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Steven E. Salterio - One of the best experts on this subject based on the ideXlab platform.

  • auditor client management relationships and roles in negotiating financial reporting
    Accounting Organizations and Society, 2008
    Co-Authors: Susan Mccracken, Steven E. Salterio, Michael Gibbins
    Abstract:

    We carry out an interview based field study of chief financial officer (CFO)-audit partner dyads to examine the assumption that the roles played by each side and the nature of the relationships are similar across negotiations. These dyads freely discussed with us their relationship, a specific issue negotiated and it's resolution process. Employing the lens of social positioning negotiation research, we find these negotiations are 'fluid', with continual redefinition not only of the substantive issues under negotiation, but also of the negotiation roles and relationships (i.e. 'shadow' negotiations). The CFO's actions and expectations in these 'shadow' negotiations appear to define the auditor's role and the relationship's parameters, but both can evolve over time. The audit partners express a desire to be in the "ideal" relationship where they assume the role of the 'expert advisor' (as opposed to a 'police officer') but they seemingly have no explicit strategy to move the relationship toward a 'proactive' (rather than 'reactive') state. Furthermore, the audit partner is always the 'relationship manager' whose job it is to see that client management remains "happy". These roles and relationships negotiated in the 'shadows' also affect how the negotiation process unfolds, including the set of alternative accounting treatments considered during negotiations. Finally, audit firms appear to manage the assignment of partners to engagements based on CFO preferences and remove those partners who are in "poor" relationships, irrespective of why the relationship is considered by the CFO to be "poor". Implications for the broader research program on auditor-client management negotiations are discussed.

  • the chief financial officer s perspective on auditor client negotiations
    Contemporary Accounting Research, 2007
    Co-Authors: Michael Gibbins, Susan Mccracken, Steven E. Salterio
    Abstract:

    Auditor-client negotiation about difficult client accounting issues involves both the auditor and the client. On the client side, the chief financial officer (CFO) plays a central role in the financial reporting process, yet is rarely the focus of academic study. This paper reports how a sample of Canadian CFOs viewed the negotiation process and context, using an experiential questionnaire to build on the negotiation model developed and demonstrated for the auditor side of the negotiation by Gibbins, Salterio, and Webb 2001, and corroborated by a comparison of common questionnaire items across auditor and CFO samples by Gibbins, McCracken, and Salterio 2005. The CFOs saw negotiation with the auditors as a consequence of change in accounting and disclosure standards or personnel influential to their financial reporting, or business changes, such as, new business deals or acquisitions. Negotiation was thrust upon the CFO, and the CFO then had to manage it. The CFOs informed other management (such as the CEO) and was aware of their interests, but did not generally seek their help. Informing the Board or the audit committee of the issue was much less frequent. The issue being negotiated was seen as complex, requiring research and analysis, and dependent on knowledge and expertise, with the result more likely reflecting form over substance (a result some CFOs suggested was more agreeable to the auditor than to the CFO).

  • negotiations over accounting issues the congruency of audit partner and chief financial officer recalls
    Ear and Hearing, 2005
    Co-Authors: Michael Gibbins, Susan Mccracken, Steven E. Salterio
    Abstract:

    Much of what takes place in auditor‐client management negotiations occurs in unobservable settings and normally does not result in publicly available archival records. Recent research has increasingly attempted to probe issues relating to accounting negotiations in part due to recent events in the financial world. In this paper, we compare recalls from the two sides of such negotiations, audit partners, and chief financial officers (CFOs), collected in two field questionnaires. We examine the congruency of the auditors' and the CFOs' negotiation recalls for all negotiation elements and features that were common across the two questionnaires (detailed analyses of the questionnaires are reported elsewhere). The results show largely congruent recall: only limited divergences in recall of common elements and features. Specifically, we show a high level of congruency across CFOs and audit partners in the type of issues negotiated, parties involved in resolving the issue, and the elements making up the negotiat...

  • completing and corroborating the model of auditor client negotiation about accounting issues by comparing auditor and chief financial officer views
    Social Science Research Network, 2004
    Co-Authors: Michael Gibbins, Susan Mccracken, Steven E. Salterio
    Abstract:

    Much attention is beginning to be paid to auditor client management negotiation as a result of recent events in the financial world. Gibbins, Salterio and Webb [GSW 2001] developed an accounting specific negotiation model and gathered collaborative data from audit partners. To lay the basis for further understanding of the dynamics of the negotiation process, our research examines the views of chief financial officers (CFOs) and compares and contrasts those views with GSW's auditors. The results (1) provide additional evidence of the model's generalizability; (2) advance evidence of congruencies and divergences in the recalled negotiations; and (3) allow for model modification and elaboration in light of having the views of both parties. We show a high level of congruency in the two groups in the recall of the issue type, the people and the elements involved in the negotiation process, as well as the relative importance of various accounting contextual features. We also identify some elements and features that may cause auditor client management negotiations to be mainly distributive (win-lose) both in bargaining and in outcomes. The new CFO data and comparisons to the auditor data suggest two principal model revisions: a reduction in the large number of contextual features into a parsimonious set of the most important features; and advice to users of the negotiation model to be sensitive to differences in the parties' interpretations of the model's elements and features.

Xue Wang - One of the best experts on this subject based on the ideXlab platform.

  • the importance of role specific performance and sociopolitical factors for chief financial officer employment outcomes
    Accounting Horizons, 2019
    Co-Authors: Ellen Engel, Feng Gao, Xue Wang
    Abstract:

    SYNOPSIS This paper investigates the importance of role-specific performance measures and sociopolitical factors in the career paths of CFOs. We find that forced CFO turnover is associated with poo...

  • the importance of role specific performance and sociopolitical factors for chief financial officer employment outcomes
    Social Science Research Network, 2018
    Co-Authors: Ellen Engel, Feng Gao, Xue Wang
    Abstract:

    We examine the determinants and performance consequences of chief financial officer (CFO) successions in years 2002-2008. We argue that if internal monitoring mechanisms are effective, forced CFO departures are more likely in firms with poor financial practices, followed by improvements in these financial practices. We find that (1) the probability of forced CFO turnover is associated with incidences of accounting restatements, internal control weaknesses, relatively severe financial constraints, receipt of SEC comment letters, and late regulatory filings; (2) CFO successions following forced turnover are associated with subsequent improvements in these financial outcomes. Several of these findings are specific to CFO turnover and succession and not to CEO turnover and succession, suggesting that CFOs are responsible for the outcomes of financial activities in which they have more direct influence and that successor CFOs have a direct impact on the subsequent financial outcomes.

  • responsibility accountability and sociopolitical factors a study of chief financial officer employment outcomes
    Social Science Research Network, 2018
    Co-Authors: Ellen Engel, Feng Gao, Xue Wang
    Abstract:

    We examine the determinants and performance consequences of chief financial officer (CFO) successions in years 2002-2008. We argue that if internal monitoring mechanisms are effective, forced CFO departures are more likely in firms with poor financial practices, followed by improvements in these financial practices. We find that (1) the probability of forced CFO turnover is associated with incidences of accounting restatements, internal control weaknesses, relatively severe financial constraints, receipt of SEC comment letters, and late regulatory filings; (2) CFO successions following forced turnover are associated with subsequent improvements in these financial outcomes. Several of these findings are specific to CFO turnover and succession and not to CEO turnover and succession, suggesting that CFOs are responsible for the outcomes of financial activities in which they have more direct influence and that successor CFOs have a direct impact on the subsequent financial outcomes.

  • chief financial officer succession and corporate financial practices
    Social Science Research Network, 2015
    Co-Authors: Ellen Engel, Feng Gao, Xue Wang
    Abstract:

    We examine the determinants and performance consequences of chief financial officer (CFO) successions in years 2002-2008. We argue that if internal monitoring mechanisms are effective, forced CFO departures are more likely in firms with poor financial practices, followed by improvements in these financial practices. We find that (1) the probability of forced CFO turnover is associated with incidences of accounting restatements, internal control weaknesses, relatively severe financial constraints, receipt of SEC comment letters, and late regulatory filings; (2) CFO successions following forced turnover are associated with subsequent improvements in these financial outcomes. Several of these findings are specific to CFO turnover and succession and not to CEO turnover and succession, suggesting that CFOs are responsible for the outcomes of financial activities in which they have more direct influence and that successor CFOs have a direct impact on the subsequent financial outcomes.

Michael Gibbins - One of the best experts on this subject based on the ideXlab platform.

  • auditor client management relationships and roles in negotiating financial reporting
    Accounting Organizations and Society, 2008
    Co-Authors: Susan Mccracken, Steven E. Salterio, Michael Gibbins
    Abstract:

    We carry out an interview based field study of chief financial officer (CFO)-audit partner dyads to examine the assumption that the roles played by each side and the nature of the relationships are similar across negotiations. These dyads freely discussed with us their relationship, a specific issue negotiated and it's resolution process. Employing the lens of social positioning negotiation research, we find these negotiations are 'fluid', with continual redefinition not only of the substantive issues under negotiation, but also of the negotiation roles and relationships (i.e. 'shadow' negotiations). The CFO's actions and expectations in these 'shadow' negotiations appear to define the auditor's role and the relationship's parameters, but both can evolve over time. The audit partners express a desire to be in the "ideal" relationship where they assume the role of the 'expert advisor' (as opposed to a 'police officer') but they seemingly have no explicit strategy to move the relationship toward a 'proactive' (rather than 'reactive') state. Furthermore, the audit partner is always the 'relationship manager' whose job it is to see that client management remains "happy". These roles and relationships negotiated in the 'shadows' also affect how the negotiation process unfolds, including the set of alternative accounting treatments considered during negotiations. Finally, audit firms appear to manage the assignment of partners to engagements based on CFO preferences and remove those partners who are in "poor" relationships, irrespective of why the relationship is considered by the CFO to be "poor". Implications for the broader research program on auditor-client management negotiations are discussed.

  • the chief financial officer s perspective on auditor client negotiations
    Contemporary Accounting Research, 2007
    Co-Authors: Michael Gibbins, Susan Mccracken, Steven E. Salterio
    Abstract:

    Auditor-client negotiation about difficult client accounting issues involves both the auditor and the client. On the client side, the chief financial officer (CFO) plays a central role in the financial reporting process, yet is rarely the focus of academic study. This paper reports how a sample of Canadian CFOs viewed the negotiation process and context, using an experiential questionnaire to build on the negotiation model developed and demonstrated for the auditor side of the negotiation by Gibbins, Salterio, and Webb 2001, and corroborated by a comparison of common questionnaire items across auditor and CFO samples by Gibbins, McCracken, and Salterio 2005. The CFOs saw negotiation with the auditors as a consequence of change in accounting and disclosure standards or personnel influential to their financial reporting, or business changes, such as, new business deals or acquisitions. Negotiation was thrust upon the CFO, and the CFO then had to manage it. The CFOs informed other management (such as the CEO) and was aware of their interests, but did not generally seek their help. Informing the Board or the audit committee of the issue was much less frequent. The issue being negotiated was seen as complex, requiring research and analysis, and dependent on knowledge and expertise, with the result more likely reflecting form over substance (a result some CFOs suggested was more agreeable to the auditor than to the CFO).

  • negotiations over accounting issues the congruency of audit partner and chief financial officer recalls
    Ear and Hearing, 2005
    Co-Authors: Michael Gibbins, Susan Mccracken, Steven E. Salterio
    Abstract:

    Much of what takes place in auditor‐client management negotiations occurs in unobservable settings and normally does not result in publicly available archival records. Recent research has increasingly attempted to probe issues relating to accounting negotiations in part due to recent events in the financial world. In this paper, we compare recalls from the two sides of such negotiations, audit partners, and chief financial officers (CFOs), collected in two field questionnaires. We examine the congruency of the auditors' and the CFOs' negotiation recalls for all negotiation elements and features that were common across the two questionnaires (detailed analyses of the questionnaires are reported elsewhere). The results show largely congruent recall: only limited divergences in recall of common elements and features. Specifically, we show a high level of congruency across CFOs and audit partners in the type of issues negotiated, parties involved in resolving the issue, and the elements making up the negotiat...

  • completing and corroborating the model of auditor client negotiation about accounting issues by comparing auditor and chief financial officer views
    Social Science Research Network, 2004
    Co-Authors: Michael Gibbins, Susan Mccracken, Steven E. Salterio
    Abstract:

    Much attention is beginning to be paid to auditor client management negotiation as a result of recent events in the financial world. Gibbins, Salterio and Webb [GSW 2001] developed an accounting specific negotiation model and gathered collaborative data from audit partners. To lay the basis for further understanding of the dynamics of the negotiation process, our research examines the views of chief financial officers (CFOs) and compares and contrasts those views with GSW's auditors. The results (1) provide additional evidence of the model's generalizability; (2) advance evidence of congruencies and divergences in the recalled negotiations; and (3) allow for model modification and elaboration in light of having the views of both parties. We show a high level of congruency in the two groups in the recall of the issue type, the people and the elements involved in the negotiation process, as well as the relative importance of various accounting contextual features. We also identify some elements and features that may cause auditor client management negotiations to be mainly distributive (win-lose) both in bargaining and in outcomes. The new CFO data and comparisons to the auditor data suggest two principal model revisions: a reduction in the large number of contextual features into a parsimonious set of the most important features; and advice to users of the negotiation model to be sensitive to differences in the parties' interpretations of the model's elements and features.

Ellen Engel - One of the best experts on this subject based on the ideXlab platform.

  • the importance of role specific performance and sociopolitical factors for chief financial officer employment outcomes
    Accounting Horizons, 2019
    Co-Authors: Ellen Engel, Feng Gao, Xue Wang
    Abstract:

    SYNOPSIS This paper investigates the importance of role-specific performance measures and sociopolitical factors in the career paths of CFOs. We find that forced CFO turnover is associated with poo...

  • the importance of role specific performance and sociopolitical factors for chief financial officer employment outcomes
    Social Science Research Network, 2018
    Co-Authors: Ellen Engel, Feng Gao, Xue Wang
    Abstract:

    We examine the determinants and performance consequences of chief financial officer (CFO) successions in years 2002-2008. We argue that if internal monitoring mechanisms are effective, forced CFO departures are more likely in firms with poor financial practices, followed by improvements in these financial practices. We find that (1) the probability of forced CFO turnover is associated with incidences of accounting restatements, internal control weaknesses, relatively severe financial constraints, receipt of SEC comment letters, and late regulatory filings; (2) CFO successions following forced turnover are associated with subsequent improvements in these financial outcomes. Several of these findings are specific to CFO turnover and succession and not to CEO turnover and succession, suggesting that CFOs are responsible for the outcomes of financial activities in which they have more direct influence and that successor CFOs have a direct impact on the subsequent financial outcomes.

  • responsibility accountability and sociopolitical factors a study of chief financial officer employment outcomes
    Social Science Research Network, 2018
    Co-Authors: Ellen Engel, Feng Gao, Xue Wang
    Abstract:

    We examine the determinants and performance consequences of chief financial officer (CFO) successions in years 2002-2008. We argue that if internal monitoring mechanisms are effective, forced CFO departures are more likely in firms with poor financial practices, followed by improvements in these financial practices. We find that (1) the probability of forced CFO turnover is associated with incidences of accounting restatements, internal control weaknesses, relatively severe financial constraints, receipt of SEC comment letters, and late regulatory filings; (2) CFO successions following forced turnover are associated with subsequent improvements in these financial outcomes. Several of these findings are specific to CFO turnover and succession and not to CEO turnover and succession, suggesting that CFOs are responsible for the outcomes of financial activities in which they have more direct influence and that successor CFOs have a direct impact on the subsequent financial outcomes.

  • chief financial officer succession and corporate financial practices
    Social Science Research Network, 2015
    Co-Authors: Ellen Engel, Feng Gao, Xue Wang
    Abstract:

    We examine the determinants and performance consequences of chief financial officer (CFO) successions in years 2002-2008. We argue that if internal monitoring mechanisms are effective, forced CFO departures are more likely in firms with poor financial practices, followed by improvements in these financial practices. We find that (1) the probability of forced CFO turnover is associated with incidences of accounting restatements, internal control weaknesses, relatively severe financial constraints, receipt of SEC comment letters, and late regulatory filings; (2) CFO successions following forced turnover are associated with subsequent improvements in these financial outcomes. Several of these findings are specific to CFO turnover and succession and not to CEO turnover and succession, suggesting that CFOs are responsible for the outcomes of financial activities in which they have more direct influence and that successor CFOs have a direct impact on the subsequent financial outcomes.

James S. Denford - One of the best experts on this subject based on the ideXlab platform.

  • the chief information officer and chief financial officer dyad in the public sector how an effective relationship impacts individual effectiveness and strategic alignment
    Journal of Information Systems, 2013
    Co-Authors: Kurt Schobel, James S. Denford
    Abstract:

    ABSTRACT:  Within the domain of Information Technology Governance (ITG), the study of chief Information officer (CIO) relationships has historically focused on the chief Executive officer (CEO) and the Top Management Team (TMT). Within knowledge-intensive, publicly funded, and not-for-profit organizations, the specific relationship between the CIO and the chief financial officer (CFO) is a critical pairing, which impacts both individual effectiveness and strategic alignment. Findings from multiple case studies suggest that while the CIO and CFO pair are similar to other TMT relationships in many ways, their perceptions of the other's strategic role within the organization is a key differentiator that can lead to effective or adversarial relationships with individual and firm-level outcomes. The research model in this paper suggests that when the relationship is positive, both individual role effectiveness and strategic alignment improve.

  • The chief Information officer and chief financial officer Dyad--How an Effective Relationship Impacts Individual Effectiveness and Strategic Alignment
    2012 45th Hawaii International Conference on System Sciences, 2012
    Co-Authors: James S. Denford, Kurt B. Schobel
    Abstract:

    Study of chief Information officer (CIO) relationships has historically focused on the chief Executive officer (CEO) and the Top Management Team (TMT). We propose that within publicly funded and not-for-profit organizations, the specific relationship between the CIO and the chief financial officer (CFO) is a critical pairing that impacts both individual effectiveness and strategic alignment. Our findings suggest that while the CIO and CFO pair are similar to other TMT relationships in many ways, their perceptions of the other's strategic role within the organization is a key differentiator that can lead to effective or adversarial relationships with individual and firm-level outcomes. When the relationship is positive, both individual role effectiveness and strategic alignment improve.