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In reviewing contemporary literature on materiality judgement and the audit expectations gap (AEG), this paper considers an apparent void concerning that aspect of the AEG caused by the non‐disclosure of materiality and risk thresholds and criteria in the financial reports. The review enables the formation and discussion of two premises: first, disclosing cornerstone concepts, such as materiality and risk judgements, in financial reports enhances users' understanding of the limitations of information contained therein; and second, expanding the wording in audit reports reduces the AEG and enhances users' understanding of the objectives and limitations of an audit. In supporting the validity of these premises, it is concluded that the disclosure of materiality and risk judgements in financial reports may reduce the AEG. This hypothesis may be useful for future empirical research.

Eckbo, Masulis, & Norli (2000) question previous examination of initial public offering (IPO) underperformance with the keen argument that the increase in the number of traded shares and the infusion of equity reduce two significant premia in the stock’s return, namely, liquidity risk and financial risk. The new market for high (expected) growth stock in Germany is examined for evidence of underpricing, underperformance, and liquidity improvements during the first two complete years of operation – 1998 and 1999. The initial trading period examines the offering day and also the first ten days of trading (for the investor who can not get allocation but enters the secondary market). The postissue performance study period is taken as the 5‐day period one‐year after the IPO. Using regression of four underpricing measures upon issuing firm characteristics deemed important from the extant literature, we seek to explain the degree of underpricing discovered. We find that substantial underpricing occurs and performance is high one year later, even adjusted for the German market return for the period or the firm‐specific sector performance for the same period. Trading dwindles for most stocks after the offering day. One year later, the trading of the stock is even lower. We do find that the more active the trading in the initial period, the greater the returns and trading one year after.

This investigation into the performance of Initial Public Offerings on the new Alternative Investment Market reveals that the expected high level of underpricing, that is usually associated with the risky nature of small, young and growing companies, is not supported by the evidence in this study. Raw and market adjusted figures reveal that IPOs listed on AIM at the London Stock Exchange appear to be only conservatively mispriced when contrasted to main board IPO listings in the US, UK and other countries. Due diligence listing requirements could be offsetting the otherwise risky nature of these small, young and growing companies. Finally AIM is discussed in terms of meeting its own targets and its ability to attract international listings.

The aftermath of the Enron collapse included Congressional legislation known as the Sarbanes‐Oxley Act (SOX), which was rushed into law on July 29, 2002, by President Bush. This legislation, aimed at restoring confidence in the financial markets, addresses many aspects of corporate governance. This article addresses the audit committee provisions of SOX, particularly the requirements for independent membership and financial expertise. The article outlines the legislative requirements and then discusses the possible effects of this ‘patch‐up’. Is it too little too late and how long will the patch last?

The purpose of this paper is to investigate the relationship between perceived environmental uncertainty (PEU), supplier development (SUD) and the use of broad scope management accounting systems (MAS) information. In recent years, many companies have come to recognize the important role supply chain purchasing strategy plays in achieving competitive advantage. One of the key components of the supply chain purchasing strategy is supplier development. In addition, there have been calls for research into how changes in supply chain management affect the use of MAS.

About 78 managers from different organizations participated in this Finnish study. Using operations management and accounting literature, four hypotheses were proposed in the study. Data were collected from managers using a mail‐out questionnaire.

The results revealed that PEU is a determinant of SUD, which, in turn, is a determinant of the use of MAS. In other words, SUD plays a mediating role in the relationship between PEU and the use of broad scope MAS information.

This paper describes the responses from 78 managers in medium to large size manufacturing firms in North‐Western Finland and consequently a caveat about generalizability is appropriate notwithstanding the high‐global esteem of Finnish manufacturing.

The competitive production environment that exists today has forced many firms into lean production. This paper suggests that under such conditions of uncertainty the incorporation of SUD data into the MAS may prove very salutary.

The findings of this paper should prove useful to firms entertaining an upgrade and broadening the scope of their MAS to include supply chain management information, particularly as it relates to supplier development.

This study reports the findings of a survey of Swedish auditors seeking opinions on the conceptual underpinnings of the long established private sector management audit in that country. The authors give the background to the historical calls for accountability and stewardship and draw parallels with calls for accountability by the large modern corporations which emanate from the agency contracts that management functions under. The findings conclude that the Swedish profession needs a theoretical base for its continued conduct of this audit function. The UK and US professions have taken tentative steps towards expanding the traditional financial audit but the rallying calls of visionaries seem as yet to be unheeded.

The purpose of this brief article is to describe the chasm between academic research and management practitioners and to call for assistance in closing the divide.

Using journal literature and inductive observation from our experiences we offer our conceptual understanding by way of an opinion/viewpoint piece.

If we are to truly lessen the gulf between organizational researchers and practitioners, movement must occur from both directions. Not doing so will result in a continuing myopic focus on the divide itself instead of fundamental discussions of the more crucial elements that influence organizational performance and productivity.

We outline the relevant implications of our thinking for academics and practicing managers and offer recommendations that, if implemented by all involved, could narrow this gap and enhance the effectiveness of researchers and managers.

The distinctive contribution of this article is that it provides a resolute call for practicing managers to become part of the solution with respect to the relevance of management and organizational research.