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Article
Publication date: 1 September 1996

Marianne Jennings, Dan C. Kneer and Philip M.J. Reckers

“The definition of auditing calls for the communication of the degree of correspondence between assertions and established criteria” [ASOBAC, 1973]. As the profession has rejected…

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Abstract

“The definition of auditing calls for the communication of the degree of correspondence between assertions and established criteria” [ASOBAC, 1973]. As the profession has rejected adoption of universal quantitative definitions of materiality as infeasible [FASB, 1979], Don Leslie [1984] recommended adoption of a standard requiring disclosure of specific engagement materiality thresholds in the auditor's report. This study examines how such disclosures might affect perceptions of an auditor's culpability and liability in instances where post publication errors are discovered which alternately aggregate to more or less than reported materiality thresholds. A behavioral experiment was conducted in which eighty‐seven U.S. general jurisdiction judges participated. Findings support the potential for meaningful modifications to the standard auditor's report to reduce perceived auditor liability but also note the importance of jurists' pre‐experimental attitudes and beliefs respecting the public accounting profession. In 1985, the Canadian Institute of Chartered Accountants published Materiality: The Concept and its Application to Auditing [CICA, 1985]. In that research study, Don Leslie focused on his perceptions of the communication deficiencies of the standard form audit report used in Canada and the U.S. — the most critical of which he found to be the continuing lack of a quantitative definition of materiality. Leslie's remedy for the problem was novel and controversial even if his recognition of this problem was not without precedent. Leslie did not recommend the prompt adoption of universal, quantitative materiality standards (a proposal which has stalemated progress in the profession for years) but rather adoption of a standard making it compulsory that auditors disclose their individual materiality standards, whatever they may be, on each specific audit, in the audit report. To date, no serious research has examined this proposal since the report's publication, and yet the costs of the communications gap between accounting/auditing professionals and the public seem to be getting greater. The Auditing Standards Board recently readdressed the communications provided by the standard form audit report. One of the clearest observa‐tions to emerge from those deliberations was that there is a lack of reliable research data upon which to base regulatory decisions in this area [Elliott and Jacobson, 1987]. This paper contributes to reduce that vacuum. Specifically, on the following pages we outline the genesis of a research project and the findings of that study in which eighty‐seven (87) U.S. judges evaluated whether and to what degree an altered form of the audit report (including quantitative definition of materiality) would reduce the assessed culpability and legal liability of auditors. The remaining sections of this paper are organized as follows: in section one, we will summarize representative recent relevant literature; in section two, we develop testable hypotheses from that background literature; in section three, we provide a description of the design of our study; in section 4, our findings are reported and in section 5 we discuss implications for practice and future research.

Details

Managerial Finance, vol. 22 no. 9
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 1 August 1996

Dan C. Kneer, Philip M.J. Reckers and Marianne M. Jennings

In 1988, the US standard form audit report experienced its first major modification in 39 years. Among the objectives of the “new” report were better auditor/user communications…

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Abstract

In 1988, the US standard form audit report experienced its first major modification in 39 years. Among the objectives of the “new” report were better auditor/user communications leading to, among other things, an abridgement of auditor liability. Nearly a decade later, this issue has yet to be addressed empirically and with rigour. The empirical research reported examines the ability of the “new” audit report to reduce perceptions of auditor responsibility/liability across two instances of alleged audit failure. It is argued that a jurist’s advantage of “perfect hindsight” may mitigate the effectiveness of revised communications contained in the audit report, in instances where audit risk at the time of the audit appears high. Accordingly, consideration of environments of both high and low perceived risk were provided in a behavioural experiment conducted with 81 investors serving as subjects. Findings reveal that the revised audit report language may provide relief for auditor liability, but the presence of red‐flags, or red‐flag related environmental conditions, may exacerbate negative perceptions.

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Managerial Auditing Journal, vol. 11 no. 6
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 1 January 2025

Shuai Chen and Yang Zhao

Human-artificial intelligence (AI) collaboration, as a new form of cooperative interaction, has been applied in brainstorming activities. This study aims to explore the impact of…

76

Abstract

Purpose

Human-artificial intelligence (AI) collaboration, as a new form of cooperative interaction, has been applied in brainstorming activities. This study aims to explore the impact of performance-reward expectancy (PRE) and creative motivation (CM), along with the search for ideas in associative memory (SIAM) theory, on participants' AI collaboration intent (AICI).

Design/methodology/approach

The research employs an online survey targeting users with brainstorming experience. Structural equation modeling (SEM) is applied to analyze the data and validate the proposed hypotheses.

Findings

PRE shows a positive correlation with both intrinsic motivation (IM) and extrinsic motivation (EM). Furthermore, EM significantly and positively influences AICI, while IM has a negative significant effect. Additionally, the study confirms the mediating role of social inhibition (SI) between EM and AICI.

Research limitations/implications

This study examines the intent to collaborate with AI in brainstorming, filling a gap in existing research. It integrates SIAM theory to analyze how performance rewards and creative motivation influence this intent. Findings reveal that performance-based rewards effectively motivate creative engagement, but high intrinsic motivation may lead to lower intent to collaborate due to autonomy concerns and trust issues. The study emphasizes the need for an open environment and offers practical insights for fostering AI collaboration while addressing challenges like social inhibition and resistance among participants.

Practical implications

This study provides practical insights for creative teams and individuals, emphasizing the importance of integrating AI in brainstorming to unlock its full potential. While performance rewards are effective, social inhibition may still lead participants to have negative attitudes toward AI collaboration. Creating an open and inclusive environment is essential. Additionally, the “individual + AI” model may provoke resistance among highly intrinsically motivated participants, necessitating training and improved AI transparency to build trust. Although focused on the Chinese market, the findings are applicable globally, highlighting the need to explore effective AI integration methods for innovation.

Social implications

Our study found that PRE can positively influence intrinsic and extrinsic motivation in creative activities. This finding provides new evidence for our understanding of the role of performance-reward mechanisms in stimulating creativity. At the same time, we also explored how factors such as social inhibition and production blocking can affect individuals’ willingness to work with AI by influencing creativity motivation. This provides new insights to better understand how AI in teams affects individual psychology and team dynamics. These findings not only enrich our understanding of innovation and teamwork but also provide valuable references and directions for future research.

Originality/value

This study systematically examines the influence of PRE on CM within the context of AI-assisted brainstorming for the first time. It further investigates how SIAM theory regulates this process and ultimately shapes participants' willingness to engage in AI collaboration. The findings offer theoretical and practical guidance on designing incentive mechanisms to enhance engagement in AI-supported brainstorming and provide new perspectives on the application of AI in team innovation activities.

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Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

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Article
Publication date: 13 December 2024

Nik Ashri Nik Harun, Md Azalanshah Md Syed and Fadli Abdullah

The purpose of this study is to explore the role of an artificial intelligence (AI) tool, Microsoft Copilot, in enhancing costume design education. It focuses on the tool’s impact…

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Abstract

Purpose

The purpose of this study is to explore the role of an artificial intelligence (AI) tool, Microsoft Copilot, in enhancing costume design education. It focuses on the tool’s impact on student creativity, technical skills and educational quality assurance.

Design/methodology/approach

The authors adopted a qualitative approach, drawing insights from interviews with students and educators, along with observations from a costume design course. Thirty students and three educators participated, with the study focusing on how AI-assisted tools influenced learning outcomes, creativity and the integration of AI into traditional design methods.

Findings

The authors discovered that Microsoft Copilot allowed students to quickly generate and refine their design concepts, which boosted both their efficiency and creativity. However, the authors found that some students became overly reliant on AI-generated designs, highlighting the need to balance AI with traditional design practices. The authors also emphasised the importance of providing technical support to help students effectively use AI tools in the classroom.

Research limitations/implications

Their study focused on a single cohort in one educational setting, which may limit the generalisability of its findings. Future research should investigate the long-term effects of AI on creativity and explore strategies to minimise over-reliance on AI-generated designs.

Originality/value

Their research provides valuable insights into the integration of AI in creative fields, particularly in costume design education. The findings contribute to ongoing discussions on using AI to enhance learning outcomes while safeguarding individual creativity and essential artistic skills.

Details

Quality Assurance in Education, vol. 33 no. 2
Type: Research Article
ISSN: 0968-4883

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Article
Publication date: 28 August 2024

YJ Sohn, Heidi Hatfield Edwards and Theodore Petersen

This paper aims to enhance the understanding of the distinct origins, mechanisms, growth paths and societal impacts of misinformation and disinformation through the theoretical…

47

Abstract

Purpose

This paper aims to enhance the understanding of the distinct origins, mechanisms, growth paths and societal impacts of misinformation and disinformation through the theoretical lens of Niklas Luhmann’s social systems theory, particularly focusing on structural coupling and penetration.

Design/methodology/approach

This paper is based on a conceptual study that investigates the phenomena of mis-/disinformation based on reviews of the literature on social systems theory, particularly focusing on structural coupling and penetration.

Findings

This theoretical analysis has led to the postulations that mis-/disinformation would cause social conflicts through divergent routes and that they do not necessarily have negative consequences in society. That is, conflicts or communication of contradictions serve for the reproduction and change in social systems and, furthermore, serve society as an immune mechanism. We speculate that similarities in the manifestation of mis-/disinformation could stem from the influence of amplifiers, such as moral intervention. Nevertheless, we posit that disinformation stemming from intentional penetration is more likely to cause societal dysfunction than misinformation, leading to conflict overload, polarized information ecosystems and potential system failures.

Originality/value

It provides a broader theoretical perspective for a better understanding of the roots and mechanisms of mis-/disinformation and their social consequences. It also engages with unresolved debates over structural couplings and penetration, showing how distinguishing these concepts enhance analytical clarity and explanatory power.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

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Article
Publication date: 22 August 2022

Samir Belkhaoui

The purpose of this paper is to investigate empirically the channels through which Islamic and/or conventional banking can spur economic growth in MENA region.

540

Abstract

Purpose

The purpose of this paper is to investigate empirically the channels through which Islamic and/or conventional banking can spur economic growth in MENA region.

Design/methodology/approach

The study uses a range of developed econometric approaches, including panel cointegration technique, panel Granger causality test and a panel-based vector error correction model (VECM), to analyze explicitly all the causal relationships among Islamic banking, conventional banking development and economic growth in a unified framework.

Findings

The empirical results show that Islamic banking in MENA countries not only leads to economic growth but also affects positively and significantly conventional banking development. Thus, Islamic banking has an active role and could be classified as “supply-following” since its development only leads to economic growth, whereas conventional banking, with passive role, could be classified as “demand-following” since it only reacts to economic growth in long run.

Research limitations/implications

The study has two principal limitations. It is conducted within a relatively limited time period and sample of countries. Also, the used models did not take into account the impact of others financial and macroeconomic variables like stock market development, interest rate, inflation and financial crisis.

Practical implications

The results have two main implications. First, in MENA countries, well-functioning Islamic banking sector could not only promote economic growth but also can be served as a development factor for their conventional one. Second, unlike conventional banks, the customer of Islamic banks seems not to be motivated by interest and profits. Rather religious factors are recommended as the main motive for investing and saving in Islamic banks.

Originality/value

The study tries to perceive whether there exists a substitution or complementarity effect between Islamic and conventional banking in promoting economic growth for MENA countries. This situation is neither revealed nor clarified in the relevant literature.

Details

Journal of Islamic Accounting and Business Research, vol. 14 no. 2
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 1 July 1995

Steven Kaplan and Philip M.J. Reckers

The dangers of management bias and the resulting increased need forauditors to be cognizant of environmental characteristics may beparticularly acute in the area of accounting…

3111

Abstract

The dangers of management bias and the resulting increased need for auditors to be cognizant of environmental characteristics may be particularly acute in the area of accounting estimates. Accounting estimates pose relatively unique auditing problems because it is an area where management has significant discretion (to set estimates) and there is limited ability to apply traditional accounting controls. Thus auditors have difficulty obtaining conclusive evidence to challenge management′s estimates. Research examining auditors′ accounting estimate judgments, however, has been scant, especially with regard to the relationship of auditors′ assessment of materiality and risks of fraudulent financial reporting. Reports the results of an empirical study examining the reporting decisions of audit seniors and audit managers related to a client′s decision to change four accounting estimates relative to the prior year. The auditor′s task was to review the changes and to indicate whether audit adjustments proposed by the audit staff were necessary to preserve an unqualified opinion. Three environmental red flags related to management lifestyle, bonus compensation programme and internal audit department strength were manipulated between subjects. The results indicated that the direct effect of the red flags on reporting decisions was limited. The findings provided greater support for an indirect model. In the indirect model, red flags affected auditors′ assessments of management intent, which, in turn, influenced auditors′ reporting decisions in combination with assessed materiality and level of auditor experience.

Details

Managerial Auditing Journal, vol. 10 no. 5
Type: Research Article
ISSN: 0268-6902

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