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This paper traces the evolution of risk management practices in a global technology company between 2000 and 2015. We extend recent research that has highlighted the emotional aspects of riskwork. We detail how a passionate interest—‘we can do better at risk management’—emotionally ‘hooked’ the staff in the company's Sourcing Unit. Risk management, emotion, and management controls were intertwined...
We propose a supplementary way to assess the information content of a financial statement disclosure based on the comovement of asset returns in different markets in response to information that has price implications for both. The influence of a signal that strongly influences at least two asset markets measures a dimension of information content less clearly reflected in single‐market responses...
Accounting has few heroes, but one that most acknowledge as worthy of that accolade is Luca Pacioli, the man who published the first printed exposition of double entry bookkeeping in 1494. This was the publication that led to the development of the accounting systems we use today. However, if we consider our literature on Pacioli, it is found to be not just confusing and contradictory, but undecided...
In many areas of science, including business disciplines, statistical decisions are often made almost exclusively at a conventional level of significance. Serious concerns have been raised that this contributes to a range of poor practices such as p‐hacking and data‐mining that undermine research credibility. In this paper, we present a decision‐theoretic approach to choosing the optimal level of...
Two competing hypotheses have been developed for the relationship between internal corporate governance and external auditing. One proposes a complementary relationship, while the other suggests it is substitutable. This study takes advantage of China's recent anti‐corruption campaign as a quasi‐natural experiment to explore this relationship. Using a difference‐in‐differences approach, we find that,...
This paper examines whether the ‘style’ of individual auditors influences financial reporting quality in Germany. Audit quality in Germany should be uniformly high, because of strong reputational needs, strict controls on operating procedures, and quality enforcement mechanisms. An audit partner's style should not affect this quality level. However, our results do not support this expectation. Exploiting...
Focusing on closed‐end investment funds, this paper examines whether the value relevance attached to fair value estimates is influenced by the type of investment being held. Our premise is that the fair values of different investment types rely on different valuation models and imply different underlying risks. Using hand‐collected US closed‐end funds data from 2009 to 2011, our results show that...
He et al. (2018) find achievement‐striving analysts exert more effort and exhibit better performance. In this study, we also employ the facial width‐to‐height ratio (fWHR) of analysts as a proxy for achievement drive to re‐examine the performance of achievement‐striving analysts. We argue that achievement‐striving analysts’ superior performance can be alternatively explained by their opportunistic...
This study empirically investigates the role of political connections in corporate environmental spending. It employs a sample of listed Chinese firms from polluting industries within the 2010–2013 period. Our empirical results show that having politicians as directors reduces the magnitude of discharge fees. We also find that such reductions are more pronounced in firms with a higher ratio of politically...
Using a large sample of US data, we examine the relationship between asset redeployability and corporate tax avoidance. We also examine the extent to which asset redeployability influences tax avoidance directly and indirectly (through financing constraints channel). We find a significant negative relationship between asset redeployability and tax avoidance, implying that firms with more redeployable...
This paper investigates how damage apportionment between auditor and auditee affects the quality of the internal control system (ICS), the supplied audit quality, and social welfare. The analysis takes place in a setting where the audit is not only required to meet obligations towards the primary addressees of the audited report, but where the auditor assumes a public responsibility that also makes...
In the literature, the integration of the cash and risk effects of executive compensation into company valuation is discussed only marginally. This paper addresses the question of how these effects can be integrated into corporate valuation. Several methods for solving the problem are discussed and a method free of circular references, similar to the adjusted present value approach to company valuation,...
Focusing on the four most recent and highly publicized accounting reforms in UK central government, and utilizing discourse analysis of official publications, together with semi‐structured interviews, this paper examines the basis on which these four reforms were introduced, the extent to which they are considered appropriate, and the reasons for the persistence of new public management (NPM)‐inspired...
This article offers a systematic literature review and a bibliometric analysis of articles published over the history of the journal Abacus and marks its 55th anniversary. The article draws on the latest available bibliometric tools to provide a citation map, burstiness analysis, and further visualization using R Bibliometrix, highlighting highly cited articles and their interrelations across different...
This study explores the determinants and incremental usefulness of disclosing components of operating cash flow (CFO) using the direct method in a voluntary US setting and in the Australian setting where it was mandatory prior to 2007. Based on the US voluntary sample, we find that relatively highly levered firms issuing new debt are more likely to voluntarily adopt the direct method. The results...
A large number of empirical studies have addressed the effects of adoption of International Financial Reporting Standards (IFRS), but the results have been mixed. We use a meta‐analysis of 56 empirical studies with 1,265 effect sizes to determine the impact of adoption of IFRS on financial reporting comparability, market liquidity, cost of equity, and cost of debt. This approach provides an objective...
This study reveals themes and trends in accounting research over the past 20 years by utilizing natural language processing and text‐mining techniques. We generated a corpus consisting of over 40,000 articles through multiple searches in EBSCOhost Business Source Premier, Scopus, and ScienceDirect to gather data from 30 highly ranked (A* and A) journals that were listed and categorized by the Australian...
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