The Experts below are selected from a list of 15159 Experts worldwide ranked by ideXlab platform
Marcy L Shepardson - One of the best experts on this subject based on the ideXlab platform.
-
do sox 404 control audits and management assessments improve overall internal control system quality
The Accounting Review, 2016Co-Authors: Joseph H Schroeder, Marcy L ShepardsonAbstract:ABSTRACT: We address whether SOX 404(b) internal control audits under two Auditing Standards regimes and SOX 404(a) management assessments are associated with improved internal control system quality, an important and largely unstudied potential benefit. In 2013, the PCAOB disclosed that 15 percent of inspected control audits were ineffective, suggesting that the current control Auditing standard may not be sufficient to induce implementation of high-quality control systems. We use an indirect measure of internal control system quality—future unaudited accruals quality—to proxy for internal control quality because sustained internal control improvements should be exhibited in future quarterly financial reports unaltered by contemporaneous financial statement audits. We find that internal control audits initially provided internal control quality benefits. After the 2007 Auditing Standards change, internal control quality deteriorated for ICFR audited versus unaudited firms. Finally, we find limited eviden...
-
do sox 404 control audits and management assessments improve overall internal control system quality
Social Science Research Network, 2015Co-Authors: Joseph H Schroeder, Marcy L ShepardsonAbstract:We address whether SOX 404(b) internal control audits under two Auditing Standards regimes and SOX 404(a) management assessments are associated with improved internal control system quality, an important and largely unstudied potential benefit. In 2013, the PCAOB disclosed fifteen percent of inspected control audits were ineffective, suggesting the current control Auditing standard may not be sufficient to induce implementation of high quality control systems. We use an indirect measure of internal control system quality – future unaudited accruals quality – to proxy for internal control quality because sustained internal control improvements should be exhibited in future quarterly financial reports unaltered by contemporaneous financial statement audits. We find internal control audits initially provided internal control quality benefits. After the 2007 Auditing Standards change, internal control quality deteriorated for ICFR audited versus unaudited firms. Finally, we find limited evidence that management assessments affect internal control quality. Results indicate recent PCAOB concerns may have merit.
Ann G Backof - One of the best experts on this subject based on the ideXlab platform.
-
the impact of audit evidence documentation on jurors negligence verdicts and damage awards
The Accounting Review, 2015Co-Authors: Ann G BackofAbstract:ABSTRACT: Audit workpapers play a key role in auditor negligence trials, yet little is known about how workpaper documentation affects jurors' decision making. I investigate how auditors' documentation of their consideration of the alternative accounting treatments and their risk-based audit approach influence jurors' negligence verdicts and damage awards. I find that documentation of their consideration of the accounting alternatives increases the likelihood that auditors are found negligent because it increases jurors' perceptions of the foreseeability of the misstatement. However, when combined with documentation that explicitly links the audit risks to the work performed to address each risk, jurors award lower damage awards because they perceive auditors' actions prior to the negligent act as more compliant with the Auditing Standards. My results highlight the consequences of more complete documentation on jurors' evaluations of auditors and suggest the need for documentation policies that more effec...
-
the impact of audit evidence documentation on jurors negligence verdicts and damage awards
Social Science Research Network, 2014Co-Authors: Ann G BackofAbstract:Audit workpapers play a key role in auditor negligence trials, yet little is known about how workpaper documentation affects jurors’ decision making. I investigate how auditors’ documentation of their consideration of the alternative accounting treatments and their risk-based audit approach influence jurors’ negligence verdicts and damage awards. I find that documentation of their consideration of the accounting alternatives increases the likelihood that auditors are found negligent because it increases jurors’ perceptions of the foreseeability of the misstatement. However, when combined with documentation that explicitly links the audit risks to the work performed to address each risk, jurors award lower damage awards because they perceive auditors’ actions prior to the negligent act as more compliant with the Auditing Standards. My results highlight the consequences of more complete documentation on jurors’ evaluations of auditors and suggest the need for documentation policies that more effectively communicate the appropriateness of auditors’ professional judgments.
Zhen Shi - One of the best experts on this subject based on the ideXlab platform.
-
does improved disclosure lead to higher executive compensation evidence from the conversion to ifrs and the dual class share system in china
Journal of Corporate Finance, 2018Co-Authors: Zhen ShiAbstract:Abstract Exploiting an exogenous disclosure rule change and the unique dual-class share system in China, this study tests whether improved information disclosure leads to higher executive compensation. Consistent with the theoretical prediction in Hermalin and Weisbach (2012), we find that after China adopted a set of tightened accounting and Auditing Standards in 2007, executive compensation increased by about 15% relative to the control firms. Our results support the argument that, because the better monitoring allowed by increased disclosure tends to affect managers adversely, managerial compensation rises as a compensating differential.
-
does improved disclosure lead to higher executive compensation evidence from the convergence to ifrs and the dual class share system in china
Social Science Research Network, 2017Co-Authors: Zhen ShiAbstract:Exploiting an exogenous disclosure rule change and the unique dual-class share system in China, this study tests whether improved information disclosure leads to increased executive compensation. Consistent with the theoretical prediction in Hermalin and Weisbach (2012), we find that after China adopted a set of tightened accounting and Auditing Standards in 2007, the executive compensation increased by about 15% relative to the control firms. Our results support the argument that, because better monitoring allowed by increased disclosure tends to affect managers adversely, managerial compensation rises as a compensating differential. Our findings suggest that the recent increasing trend in executive compensation could, in part, be attributed to greater disclosure imposed by governance reforms.
Joseph H Schroeder - One of the best experts on this subject based on the ideXlab platform.
-
do sox 404 control audits and management assessments improve overall internal control system quality
The Accounting Review, 2016Co-Authors: Joseph H Schroeder, Marcy L ShepardsonAbstract:ABSTRACT: We address whether SOX 404(b) internal control audits under two Auditing Standards regimes and SOX 404(a) management assessments are associated with improved internal control system quality, an important and largely unstudied potential benefit. In 2013, the PCAOB disclosed that 15 percent of inspected control audits were ineffective, suggesting that the current control Auditing standard may not be sufficient to induce implementation of high-quality control systems. We use an indirect measure of internal control system quality—future unaudited accruals quality—to proxy for internal control quality because sustained internal control improvements should be exhibited in future quarterly financial reports unaltered by contemporaneous financial statement audits. We find that internal control audits initially provided internal control quality benefits. After the 2007 Auditing Standards change, internal control quality deteriorated for ICFR audited versus unaudited firms. Finally, we find limited eviden...
-
do sox 404 control audits and management assessments improve overall internal control system quality
Social Science Research Network, 2015Co-Authors: Joseph H Schroeder, Marcy L ShepardsonAbstract:We address whether SOX 404(b) internal control audits under two Auditing Standards regimes and SOX 404(a) management assessments are associated with improved internal control system quality, an important and largely unstudied potential benefit. In 2013, the PCAOB disclosed fifteen percent of inspected control audits were ineffective, suggesting the current control Auditing standard may not be sufficient to induce implementation of high quality control systems. We use an indirect measure of internal control system quality – future unaudited accruals quality – to proxy for internal control quality because sustained internal control improvements should be exhibited in future quarterly financial reports unaltered by contemporaneous financial statement audits. We find internal control audits initially provided internal control quality benefits. After the 2007 Auditing Standards change, internal control quality deteriorated for ICFR audited versus unaudited firms. Finally, we find limited evidence that management assessments affect internal control quality. Results indicate recent PCAOB concerns may have merit.
T J Wong - One of the best experts on this subject based on the ideXlab platform.
-
the impact of improved auditor independence on audit market concentration in china
Journal of Accounting and Economics, 1999Co-Authors: Mark L Defond, T J WongAbstract:In an attempt to increase credibility in its capital markets, China recently adopted new Auditing Standards. Consistent with increased auditor independence, we "nd that the frequency of modi"ed opinions increases nine-fold subsequent to the adoption of the new Standards. However, the increase in modi"ed reports is followed by a decline in audit market share among large auditors } those with the greatest propensity to issue modi"ed reports. We conjecture that this &#ight from audit quality’ results from lack of incentives to demand independent auditors. Our "ndings suggest that government regulation alone is insu$cient to create "nancial markets that foster auditor independence. ( 2000 Elsevier Science B.V. All rights reserved. JEL classixcation: G38; L15; L84; M4; O16; O53; P23
-
the impact of improved auditor independence on audit market concentration in china
Social Science Research Network, 1999Co-Authors: Mark L Defond, T J WongAbstract:In an effort to increase the credibility of financial information in its emerging capital markets, China recently adopted rigorous new Auditing Standards designed to increase auditor independence. Consistent with increased auditor independence, we find that the frequency of modified opinions increases nine-fold subsequent to the adoption of the new Standards. However, the increase in modified reports is immediately followed by a large decline in audit market share among the largest auditors -- those with the greatest propensity to issue modified reports. We conjecture that this "flight from audit quality" results from the absence of market-based incentives for Chinese managers to demand independent auditors. Our findings suggest that government regulation alone is not sufficient to create financial markets that foster auditor independence.