A recent study by Joseph F. Brazel, Matthew Starliper, and Yao Yu explores the intricate dynamics of management communication styles when disclosing material weaknesses in internal control over financial reporting (ICFR). The research, published in Accounting Horizons, highlights significant findings that question how communication approaches can impact investor perceptions and decisions. Under Section 404 of […]

In a recent article by Joseph F. Brazel, Matthew Starliper, and Yao Yu, published in Accounting Horizons, the authors investigate how management’s communication style when disclosing material weaknesses in internal control affects investor perceptions. Under Section 404 of the Sarbanes-Oxley Act, management must disclose the effectiveness of their internal controls over financial reporting, but how […]

A recent study by Mohan Fonseka, Omar Al Farooque, Xing Yang, and Wu Qilin, published in the International Journal of Auditing, examines the impact of internal control quality and mandatory internal control disclosure regulations on executive perks in Chinese firms. Spanning a dataset from 2008 to 2019, the research delves into how these factors influence […]

The world of auditing is constantly evolving, and how audit firms and individual partners report key audit matters (KAMs) can significantly impact financial transparency. A recent study by Rousseau and Zehms, titled „It’s a Matter of Style: The Role of Audit Firms and Audit Partners in Key Audit Matter Reporting,“ published in Contemporary Accounting Research, […]

The accounting profession continually evolves, adapting to global talent dynamics and regulatory landscapes. A recent study by Frost, Jing, Shang, and Su, published in Contemporary Accounting Research, titled “Foreign Labor and Audit Quality: Evidence from Newly Hired H‐1B Visa Holders,” explores a particularly intriguing facet of this evolution: the influence of foreign labor on audit […]

A new study by Dain C. Donelson, Matthew Kubic, and Sara Toynbee, published in the Journal of Accounting and Economics, delves into the patterns of enforcement actions by the Securities and Exchange Commission (SEC), uncovering a significant increase in activity in September each year. This phenomenon, termed the „September spike,“ suggests a potential inconsistency in […]

The audit profession, known for its demanding busy seasons, faces scrutiny not only for the impact of high workloads on audit quality but also on its appeal as a career choice. This is highlighted in a recent study by Marlies de Vries and Roland F. Speklé, published in Behavioral Research in Accounting, which examines how […]

In the dense, often opaque world of corporate financial disclosures, the use of infographics is becoming increasingly prevalent, transforming how companies communicate complex financial data. A study by Theodore E. Christensen, Karson E. Fronk, Joshua A. Lee, and Karen K. Nelson, featured in the Journal of Accounting and Economics, takes a comprehensive look at this […]

Recent research by Bidisha Chakrabarty, Michael Hyman, and Gopal V. Krishnan has shed light on how auditors react to non-financial misconduct within corporations. Their study, published in the International Journal of Auditing, utilizes a novel database to track penalties from federal, state, and local agencies for violations not directly related to financial reporting. The findings […]

In a world where data proliferates at an unprecedented rate, understanding and managing alternative data, or ‚altdata‘, is becoming increasingly critical for organizations. Altdata encompasses information that exists outside of traditional financial and regulatory reporting channels—ranging from social media insights to geolocation data and beyond. As the digital landscape expands, so does the scope and […]

In the digital age, artificial intelligence (AI) has evolved from a futuristic vision to a core component of business strategy. This transition, especially with the advent of Generative AI, places AI at the heart of business technology, compelling businesses to reassess its potential impact critically. The latest insights from the National Association of Corporate Directors’ […]

In a revealing study that illuminates the shadowy depths of corporate fraud, Alexander Dyck, Adair Morse, and Luigi Zingales explore the real magnitude of corporate misconduct and its financial implications on a global scale. Published in the „Review of Accounting Studies,“ their research employs a novel approach by leveraging the fallout from Arthur Andersen’s demise […]

In the dynamic landscape of organizational management, the strategies employed to motivate employees and enhance performance have always been a subject of extensive research and debate. A recent study conducted by D. Kip Holderness, Kari Joseph Olsen, and Todd A. Thornock, and published in Behavioral Research in Accounting, takes a closer look at the nuanced […]

On January 25, 2024, Securities and Exchange Commission (SEC) Chair Gary Gensler delivered a speech highlighting the significance of shortening the settlement cycle in financial markets. In his address, Chair Gensler emphasized the impact of this move on market efficiency, risk reduction, and investor benefits. The GameStop Events: A Reminder of Market Plumbing Chair Gensler […]

In the realm of corporate finance and reputation management, the question of how to effectively repair a company’s image after a financial restatement is a critical one. Lei Dong and Y. Ken Wang address this issue in their study, „Reputation Repair after a Restatement: The Role of Corporate Social Responsibility Disclosure,“ published in the Journal […]

In the intricate world of occupational fraud, the decisions victim organizations make about punishing perpetrators are as varied as they are complex. A recent study published in the Journal of Forensic Accounting Research by Erlina Papakroni, Marie Rice, and Lisa M. Dilks delves deep into this subject. The research, utilizing data from the Association of […]

In the picturesque town of Davos, Switzerland, the 54th Annual Meeting of the World Economic Forum recently convened, bringing together a diverse array of global leaders against a backdrop of mounting geo-political tensions and emerging global challenges. Davos, known for its serene landscapes, transformed into a bustling hub of global discourse as over 60 heads […]

In the rapidly evolving world of accounting, a recent study sheds light on two crucial factors influencing accounting students‘ commitment to the profession: the sense of belonging and the impact of stereotype threat. Cristina Bailey, Serena Loftus, and Sarah Shonka McCoy delve into this topic in their article, „Do I Belong? The Impact of Belongingness […]

In a world where diversity and inclusion are becoming increasingly important in the workplace, a recent research article titled „Perceived Organizational Inclusion: Evidence from Neurodivergent Accountants in the U.S.“ by Loreal Jiles, Qi Duong (Susie), and Roopa Venkatesh explores the intersection of neurodiversity and the accounting profession. This study sheds light on the challenges faced […]

Drawing on organizational legitimacy theories, a recent research paper suggests that managers may adopt similar accounting practices as industry leaders to gain credibility and legitimacy. Especially for newly appointed CEOs, mirroring the accounting behaviors of industry leaders can serve as a signal of trustworthiness in an environment where stakeholders might be uncertain about their capabilities. […]

Earnings management has long been a concern in the corporate world, with companies striving to meet or beat analysts‘ earnings forecasts through various accounting tactics. External auditors play a critical role in curbing opportunistic earnings management behavior and providing financial statement reliability. However, recent research by Eric Lohwasser and Yaou Zhou explores how companies that […]

Whistleblower programs have undoubtedly made their mark in the corporate sector, acting as a formidable tool in the fight against unethical behavior. Yet, when we pivot our attention to the academic realm, especially where student policies for reporting peer misconduct are concerned, a glaring gap emerges. F. Todd DeZoort’s enlightening research, published in the esteemed […]

The Public Company Accounting Oversight Board (PCAOB) has introduced critical audit matters (CAMs) to expand audit reports to provide external users with more information regarding potential risks of material misstatements. While the intention of CAM disclosures is to highlight the risk of material misstatement and the corresponding audit procedures, early studies suggest that investors may […]

A newly published paper in Accounting Horizons highlights the implications of frequent auditor switching for the audit quality. The paper is particularly significant for regulators, practitioners, and academics to inform policy discussions, audit committee disclosure requirements, risk models, investment decisions, and future research on auditor switching. Existing accounting research primarily focuses on single-instance auditor changes […]

A newly released paper emphasizes the significance of risk governance in organizations and its susceptibility to internal and external influences. It underscores the importance of executives and boards in setting a strong tone at the top regarding risk governance in their organizations. This tone should prioritize and highlight the value and role of risk governance […]