback. However, the CPA wage premium diminishes in the presence of reputational feedback and disappears in the presence of negative reputational feedback, indicating that reputation can substitute to some extent for the CPA license as a signal of accountant quality. These results have significant implications for accountants, institutions that issue credentials, and academic research related to licensing, certification, and signaling.

This study examines whether more capable managers affect the cost of equity capital. After controlling for standard risk factors and firm characteristics, we find that higher managerial ability is associated with a lower implied cost of equity. Moreover, our results show that the negative association between managerial ability and the cost of equity capital is more pronounced for firms with high information asymmetry among investors, with less institutional ownership, and with high capital intensity. The results are robust to a variety of sensitivity tests, including change specifications, an instrumental variable approach, and alternative measures of managerial ability.

We posit that lender monitoring increases the general outcomes of borrowers' tax avoidance while reducing opportunistic tax aggressive behaviors. We identify four lender related monitoring measures that could affect borrowers' tax planning. We find firms with a larger portion of loan shares held by lead lenders, with loans led by reputable lenders, and with a single lending relationship to have more tax avoidance and less tax aggressiveness, and firms with loan sales that weaken lenders' monitoring incentives to have less tax avoidance and more tax aggressiveness. We further find the lender monitoring effect on tax planning to be more pronounced for firms closer to financial distress and bankruptcy.

In this study, we examine the impact of advice shared on an online tax community and taxpayer decision making. Online tax communities are linked to major tax preparation software and provide a way for taxpayers to ask unique questions and receive responses. While online communities are intended to facilitate the transmission of unbiased advice between individual taxpayers, the quality, content, and source of responses can greatly vary. Drawing on the predictions of expectancy violations theory (EVT), we investigate two facets of provided advice: response provider expertise and response language concreteness. Our results indicate that taxpayers report more conservatively (more aggressively) when presented with advice from a deemed tax expert if concrete language (abstract language) is used. Further, we find that taxpayers' perceived usefulness of the response mediates this relationship. Collectively, we contribute to EVT and provide evidence on the recognition and use of online tax community responses.

Work-Life Balance (WLB) continues to be a concern of audit professionals because the long work-hours environment can have negative effects for both individuals and organizations. Audit firms have continuously committed to helping employees with the creation of work-life balance and well-being programs. The purpose of this study is to determine whether the firm's official commitment to work-life balance is reflected in supervisors' evaluation of subordinates. This study conducts a between subjects experiment using actual audit supervisors as participants to capture responses to ways that a hypothetical staff person might pursue WLB. As part of this, a hypothetical non-financial WLB metric used as part of the formal performance evaluation process is examined as a potential tool for strengthening the effectiveness of audit firm investments in WLB. The results show that WLB alternatives still have negative career consequences, and these consequences would not be mitigated by the use of a formal WLB performance evaluation metric. Although career consequences of WLB are not significantly related to gender, performance evaluation is not gender neutral.

Hong (2023) provides both an analytical model and empirical archival evidence to explain why CEOs hold vested own-firm shares when doing so comes at the cost of reduced CEO portfolio wealth diversification. I discuss Hong (2023) in terms of the intuition provided by its analytical model and the inferences one can draw from its empirical results. Moreover, I briefly discuss (the lack of) multi-methods research in accounting and consider how accounting scholars can add insight to the cross-disciplinary literature on executive power and contracting.

This paper examines CEOs' holding and trading of unconstrained firm stock they own, i.e., vested and sellable firm shares. I first develop a theoretical model of why CEOs hold sellable shares in their own firm when doing so is riskier than holding a more diversified portfolio. In this model, greater stock ownership allows the CEO to exercise discretionary power more easily and extract rents from the company. My model predicts that CEOs desire to hold more firm stock and therefore are less likely to sell stock when they have greater discretionary power. This empirical prediction is supported by tests that measure discretionary power based on the principal component analysis of three proxies. Using stock trading data in S&P 1500 firms, I find that discretionary power is negatively (positively) associated with the CEO's stock sale (purchase). The results are weaker in industries where rent extraction is more difficult. Further, results hold for both founder and non-founder CEOs, and are robust to a battery of sensitivity tests. Overall, this study provides new insights concerning CEOs' decisions to own their companies' stock.

Regulators have invested considerable energy into developing analytical tools to better detect earnings management. We propose that firms in similar life cycle stages (LCSs) face similar strategic concerns, managerial pressures, growth prospects, etc., and that the commonality in these factors contribute to the “normal” accruals generating process. Consistent with this prediction, we simulate various earnings management conditions and find that accruals models are misspecified in detecting manipulation within particular LCSs; in particular, introduction, shakeout, and decline firms are over-identified as manipulators, while growth and mature firms are under-identified as manipulators when LCS is not used to estimate accruals. Weighted average performance across life cycle stages reveals that LCS estimation of discretionary accruals substantially improves successful detection and reduces Type I errors relative to other grouping alternatives. The combined improvement across both Type I and Type II errors is over 70% for both the modified Jones and discretionary revenue models of accruals-based earnings management.

In an effort to make audit reports more informative to financial statement users, the Public Company Accounting Oversight Board (PCAOB) requires an expanded audit report in which auditors are required to disclose critical audit matters (CAMs). The new standard (AS 3101) became effective for audits of financial statements of large accelerated filers for fiscal years ending on or after June 30, 2019. Using a sample of annual reports of large accelerated filers with and without CAM disclosures, we examine the costs and benefits of the mandatory disclosure of CAMs in auditors' reports. Our evidence suggests that compared to auditor reports reporting no CAMs, the presence of a single CAM disclosure in the auditor's report provides incremental information to equity investors without a significant increase in audit costs. However, using the benchmark of a single CAM disclosure, multiple CAMs in an auditor's report results in higher audit fees and longer audit delays.