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This chapter provides evidence that legislation affecting litigation risk has an influence on the financial reporting behavior of corporate management, we address the following research questions: (1) Do firms react to changes in litigation risk that result from the passage of new legislation at the federal level by adjusting their level of conservatism with regard to reporting earnings? (2) How do firms’ levels of conservatism react to changes in litigation risk over time? We analyze the level and trend in conditional conservatism to evaluate the efficacy of legislation in altering managerial reporting choice. Our examination takes place in the context of two distinct pieces of legislation intended to alter the legal environment faced by corporate managers: (1) the PSLRA (1995), and (2) Sarbanes–Oxley Act of 2002. Our findings indicate that the passage of legislation that increases litigation risk is associated with increased timeliness (conservatism) in financial reporting by managers. The increased timeliness, however, begins to subside shortly after the initial effect. While the initial effect of a reduction in litigation risk is negligible, subsequent periods exhibit declining timeliness (conservatism) in financial reporting. Our results indicate that legislative actions can be successful in altering management reporting choice through changes in legal regime. However, our results also demonstrate that the desired influence of these legislative policies may be transient.

The aim of this exploratory research is to compare three sectors of the auditing profession – internal auditors, external auditors from larger international firms, and external auditors from smaller/regional firms – in regard to the influence of situational context on their ethically‐related decision‐making and judgment evaluations.

Against the backdrop of five vignettes applied with a survey, the paper examines the potential influence of social consensus and magnitude of consequence on the ethical decision path of these three auditor groups.

The paper finds that, in all cases, social consensus and magnitude of consequences exert influence on the ethical decision path. In the case of social consensus, however the paper finds that the ethical decision path is fully mediated for large firm auditors but is only partial mediated for the other two groups of auditors.

This research examines responses from both internal and external auditors. Comparison between such groups is unique because these groups have not been well researched in the past literature.

Using a unique sample of about 563,000 competitively bid municipal revenue bonds with financial advisors issued during the period 1998–2012, the purpose of this paper is to examine the role and influence of financial advisor quality in the municipal bond market.

The authors use a sample of about 563,000 competitively bid municipal revenue bonds with financial advisors issued during the period 1998–2012. The authors estimate a selection model where the authors identify the factors leading to the selection of a high-quality financial advisor. The authors then, using the inverse mills ratio from the first regression, estimate the association of high-quality advisor (and other factors) with the cost of borrowing.

The results suggest that high-quality financial advisors provide a credible signal to market participants about issue and issuer quality. This signal translates to a greater number of bids for issues that use high-quality financial advisors, resulting in improved liquidity and lower borrowing costs for these issues. The results also show that the beneficial effects obtained by using higher quality financial advisors are prevalent across all categories of issues such as for refunding and non-refunding issues, and for both insured and non-insured issues. The benefits are also generally observed for issues of most size categories. The results also suggest that the passage of the Dodd–Frank Act requiring mandatory registration of financial advisors and enhanced scrutiny has only increased the benefits to issuers from using higher quality financial advisors.

This paper differs from previous research in several important ways. First, the study is, to the authors’ knowledge, the first study that explores the relationship between financial advisor quality and liquidity in the municipal sector. The authors show using higher quality financial advisors enhances liquidity for the issues by attracting a significantly large number of bids. Second, the sample is exclusively comprised of competitively bid revenue issues all of which rely on financial advisors. This enables us to examine more unambiguously the influence of financial advisor quality, without the confounding effects of issues without financial advisors. Third, time coverage (1998–2012) and size of the sample (roughly 563,000 bond issues) enables us to conduct varied sub-sample analyses with greater power since the resulting sub-sample partitions themselves are of very large size. This provides better and additional insights into the role of financial advisor quality. The more current data when compared to prior research enables us to examine the impact of financial advisor quality inter-temporally with special attention devoted to the period after passage of the Dodd–Frank Act.

Extant theory tends to treat Organizational Culture (OC) and fraud-related values as static, characterizing culture as synonymous with potential ethical values − but devoting less attention to how the culture and values arose and where they are headed. Buffer/conduit theory proposes that accountants learn to use a taxonomy containing three dynamic layers: collective fraud orientation, a buffer/conduit layer, and individual fraud orientation. The middle layer contains OC-related internal controls that buffer the orientation layers from spreading fraud-encouraging values, and serve as conduits transmitting fraud-deterring values − or, when controls do not function as intended, transmitting fraud-encouraging values. A factor analysis of 11 indicators of this three-layer taxonomy suggests that older generations of accounting practitioners apply the taxonomy, but millennials do not. Predisposition to commit fraud is especially salient to internally focused millennials, who uniquely perceive recruitment and training as compensating mechanisms and as collective buffers.

Rapidly evolving fintech and decentralized finance environments present an opportunity to reconsider how best to teach financial reporting, internal controls, auditing, taxation, and accounting information systems. Industrial firms have found considerable success in growing the customer value/cost ratio by applying “design thinking” (DT) to product and service innovation. DT may serve a similar, value-enhancing role in curriculum development and accounting pedagogy. The authors demonstrate the application of DT to the accounting curriculum using non-fungible tokens (NFTs) as an illustration. This chapter defines NFTs and DT, proposes a DT-based curriculum development model, and offers specific recommendations for teaching about NFTs in the classroom.

The purpose of this article, which is based on author's study, is to highlight the essential attributes of forensic accountants and to construct the forensic accountant “blueprint” as a reference for forensic accounting education and training.

This study uses primary and secondary data on forensic accounting profession in Indonesia and the USA. Such data were collected by means of literature reviews, in-depth interviews, and a focus group discussion with a number of forensic accounting professionals in Indonesia and the USA.

The author establishes that the “problem-based” nature of forensic accounting requires a unique approach in producing forensic accountants compared to ordinary accountants. The essential attributes that a forensic accountant needs to possess are mentality, method, and experience. “Mentality” consists of elements such as ability to differentiate the right from the wrong, courage to stand up for what is right, ability to withstand pressures from the works, and puzzle solving mindsets. “Methods” refer to the understanding of the fraud investigation process such as fraud detection, evidences, investigation methods, and investigation report. “Experience” as the third attribute is gained primarily through involvement in fraud investigation process in which a forensic accountant utilizes his or her knowledge previously acquired through education and training.

Forensic accounting is a problem oriented skill that may differ across countries. Due to the time and financial resource constraint, this study is limited only on two countries and a small number of respondents. For future study, more countries and respondents should be included in analysis to gain a more complete picture on what constitute a forensic accountant.

The results of this study contribute to the development of human resource in the forensic accounting profession. More specifically, they serve as a reference in the development of curriculum for forensic accounting education and training especially in Indonesia.

This paper sees forensic accountant skill development from the “demand” point of view by highlighting what that the profession expects from a forensic accountant.