Pub Date : 2021-11-08DOI: 10.2308/horizons-2020-113
A. Reinstein, Philip M. J. Reckers
This article reports on an experimental examination of rationalization and socialization phenomenon among CPAs. Rationalizations represent the cognitive justifications that individuals use to morally disengage their internal norms. Neutralizations are rationalizations made before and influencing the decision. Socialization within an organization represents the tactics used by a corrupting influence, such as a superior providing neutralizations to persuade subordinates to be complicit in corruption. Neutralization and Socialization are fundamental first steps facilitating normalization of organizational corruption. We find that exposure to neutralizations increases unethical intentions despite cautions against falling prey to them. This result is robust to two different morally intense and practically relevant ethical cases: signing off on non-completed tasks and facilitating premature revenue recognition. We also advance evidence that for many participants the influence of provided rationalizations is unconscious. The effects of exposure to neutralizations were robust among Millennials and Gen Xers, but not among Baby Boomers.
{"title":"The Effects of Exposing CPAs to Rationalizations Conscious and Unconscious Outcomes","authors":"A. Reinstein, Philip M. J. Reckers","doi":"10.2308/horizons-2020-113","DOIUrl":"https://doi.org/10.2308/horizons-2020-113","url":null,"abstract":"This article reports on an experimental examination of rationalization and socialization phenomenon among CPAs. Rationalizations represent the cognitive justifications that individuals use to morally disengage their internal norms. Neutralizations are rationalizations made before and influencing the decision. Socialization within an organization represents the tactics used by a corrupting influence, such as a superior providing neutralizations to persuade subordinates to be complicit in corruption. Neutralization and Socialization are fundamental first steps facilitating normalization of organizational corruption. We find that exposure to neutralizations increases unethical intentions despite cautions against falling prey to them. This result is robust to two different morally intense and practically relevant ethical cases: signing off on non-completed tasks and facilitating premature revenue recognition. We also advance evidence that for many participants the influence of provided rationalizations is unconscious. The effects of exposure to neutralizations were robust among Millennials and Gen Xers, but not among Baby Boomers.","PeriodicalId":51419,"journal":{"name":"Accounting Horizons","volume":" ","pages":""},"PeriodicalIF":2.5,"publicationDate":"2021-11-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47686344","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-11-01DOI: 10.2308/horizons-2020-101
Diane J. Janvrin, T. Wang
Due to recent high-profile cybersecurity breaches and increased practitioner and regulatory attention, organizations are under pressure to consider the accounting implications of these attacks and develop appropriate responses. Specifically, cybersecurity events may affect organizations’ operations, financial and non-financial performance, and ultimately its stakeholders. To address how cybersecurity issues may affect accounting, this paper presents an Event, Impact, Response Framework to discuss current research and consider implications for both practitioners and researchers. The Framework highlights how practitioners may rely on research findings to better assess cybersecurity threats, understand their impact, and develop response strategies. Results encourage additional research examining how (1) organizations identify cybersecurity threats, incidents, and breaches, (2) cybersecurity affects different risks, and (3) management responses to cybersecurity risks and events. Further, the Framework suggest the need for cybersecurity research to extend beyond the AIS community to areas such as financial accounting, managerial accounting, and auditing.
{"title":"Linking Cybersecurity and Accounting: An Event, Impact, Response Framework","authors":"Diane J. Janvrin, T. Wang","doi":"10.2308/horizons-2020-101","DOIUrl":"https://doi.org/10.2308/horizons-2020-101","url":null,"abstract":"Due to recent high-profile cybersecurity breaches and increased practitioner and regulatory attention, organizations are under pressure to consider the accounting implications of these attacks and develop appropriate responses. Specifically, cybersecurity events may affect organizations’ operations, financial and non-financial performance, and ultimately its stakeholders. To address how cybersecurity issues may affect accounting, this paper presents an Event, Impact, Response Framework to discuss current research and consider implications for both practitioners and researchers. The Framework highlights how practitioners may rely on research findings to better assess cybersecurity threats, understand their impact, and develop response strategies. Results encourage additional research examining how (1) organizations identify cybersecurity threats, incidents, and breaches, (2) cybersecurity affects different risks, and (3) management responses to cybersecurity risks and events. Further, the Framework suggest the need for cybersecurity research to extend beyond the AIS community to areas such as financial accounting, managerial accounting, and auditing.","PeriodicalId":51419,"journal":{"name":"Accounting Horizons","volume":" ","pages":""},"PeriodicalIF":2.5,"publicationDate":"2021-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48279456","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-10-29DOI: 10.2308/horizons-2020-047
Ying (Julie) Huang
Surveys and field studies find that high-performing teams are diverse teams. Diverse teams value different perspectives and encourage the participation of team members through psychological safety, leading to higher team performance. This paper argues that team diversity is an office-level characteristic that is distinguishable from other characteristics studied in the prior auditing literature and that has an incremental effect on audit quality. I find a positive association between team diversity and audit quality that is robust to controlling for other audit office and client characteristics. Further, this positive association is stronger for more complex and non-routine audit engagements. These findings should be of interest to regulators who regulate how the auditing industry attracts and retains talent worldwide. In addition, these findings should be informative to audit committees who make auditor selection decisions and to investors and accounting researchers interested in the relation between audit team personnel and audit quality.
{"title":"The Association between Audit Office Team Diversity and Audit Quality","authors":"Ying (Julie) Huang","doi":"10.2308/horizons-2020-047","DOIUrl":"https://doi.org/10.2308/horizons-2020-047","url":null,"abstract":"Surveys and field studies find that high-performing teams are diverse teams. Diverse teams value different perspectives and encourage the participation of team members through psychological safety, leading to higher team performance. This paper argues that team diversity is an office-level characteristic that is distinguishable from other characteristics studied in the prior auditing literature and that has an incremental effect on audit quality. I find a positive association between team diversity and audit quality that is robust to controlling for other audit office and client characteristics. Further, this positive association is stronger for more complex and non-routine audit engagements. These findings should be of interest to regulators who regulate how the auditing industry attracts and retains talent worldwide. In addition, these findings should be informative to audit committees who make auditor selection decisions and to investors and accounting researchers interested in the relation between audit team personnel and audit quality.","PeriodicalId":51419,"journal":{"name":"Accounting Horizons","volume":"24 1","pages":""},"PeriodicalIF":2.5,"publicationDate":"2021-10-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138536915","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
COSO has developed frameworks for firms to improve their internal controls with the objective of reducing fraud and managing enterprise risk. The frameworks are widely used by firms and their auditors to comply with the internal control requirements of the Sarbanes-Oxley Act (SOX). We investigate two issues involving the most recent COSO internal control framework (COSO 2013): the determinants of a firm's decision to adopt it in a timely manner; and the consequences of adoption on internal controls. In our sample, firms that report internal control problems under SOX 404, especially firms with information technology (IT) problems, are likely to be late adopters. Regarding the consequences of adoption, for late adopters, we find that firms using the revised COSO framework have a lower probability of reporting weaknesses in IT-related controls. We also find evidence that COSO 2013 adoption is helpful in remediating internal control weaknesses.
{"title":"The Adoption and Consequences of COSO 2013","authors":"Amanuel F. Tadesse, G. Rosa, R. Parker","doi":"10.2308/horizons-18-123","DOIUrl":"https://doi.org/10.2308/horizons-18-123","url":null,"abstract":"COSO has developed frameworks for firms to improve their internal controls with the objective of reducing fraud and managing enterprise risk. The frameworks are widely used by firms and their auditors to comply with the internal control requirements of the Sarbanes-Oxley Act (SOX). We investigate two issues involving the most recent COSO internal control framework (COSO 2013): the determinants of a firm's decision to adopt it in a timely manner; and the consequences of adoption on internal controls. In our sample, firms that report internal control problems under SOX 404, especially firms with information technology (IT) problems, are likely to be late adopters. Regarding the consequences of adoption, for late adopters, we find that firms using the revised COSO framework have a lower probability of reporting weaknesses in IT-related controls. We also find evidence that COSO 2013 adoption is helpful in remediating internal control weaknesses.","PeriodicalId":51419,"journal":{"name":"Accounting Horizons","volume":" ","pages":""},"PeriodicalIF":2.5,"publicationDate":"2021-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41900962","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this study, we examine whether external auditors assess corporate innovation activities when considering a financially distressed client's ability to continue as a going concern. Using patent count, patent market value, and patent citation to measure the firm-level innovation output, we document that higher quantity and quality of innovation activities are associated with a lower likelihood of going concern opinions. The association between innovation and going concern opinions is more pronounced for audit offices with high exposure to corporate innovation and clients operating in R&D-intensive industries. In additional analyses, we confirm that innovation is associated with future business value, as measured by future profitability and intellectual property licensing agreements. We conclude that corporate innovation represents a mitigating factor when auditors consider whether a going concern opinion is appropriate for a financially distressed client.
{"title":"Corporate Innovation and the Auditor's Assessment of Going Concern","authors":"Feng Guo, Adi Masli, Yang Xu, Joseph H. Zhang","doi":"10.2308/horizons-18-087","DOIUrl":"https://doi.org/10.2308/horizons-18-087","url":null,"abstract":"In this study, we examine whether external auditors assess corporate innovation activities when considering a financially distressed client's ability to continue as a going concern. Using patent count, patent market value, and patent citation to measure the firm-level innovation output, we document that higher quantity and quality of innovation activities are associated with a lower likelihood of going concern opinions. The association between innovation and going concern opinions is more pronounced for audit offices with high exposure to corporate innovation and clients operating in R&D-intensive industries. In additional analyses, we confirm that innovation is associated with future business value, as measured by future profitability and intellectual property licensing agreements. We conclude that corporate innovation represents a mitigating factor when auditors consider whether a going concern opinion is appropriate for a financially distressed client.","PeriodicalId":51419,"journal":{"name":"Accounting Horizons","volume":" ","pages":""},"PeriodicalIF":2.5,"publicationDate":"2021-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45106737","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-10-01DOI: 10.2308/horizons-2020-194
Shana M. Clor-Proell, Nerissa C. Brown, Stephen R. Stubben, B. White, Elizabeth Blankespoor, Elizabeth A. Gordon, Mahendra R. Gujarathi, E. Henry, Kenneth J. Merkley
In October 2019, the Financial Reporting Policy Committee of the Financial Accounting and Reporting Section of the American Accounting Association submitted a comment letter to the Financial Accounting Standards Board regarding the accounting for certain identifiable intangible assets acquired in a business combination and subsequent accounting for goodwill. This paper summarizes the content of the comment letter and discusses opportunities for future research on intangible assets that may inform accounting standard-setting decisions.
{"title":"Response to the FASB Invitation to Comment Identifiable Intangible Assets and Subsequent Accounting for Goodwill","authors":"Shana M. Clor-Proell, Nerissa C. Brown, Stephen R. Stubben, B. White, Elizabeth Blankespoor, Elizabeth A. Gordon, Mahendra R. Gujarathi, E. Henry, Kenneth J. Merkley","doi":"10.2308/horizons-2020-194","DOIUrl":"https://doi.org/10.2308/horizons-2020-194","url":null,"abstract":"In October 2019, the Financial Reporting Policy Committee of the Financial Accounting and Reporting Section of the American Accounting Association submitted a comment letter to the Financial Accounting Standards Board regarding the accounting for certain identifiable intangible assets acquired in a business combination and subsequent accounting for goodwill. This paper summarizes the content of the comment letter and discusses opportunities for future research on intangible assets that may inform accounting standard-setting decisions.","PeriodicalId":51419,"journal":{"name":"Accounting Horizons","volume":" ","pages":""},"PeriodicalIF":2.5,"publicationDate":"2021-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49621306","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The purpose of this paper is to encourage and support academic research related to U.S. state and local government financial reporting. We provide an overview of U.S. state and local governments and their financial reporting, discuss sources of government data available to researchers, review key streams of academic research on governmental financial reporting, and suggest opportunities for future research in this area.
{"title":"Overview of U.S. State and Local Government Financial Reporting: A Reference for Academic Research","authors":"Won Jung Kim,Marlene A. Plumlee,Stephen Stubben","doi":"10.2308/horizons-18-158","DOIUrl":"https://doi.org/10.2308/horizons-18-158","url":null,"abstract":"The purpose of this paper is to encourage and support academic research related to U.S. state and local government financial reporting. We provide an overview of U.S. state and local governments and their financial reporting, discuss sources of government data available to researchers, review key streams of academic research on governmental financial reporting, and suggest opportunities for future research in this area.","PeriodicalId":51419,"journal":{"name":"Accounting Horizons","volume":"10 1","pages":""},"PeriodicalIF":2.5,"publicationDate":"2021-09-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138536947","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Blockchain technology is increasingly emerging as an important organizational phenomenon, especially for collaboration across firm boundaries. Over the past three decades, accounting scholars have shown significant interest in management accounting and control mechanisms that are used by actors to sustain inter-organizational relationships. We outline fundamental technical features and limitations of permissioned blockchain technology and analytically propose blockchain as an empirical concept with implications for management accounting practices that underpin inter-organizational collaboration, trust, control, and information exchange. Particular focus of the analysis is on the interplay between the technical capabilities of blockchain technology and inter-organizational management control procedures. Based on this analysis, we develop a series of propositions that theorize how these procedures affect the way in which blockchain is enacted in IORs, and how they are affected by blockchain in turn. The paper concludes with a research agenda for accounting scholars and offers directions for further research.
{"title":"Blockchain technology, inter-organizational relationships and management accounting: A synthesis and a research agenda","authors":"Nikola Kostić, Tomaz Sedej","doi":"10.2308/horizons-19-147","DOIUrl":"https://doi.org/10.2308/horizons-19-147","url":null,"abstract":"Blockchain technology is increasingly emerging as an important organizational phenomenon, especially for collaboration across firm boundaries. Over the past three decades, accounting scholars have shown significant interest in management accounting and control mechanisms that are used by actors to sustain inter-organizational relationships. We outline fundamental technical features and limitations of permissioned blockchain technology and analytically propose blockchain as an empirical concept with implications for management accounting practices that underpin inter-organizational collaboration, trust, control, and information exchange. Particular focus of the analysis is on the interplay between the technical capabilities of blockchain technology and inter-organizational management control procedures. Based on this analysis, we develop a series of propositions that theorize how these procedures affect the way in which blockchain is enacted in IORs, and how they are affected by blockchain in turn. The paper concludes with a research agenda for accounting scholars and offers directions for further research.","PeriodicalId":51419,"journal":{"name":"Accounting Horizons","volume":" ","pages":""},"PeriodicalIF":2.5,"publicationDate":"2021-09-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47782531","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-09-17DOI: 10.2308/horizons-2020-103
Amanda M. Convery, Matthew Kaufman, Terry D. Warfield
Successful standard-setting outcomes require some level of acceptance by diverse stakeholder groups. This study examines the evolution of FASB due process institutions since Enron, which have the potential to engender stakeholder acceptance. The prior literature on accounting standard-setting outcomes often focuses on the effects of individuals, organizations, or established due process institutions. Our study highlights the critical role played by recent due process institutions such as enhanced advisory groups, transition resource groups, field tests, and post-implementation reviews in contemporary standard-setting activity. Advisory groups, in particular, shift the balance of power within standard-setting to give a stronger voice to specific stakeholders (e.g., investors, not-for-profits, and private companies) and sometimes provide a recruiting network for future FASB members. We synthesize the growing importance these due process institutions have for effective standard-setting outcomes with the academic literature to identify areas for future research.
{"title":"STAKEHOLDER ENGAGEMENT AND EFFECTIVE STANDARD-SETTING","authors":"Amanda M. Convery, Matthew Kaufman, Terry D. Warfield","doi":"10.2308/horizons-2020-103","DOIUrl":"https://doi.org/10.2308/horizons-2020-103","url":null,"abstract":"Successful standard-setting outcomes require some level of acceptance by diverse stakeholder groups. This study examines the evolution of FASB due process institutions since Enron, which have the potential to engender stakeholder acceptance. The prior literature on accounting standard-setting outcomes often focuses on the effects of individuals, organizations, or established due process institutions. Our study highlights the critical role played by recent due process institutions such as enhanced advisory groups, transition resource groups, field tests, and post-implementation reviews in contemporary standard-setting activity. Advisory groups, in particular, shift the balance of power within standard-setting to give a stronger voice to specific stakeholders (e.g., investors, not-for-profits, and private companies) and sometimes provide a recruiting network for future FASB members. We synthesize the growing importance these due process institutions have for effective standard-setting outcomes with the academic literature to identify areas for future research.","PeriodicalId":51419,"journal":{"name":"Accounting Horizons","volume":" ","pages":""},"PeriodicalIF":2.5,"publicationDate":"2021-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48936773","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Kuang He, Xiaofei Pan, G. Tian, Yanling Wu, Chun Cai
In this study, we propose a reciprocal rent-seeking game between politicians and individual auditors with political connections, and examine how these auditors' political connections influence their audit quality. Using hand-collected data from the Chinese market from 2008 to 2013, we find that politically connected auditors have a significantly lower tendency to issue modified audit opinions (MAOs). In addition, we also find that politicians' career prospects are significantly adversely influenced by MAOs being issued in their jurisdictions, while auditors' political connections enable them to charge higher audit fees, acquire larger market share, and reduce the likelihood of encountering regulatory sanctions. Further evidence suggests that compared with their non-connected counterparts, the politically connected auditors tend to issue less accurate audit opinions, reduce client firms' earnings response coefficients (ERCs), and increase client firms' capital costs. Collectively, our study results suggest that individual auditors' political connections facilitate the reciprocal rent-seeking activities between these auditors and politicians, which ultimately undermines audit quality.
{"title":"How does reciprocal rent-seeking between politicians and auditors influence audit quality? - Evidence from China","authors":"Kuang He, Xiaofei Pan, G. Tian, Yanling Wu, Chun Cai","doi":"10.2308/horizons-19-118","DOIUrl":"https://doi.org/10.2308/horizons-19-118","url":null,"abstract":"In this study, we propose a reciprocal rent-seeking game between politicians and individual auditors with political connections, and examine how these auditors' political connections influence their audit quality. Using hand-collected data from the Chinese market from 2008 to 2013, we find that politically connected auditors have a significantly lower tendency to issue modified audit opinions (MAOs). In addition, we also find that politicians' career prospects are significantly adversely influenced by MAOs being issued in their jurisdictions, while auditors' political connections enable them to charge higher audit fees, acquire larger market share, and reduce the likelihood of encountering regulatory sanctions. Further evidence suggests that compared with their non-connected counterparts, the politically connected auditors tend to issue less accurate audit opinions, reduce client firms' earnings response coefficients (ERCs), and increase client firms' capital costs. Collectively, our study results suggest that individual auditors' political connections facilitate the reciprocal rent-seeking activities between these auditors and politicians, which ultimately undermines audit quality.","PeriodicalId":51419,"journal":{"name":"Accounting Horizons","volume":" ","pages":""},"PeriodicalIF":2.5,"publicationDate":"2021-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42052764","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：