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Article
Publication date: 1 January 2007

Michael J. Meyer, John T. Rigsby and Jeff Boone

To examine whether auditor‐client relationships have an effect on the decision by an auditor to remove an audit qualification.

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Abstract

Purpose

To examine whether auditor‐client relationships have an effect on the decision by an auditor to remove an audit qualification.

Design/methodology/approach

The paper tracks the event history of a sample of firms from the issuance of a first time audit qualification for going concern and non‐going concern contingencies (initial qualification issued between 1983 and 1987, all pre Statement of Auditing Standard (SAS) 58) to the issuance of a clean opinion (up through 1995 when SAS 79 was issued). Attachment theory provides a theoretical framework for the variables analyzed and discrete time survival analysis is used as the statistical method in the analysis so as to evaluate each company year from the initial unclean opinion to the year a clean opinion is issued.

Findings

It is found that interpersonal and interorganizational attachment has a significant impact on those opinion decisions that require more auditor judgment (i.e. going concern).

Originality/value

This study examines the linkage between auditor tenure and audit quality in a broader context than has been examined to date. Using attachment theory for the foundation, auditor tenure can be viewed as but one measure of the attachment between auditors and clients. In this study, a number of measures of both interpersonal and interorganizational attachment between auditors and clients are included. Further, auditor opinion judgments are examined as a determinant of auditor quality. Finally, discrete‐time survival analysis is employed which allows the tracking of the entire event history from initial qualification to removal of the qualification, something not possible with most standard statistical techniques.

Details

Managerial Auditing Journal, vol. 22 no. 1
Type: Research Article
ISSN: 0268-6902

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Book part
Publication date: 9 October 2020

Chen Liu and Serena Shuo Wu

Abstract

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Corporate Fraud Exposed
Type: Book
ISBN: 978-1-78973-418-8

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Book part
Publication date: 30 July 2014

Emily C. Bouck and Sara Flanagan

The chapter Technological Advances in Special Education provides information on advances of technology and how such technological advances have influenced students with…

Abstract

The chapter Technological Advances in Special Education provides information on advances of technology and how such technological advances have influenced students with disabilities and special education across the globe. The chapter presents technological advances that benefited students with disabilities in developed countries as well as potential technologies to support students with disabilities in developing countries. The scant exiting literature on developing countries suggests some universal themes regarding technology for students with disabilities including access and training. Additional attention and research is needed on assistive technology to support students with disabilities in both developed and developing countries, with recognition that what works is developed counties may not work in developing.

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Special Education International Perspectives: Biopsychosocial, Cultural, and Disability Aspects
Type: Book
ISBN: 978-1-78441-045-2

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Article
Publication date: 14 February 2023

Sharad Asthana and Rachana Kalelkar

This paper's purpose was to examine the impact of geomagnetic activity (GMA) on the timing and valuation of earnings information disclosed by firms every quarter.

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Abstract

Purpose

This paper's purpose was to examine the impact of geomagnetic activity (GMA) on the timing and valuation of earnings information disclosed by firms every quarter.

Design/methodology/approach

The authors start the analyses with a sample of 112,669 client firms from 1989 to 2018. To analyze the impact of GMA on the earnings response coefficient (ERC), the authors use the three-day cumulative abnormal returns and cumulative abnormal returns for the extended post-earnings announcement window [2, 75] as the dependent variables. The authors interact unexpected earnings (UE) with the C9 Index, an index commonly used to measure GMA and study how GMA affects the pricing of new public information. To examine the effect of GMA on the timing of disclosure of earnings news, the authors regress a variant of the GMA index on the propensity to disclose bad earnings news.

Findings

The authors find significantly lower earnings response coefficients during periods of high GMA. This effect is permanent and stock prices do not correctly incorporate the implications of earnings information over time. The authors also show that managerial behavior is affected by GMA as well and the managers are more (less) likely to release bad (good) news during periods of higher activity. Finally, the authors also find that in situations where stakeholders are likely to rely on modern technology that depends minimally on humans, the adverse impact of GMA on the pricing of earnings information is mitigated.

Originality/value

The literature on the effect of GMA on the capital market is very limited and focuses primarily on stock returns, while the behavioral finance literature focuses on circumstances like weather, temperature and sporting outcome to study how the investors' mood affects their capital market behavior. The authors add to both the literature by investigating how GMA influences investors' and managers' behaviors in the capital market.

Details

Asian Review of Accounting, vol. 31 no. 3
Type: Research Article
ISSN: 1321-7348

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Article
Publication date: 2 October 2019

Wael Aguir, Linxiao Liu and Emeka Nwaeze

The purpose of this paper is to examine the relationship between the intensity of accruals and auditor industry specialization. It investigates whether a client firm’s accruals…

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Abstract

Purpose

The purpose of this paper is to examine the relationship between the intensity of accruals and auditor industry specialization. It investigates whether a client firm’s accruals intensity is a factor associated with the firm being audited by an industry specialist auditor.

Design/methodology/approach

This paper employs an empirical archival methodology using publicly available data. The sample consists of client firms that switched auditors from 2004 to 2014.

Findings

The results show that accruals intensity is positively associated with the choice of an industry specialist auditor, measured both at the national and the city levels. These findings imply that companies with high levels of accruals choose an industry specialist auditor to signal the quality of their accruals and to gain more credibility for their financial reporting.

Originality/value

This paper provides original empirical evidence of the association between accruals intensity and the choice of an industry specialist auditor. This link is new to the literature. Extant literature shows that firms with high levels of accruals are regarded as risky and suffer from reduced credibility in financial markets. This study contributes to the literature by showing that these firms choose an industry specialist auditor to alleviate investors’ credibility concerns about the high levels of accruals. These findings provide insightful information to audit firms, to managers of firms that inherently display high levels of accruals and to the capital markets participants in general.

Details

Asian Review of Accounting, vol. 27 no. 3
Type: Research Article
ISSN: 1321-7348

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Article
Publication date: 14 August 2018

Henri Akono

This paper aims to examine whether high equity incentives motivate executives to avoid issuing convertible debt and/or to design convertible debt issues as anti-dilutive to…

455

Abstract

Purpose

This paper aims to examine whether high equity incentives motivate executives to avoid issuing convertible debt and/or to design convertible debt issues as anti-dilutive to earnings-per-share (EPS).

Design/methodology/approach

Tests are conducted using the Heckman two-step probit model to control for potential self-selection bias between firms that issue straight debt and those that issue convertible debt. Further, analyses are conducted separately and jointly for the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) to assess the differential impact of CEOs’ and CFOs’ equity incentives on convertible debt issuance and design decisions.

Findings

Firms are more likely to design convertible debt issues as anti-dilutive to EPS when CFOs have high levels of equity incentives, but only when the firm stock price is sensitive to diluted EPS. High CEOs’ equity incentives have limited impact of convertible debt issuance and design decisions.

Research limitations/implications

The main limitation of this study is the generalizability of the findings and implications of this study due to the smaller sample size of convertible debt issues.

Originality/value

Prior research has shown that bonus incentives influence CEOs with disincentive for EPS dilution and motivate them to make anti-dilutive financing decisions. Further, there is evidence that high equity incentives motivate CEOs to manage earnings to boost short-term prices. This study extends prior literature by showing that high equity incentives provide executives with disincentive for EPS dilution and motivate CFOs to design convertible debt issues as anti-dilutive to EPS possibly to avoid reduced stock prices. Further, this study shows that CFOs have greater influence over convertible debt design choices than CEOs do.

Details

Review of Accounting and Finance, vol. 17 no. 3
Type: Research Article
ISSN: 1475-7702

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Book part
Publication date: 1 August 2004

Nicole S Ofiesh

This chapter presents “what we know” about the application of technology to instruction for students with learning and behavioral disabilities. Information is presented on…

Abstract

This chapter presents “what we know” about the application of technology to instruction for students with learning and behavioral disabilities. Information is presented on research-based effective practices in technological interventions for teaching specific academic skills, delivering content at the secondary level and using technology as a tool for assessment. The chapter concludes with a discussion on Universal Design for Learning and the promises this paradigm holds for educating not only students with special needs, but all learners. The chapter begins where parents and teachers typically begin: the consideration of technology.

Details

Research in Secondary Schools
Type: Book
ISBN: 978-0-76231-107-1

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Book part
Publication date: 23 April 2010

Emily C. Bouck

Technology, particularly for students with disabilities, is often viewed as “the great equalizer” (Wyer, 2001, p. 1). It is perceived as a means of providing access and…

Abstract

Technology, particularly for students with disabilities, is often viewed as “the great equalizer” (Wyer, 2001, p. 1). It is perceived as a means of providing access and opportunity, promoting independence, and encouraging empowerment (Edyburn, Higgins, & Boone, 2005b). Technology can greatly benefit students with disabilities and solve many of the challenges these students face. Perhaps, this was put most profusely by former Assistant Secretary of the United States Department of Education, Office of Special Education Programs Judy Heumann, “For most of us, technology makes things easier. For a person with a disability, it makes things possible” (Edyburn et al., 2005b, p. xiii). The potential of technology is enormous for students with disabilities. For example, technology can provide a voice to those students who may not otherwise have one per their disability (i.e., AAC devices), read a text to a student who struggles with reading as a result of his/her disability (i.e., text-to-speech devices, screen readers, and Reading Pens), grant access to a computer and other electronic tools (i.e., switches and speech recognition), and offer low-tech devices such as pencil grips or lined paper to aid students in writing.

Details

Current Issues and Trends in Special Education: Research, Technology, and Teacher Preparation
Type: Book
ISBN: 978-1-84950-955-8

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Article
Publication date: 31 January 2018

Elizabeth Johnson, Kenneth J. Reichelt and Jared S. Soileau

We investigate the effect of the PCAOB’s Part II report on annually inspected firms’ audit fees and audit quality. The PCAOB replaced the peer review auditor program with an…

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Abstract

We investigate the effect of the PCAOB’s Part II report on annually inspected firms’ audit fees and audit quality. The PCAOB replaced the peer review auditor program with an independent inspection of audit firms. Upon completion of each inspection, the PCAOB issued inspection reports that include a public portion (Part I) of identified audit deficiencies, and (in most cases) a nonpublic portion (Part II) of identified quality control weaknesses. The Part II report is only made public when the PCAOB deems that remediation was insuffcient after at least 12 months have passed. Starting around the time of the 2007 Deloitte censure (Boone et al., 2015), the PCAOB shifted from a soft synergistic approach to an antagonistic approach, such that Part II reports were imminent, despite delays that ultimately led to their release one to four years later than expected. Our study spans the period from 2007 to 2015, and examines the effect on audit fees and audit quality at the earliest date that the Part II report could have been released – 12 months after the Part I report was issued. We find that following the 12 month period, that annually inspected audit firms eventually lost reputation by lower audit fees, while they concurrently made remedial efforts to increase the quality of their client’s financial reporting quality (abnormal accruals magnitude and restatements). However, three years after the Part II report was actually released, audit fees increased.

Details

Journal of Accounting Literature, vol. 41 no. 1
Type: Research Article
ISSN: 0737-4607

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Article
Publication date: 5 March 2018

Sam K. Formby, Manoj K. Malhotra and Sanjay L. Ahire

Quality management constructs related to management leadership and workforce involvement have consistently shown strong correlation with firm success for years. However, there is…

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Abstract

Purpose

Quality management constructs related to management leadership and workforce involvement have consistently shown strong correlation with firm success for years. However, there is an increasing body of research based on complexity theory (CT) suggesting that constructs such as these should be viewed as variables in a complex system with inter-dependencies, interactions, and potentially nonlinear relationships. Despite the significant body of conceptual research related to CT, there is a lack of methodological research into these potentially nonlinear effects. The purpose of this paper is to demonstrate the theoretical and practical importance of non-linear terms in a multivariate polynomial model as they become more significant predictors of firm success in collaborative environments and less significant in more rigidly controlled work environments.

Design/methodology/approach

Multivariate polynomial regression methods are used to examine the significance and effect sizes of interaction and quadratic terms in operations scenarios expected to have varying degrees of complex and complex adaptive behaviors.

Findings

The results find that in highly collaborative work environments, non-linear and interaction effects become more significant predictors of success than the linear terms in the model. In more rigid, less collaborative work environments, these effects are not present or significantly reduced in effect size.

Research limitations/implications

This study shows that analytical methods sensitive to detecting and measuring nonlinearities in relationships such as multivariate polynomial regression models enhance our theoretical understanding of the relationships between constructs when the theory predicts that complex and complex adaptive behaviors are present and important.

Originality/value

This study demonstrates that complex adaptive behaviors between management and the workforce exist in certain environments and provide greater understanding of factor relationships relating to firm success than more traditional linear analytical methods.

Details

International Journal of Productivity and Performance Management, vol. 67 no. 3
Type: Research Article
ISSN: 1741-0401

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