In this commentary, the author uses the development of data analytics curriculum at DePaul University as an example to highlight possible challenges and share the experience. In…
Abstract
Purpose
In this commentary, the author uses the development of data analytics curriculum at DePaul University as an example to highlight possible challenges and share the experience. In addition, seven different possible future research directions are identified so the readers are able to understand more about the impact of emerging technologies on the accounting profession and accounting curriculum.
Findings
Challenges and experience when developing data analytics curriculum at DePaul University are discussed. In addition, seven different possible future research directions are identified so the readers are able to understand more about the impact of emerging technologies on the accounting profession and accounting curriculum.
Originality/value
This paper expresses the author’s viewpoints regarding the impact of emerging technologies on accounting curriculum and the accounting profession.
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Yibo Zhang, Tawei Wang and Carol Hsu
The purpose of this paper is to examine the impacts of companies’ voluntary adoption of the General Data Protection Regulation (GDPR) as well as the readability of privacy…
Abstract
Purpose
The purpose of this paper is to examine the impacts of companies’ voluntary adoption of the General Data Protection Regulation (GDPR) as well as the readability of privacy statements on US customers’ intention to disclose information and their trust in a company.
Design/methodology/approach
Building on the construal level theory and psychological distance, the authors conduct a 2 × 2 + 2 between-participants experiment with 255 participants.
Findings
The findings show that a company’s voluntary adoption of the GDPR has positive effects on customers’ intention to disclose information to and their trust in that company. In addition, the effects of GDPR adoption are stronger when the adopting company’s privacy statements possess a higher level of readability.
Originality/value
The authors believe this study poses policy implications for the outcomes of GDPR adoption and the recent debate on both a stricter data breach and privacy regulation.
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Kyungeun Kwon, Mi Zhou, Tawei Wang, Xu Cheng and Zhilei Qiao
Both the SEC (Securities and Exchange Commission) and the popular press have routinely criticized firms for the complexity of their financial disclosures. This study aims to…
Abstract
Purpose
Both the SEC (Securities and Exchange Commission) and the popular press have routinely criticized firms for the complexity of their financial disclosures. This study aims to investigate how financial analysts respond to the tone complexity of firm disclosures.
Design/methodology/approach
Using approximately 20,000 earnings conference call transcripts of S&P 1,500 firms between 2005 and 2015, the authors first calculate the abnormal negative tone, the measure of tone complexity; then use such tone measure in econometric models to examine analyst forecast behavior. The authors also test the robustness of the results under different model specifications, tone word lists and alternative tone measure calculations.
Findings
Consistent with the notion that analysts respond to the information demand from investors and incur more costs and effort to analyze firm disclosure when the tone is more complex, the authors find that higher tone complexity is positively and significantly associated with more analyst following, longer report duration, more forecast revisions, larger forecast error and larger forecast dispersion. In addition, the authors find that tone complexity has a long-term impact on analyst following but has a limited long-term impact on analyst report duration, analyst revision, forecast error and dispersion.
Originality/value
This study complements existing literature by highlighting the information role of financial analysts and by providing evidence that analysts incorporate the management tone disclosed during conference calls to adjust their forecasting behaviors. The results can be used by policymakers as evidence and support for further improving firm communication from a new dimension of disclosure tone.
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Wenqi Han, Andreas Hellmann and Meiting Lu
This study conducts an empirical examination of auditors’ interpretation of selected key uncertainty expressions, namely virtually certain, probable and unlikely, included in…
Abstract
Purpose
This study conducts an empirical examination of auditors’ interpretation of selected key uncertainty expressions, namely virtually certain, probable and unlikely, included in accounting standards.
Design/methodology/approach
This paper adopts a survey research method to examine the impact of gender difference on the interpretation of uncertainty expressions. Professional auditors in China were selected to examine whether gender difference influences the interpretation of uncertainty expressions.
Findings
The results show that female auditors are likely to interpret positive or negative uncertainty expressions more conservatively than male auditors. The extent of conservatism is higher when female auditors are interpreting in-context expressions. The results remain similar after controlling for additional variables, such as education and work experience, which possibly affect the interpretation of probability expressions.
Originality/value
The results of this study suggest that gender difference can affect the numerical thresholds that auditors’ assign to uncertainty expressions. This may lead to different application of professional judgments between male and female auditors. It also provides important implications to regulators and practitioners on the quality of financial reporting and auditing across organizations within and across countries.
Yi-Ching Chen, Tawei Wang and Jia-Lang Seng
The purpose of this paper is to investigate the relation between voluntary accounting changes (VACs) and post-earnings announcement drift. In addition, the authors examine how…
Abstract
Purpose
The purpose of this paper is to investigate the relation between voluntary accounting changes (VACs) and post-earnings announcement drift. In addition, the authors examine how accounting choice heterogeneity moderates such association.
Design/methodology/approach
The authors collect VAC firms in the US in the period from 1994 to 2008 and identify the heterogeneity of accounting choices between VAC and non-VAC firms. To test the hypotheses, the authors consider a 10-Q filing window and a post-filing drift window. The 10-Q filing window begins from one trading day before and ends on one trading day after the quarterly report filing date. The post-filing drift window begins from two trading days after the filing date and ends on 60 trading days with respect to the earnings announcement date.
Findings
The results demonstrate that, overall, VAC does not affect the three-day market reactions to 10-Q filings. However, after taking into account the accounting choice heterogeneity, the authors observe that VAC is positively related to the market reactions to surprises and negatively associated with the post-filing period drift.
Originality/value
The paper contributes to the literature by showing that VACs affect the market’s responses to 10-Q filings only when such change results in different accounting practices compared to the VAC firm’s major competitors. Furthermore, given the change with heterogeneity requires more time to process, VACs are related to post-filing announcement drift.
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Tzu-Ling Huang, Tawei Wang and Jia-Lang Seng
– This study aims to examine the relation between voluntary accounting changes (VACs) and analyst following.
Abstract
Purpose
This study aims to examine the relation between voluntary accounting changes (VACs) and analyst following.
Design/methodology/approach
A sample of firms was collected with VACs in the period from 1994 to 2008 and their major competitors, as well as industry benchmarking firms without accounting changes. The authors then investigated how VACs affect analysts’ following decisions given accounting choice heterogeneity.
Findings
The findings demonstrate that VAC is negatively associated with analysts’ following decisions. Such association becomes stronger after taking into account accounting choice heterogeneity before and after VACs.
Originality/value
This study contributes to the literature in the economic consequences of VACs and suggests that analysts presumably are able to comprehend the differences in accounting choices. However, the additional level of effort and the concern of manipulation may affect analysts’ behavior. This study documents whether VAC results in different accounting choices from the firm’s major competitors or industry benchmarking firms.
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She-I Chang, I-Cheng Chang and Tawei Wang
– The main aim of this study is to perform a case study to understand the information systems (IS) integration strategy of two high-tech companies after merger and acquisition.
Abstract
Purpose
The main aim of this study is to perform a case study to understand the information systems (IS) integration strategy of two high-tech companies after merger and acquisition.
Design/methodology/approach
The authors perform a case study on the mergers and acquisitions (M&A) of two high-tech companies to illustrate the IS integration activities in the M&A processes.
Findings
This study summarizes 26 fields from the IS integration process in the post-M&A period. These 26 fields highlight the challenges when standardizing the integrated system and the impacts on work routines as well as cultural resistance.
Originality/value
This study shows that the success of IS integration in the M&A context is determined by identifying critical functions and leveraging the pre-M&A know-hows of both companies. Furthermore, standardization may not be the first priority during the integration process. It is also beneficial to keep the uniqueness of the systems of both companies which reduces the concerns of potential resistance of the IT personnel. This study also has managerial implications. The findings suggest that identifying and prioritizing relevant fields in the context of a cross-business IS integration would improve the resource allocation decision and the effectiveness of post-integration evaluation.