bluuebunny/crossref_metadata_2025 huggingface dataset:
An Examination of Ethical Research Conduct by Experienced and Novice Accounting Academics
Authors: Meyer Michael J. , McMahon Dave
Published: April 2008

We conducted a survey of experienced researchers (members of certain AAA journal editorial boards) and novice researchers (participants of three recent AAA New Faculty Consortia) regarding their evaluations of 30 research behaviors. The behaviors covered co-authorship issues, submission/streaming issues, data issues, reporting/reference/citation issues, and conduct with peer issues. Participants were asked to evaluate these behaviors as to their appropriateness, perceived occurrence, and firsthand knowledge. Seventy experienced researchers and 106 novice researchers participated by completing the questionnaire. We found a great deal of consistency between experienced and novice researchers in the evaluations of the behaviors. However, we found that many of the behaviors considered inappropriate were believed to occur in accounting research. Further, there was a surprising degree of firsthand knowledge that these behaviors occur. We found that the appropriateness rating was related to firsthand knowledge.
Factors Affecting the Supply of Accounting Graduates
Authors: Billiot Mary Jo , Glandon Sid , McFerrin Randy
Published: April 2008

We use a cobweb model to construct a labor market model that can be used to analyze the impacts of changing labor market conditions on the market for new accounting graduates. These conditions are partitioned into macroeconomic and academic-specific changes. We find that 73.2 percent of the decline in the number of accounting baccalaureate degrees since 1990 can be explained by such factors as the decline in the relative salaries of entry-level accountants, the decline in academic preparedness of incoming freshmen, implementation of the 150-hour requirement, and increases in freshmen enrollments. Furthermore, we explain 60.1 percent of the observed increase in master's level accounting degrees. This increase can be attributed to a rise in the salary premium associated with earning a master ‘s degree and implementation of the 150-hour requirement.
Hard Times and Harder Choices: An Instructional Case Focusing on Ethical Responsibilities of CPAs in Public Practice
Authors: Knapp Michael C. , Knapp Carol A.
Published: April 2008

CPAs in public practice often find themselves facing challenging, if not troubling, ethical dilemmas. In this case, you have an opportunity to “step into the shoes” of Thomas Forehand, the owner of a small accounting firm. After spending several years working in a major metropolitan area, Forehand and his wife decided that they wanted a different lifestyle for themselves and their children. Unfortunately, a nationwide recession has cost Forehand many of his clients and forced him to lay off two of his six employees. Desperate for new clients, Forehand must decide whether to accept an unusual but lucrative engagement proposed by a new client who suddenly appeared in his office one day. Eventually, the client explains the true nature of the engagement. At this point, Forehand must decide what to do. In this case, you will play the role of Forehand and decide what you would have done had you been in his shoes.
Preliminary Evidence on the Association between Critical Thinking and Performance in Principles of Accounting
Authors: Kealey Burch T. , Holland Jonna , Watson Marsha
Published: April 2008

This study tests whether critical-thinking skills can help explain the cross-sectional variation in student performance in principles of accounting. Prior research has used such measures as academic aptitude and demographic factors to explain performance in the principles of accounting class. We argue that success in principles of accounting also requires critical-thinking skills. We measured critical-thinking skills by using a holistic scoring process to evaluate student essays. Our results show that even after controlling for academic aptitude, our measure of critical-thinking skills contributes significantly to explaining the cross-sectional variation in student performance in an accounting principles class. Understanding the relationship between critical thinking and success in accounting may contribute not only to reducing the failure rate in principles of accounting, but also to encouraging an emphasis on critical thinking in the preparation of accounting professionals.
Activity-Based Costing and Cost Interdependencies among Products: The Denim Finishing Company
Authors: Caplan Dennis , Melumad Nahum D. , Ziv Amir
Published: April 2008

A fictional example illustrates how interdependencies among products in the production process, and the costs associated with those interdependencies, challenge the ability of cost accounting systems to generate decision-useful product cost information. The cost interdependency in the current example is a production-line change-over cost that is incurred to retool a machine whenever the production process changes from one product to another. Both marginal costing and full cost activity-based costing (ABC) are employed in an attempt to provide decision-relevant product-level information in connection with the decision to add a new product.
Lucent Loses Its Luster: Accounting for Investments Turned Bad
Authors: Gordon Teresa P. , Niles Marcia S.
Published: April 2008

This case provides a rich environment in which students can explore the challenges of applying Statement of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Investments, and Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income. By focusing on the stock performance of two technology firms, Lucent Technologies and Microsoft, the case exposes students to issues of determining when a stock price decline is other than temporary, the effects of timing on accounting reporting decisions, and the role of the auditor in determining fair financial reporting. The case provides a qualitative and quantitative application of the two standards that is more complex and less structured than that provided by an intermediate financial accounting text. The case also demonstrates that comprehensive income, unlike net income, is relatively stable and difficult to manipulate.
Reporting Earnings at Summer Technology—A Capstone Case Involving Intermediate Accounting Topics
Authors: Kohlbeck Mark
Published: April 2008

Summer Technology, Inc. (the Company) is a fast-growing high-technology firm and is facing many pressures, including those related to financial reporting. Financial analysts, however, are optimistic about the future of the Company. The firm is about to report its first annual profit, and the preliminary unreported results are just short of the analysts' consensus annual earnings forecast. This case requires financial analysis to evaluate a number of judgments involved in preparing financial statements and to prepare a recommendation to management with respect to reported earnings per share. The case's learning objectives are: (1) to increase understanding and exposure to the integration of financial reporting decisions with financial statement analysis, (2) to help students understand how business decisions impact reporting, (3) to demonstrate how decisions may be influenced by pressures to manage earnings and produce desirable financial results, and (4) to raise ethical issues in an accounting setting.
Mentoring Faculty to Improve Teaching and Student Learning
Authors: Brightman Harvey J.
Published: April 2008

For teaching to improve, three factors must be in place. First, the college must use a valid and reliable student evaluation instrument in combination with other feedback mechanisms. Second, there must be an accompanying norming report that provides comparative and diagnostic information to departmental chairs and teachers. Raw data from even a valid and reliable instrument may not be informative. Third, the college must have a mentoring process in place. This paper discusses briefly each of the three elements to initiate and sustain a successful mentoring program to improve teaching and student learning.
Q-Dots Incorporated: Assurance for a Nanotechnology Buyout
Authors: Phillips Fred , Kalesnikoff Doug
Published: April 2008

Q-Dots Incorporated is a nanotechnology firm that claims to be the original inventor and developer of quantum dots—a technology that has far-reaching applications in fields ranging from electronic consumer products to scientific discovery. The majority owner of Q-Dots is a scientist at heart, and wants to completely remove herself from the commercial side of her work. She has received a buy-out offer from her management team on which she has requested your firm's advice. Drawing on your knowledge of performance measurement and assurance, you will prepare a memo that analyzes how your firm will respond to her request.
The 150-Hour Requirement and the Number of CPA Exam Candidates, Pass Rates, and the Number Passing
Authors: Allen Arthur , Woodland Angela M.
Published: April 2008

This study examines the association of the 150-hour education requirement with the number of CPA exam candidates, pass rates, and the number passing. Proponents of the 150-hour requirement argue that additional education produces higher quality students who are better prepared for the CPA exam and accounting careers. Opponents argue it imposes opportunity costs on students and costly barriers to entry into public accounting. On average we find a large drop (36 percent) in the number of candidates in each state taking each exam, a small increase in pass rates for first-time candidates only (3 percent), and a large drop (31.5 percent) in the number passing the CPA exam after the 150-hour requirement. Our results may be useful to accounting educators evaluating the success of their 150-hour programs, state boards considering revisions of their 150-hour requirements, and public accounting firms setting strategies to achieve audit quality.
Aerospace Lighting, Inc. (ALI): Linking Business Strategy to Audit Planning
Authors: Martin Roger D. , Phillips Fred
Published: April 2008

Aerospace Lighting Inc. (ALI) is a supplier of cabin lighting systems to the aerospace industry. A recent change in ALI's ownership has prompted a change in the company's business strategy, as well as a change in the company's external auditors. As a member of the audit team, your assignment is to write a memo that identifies significant business risks facing ALI and elaborates on potential audit issues.
Perspectives on Auditing Education after Sarbanes-Oxley
Authors: Arens Alvin A. , Elder Randal J.
Published: April 2008

The events leading up to and culminating in the passage of the Sarbanes-Oxley Act of 2002 dramatically impacted the auditing profession and auditing practice. Auditing is again the primary revenue source at the major accounting firms and is growing significantly. The auditing environment after passage of the Act demands students with greater understanding of risk assessment, including business and fraud risks, forensic accounting skills, the ability to understand and document controls and link controls to assertions and audit evidence, and the competence to deal with corporate governance and other PCAOB requirements. Acquiring these skills will require changes in the basic auditing course and one or more advanced auditing courses, as well as changes in the core business and accounting curriculum.
Continuous Reporting and Continuous Assurance: Opportunities for Behavioral Accounting Research
Authors: Hunton James E. , Wright Arnold M. , Wright Sally
Published: April 2008

The movement to more continuous reporting (CR) and continuous assurance (CA) of financial statements appears to be a matter of when and how such changes will take place, rather than if they will occur. Research evidence suggests that computing infrastructures and software applications have advanced to the point where it is now technically and economically feasible to begin preparing and disseminating financial statements on at least a monthly basis (Hunton, Wright, and Wright 2003), and someday it is likely that full or partial financial and nonfinancial disclosures will be processed and presented in real time. Additionally, information consumers are demanding, and the Securities and Exchange Commission (SEC), American Institute of Certified Public Accountants (AICPA), and International Accounting Standards Board (IASB) are contemplating reporting and assurance changes of this nature. Thus, whether “continuous” is defined in terms of monthly, daily, hourly, or real-time reporting, rapidly converging market factors indicate that in the foreseeable future firms will publish and auditors will assure financial information on a more frequent basis than the current quarterly interval.

The major challenge going forward for behavioral researchers in accounting is to investigate how changes of this nature might affect the decision-making processes and consequential outcomes of various constituent groups, such as investors, preparers, and assurers. The combinations of affected parties, contexts, and tasks that could be examined are too numerous to explore in a single article. Accordingly, to keep the following discussion focused and manageable, the scope of this paper is aimed at understanding the potential impact of CR and CA on individual investors. Perhaps by identifying a number of the psychological issues and reviewing some of the studies in this area, accounting behavioral researchers will be motivated to investigate many of the issues and opportunities related to this new and exciting line of research.
The Predictive Ability of Geographic Segment Disclosures by U.S. Companies: SFAS No. 131 vs. SFAS No. 14
Authors: Behn Bruce K. , Nichols Nancy B. , Street Donna L.
Published: April 2008

This research considers whether recent modifications to segment reporting adequately address analysts' concerns regarding the usefulness of geographic data. Forecast errors for models utilizing SFAS No. 131 geographic sales data are compared to forecast errors for models utilizing SFAS No. 14 geographic sales data. The results indicate a significant improvement in the predictive accuracy of geographic sales disclosures provided under SFAS No. 131. Additional analysis suggests this enhanced predictability may be associated with the revised requirements that companies report sales for the country of domicile and for each individually material country. Overall, our findings appear to support the FASB's argument that segment information by country is more informative and useful. Based on our findings, recommendations are presented regarding possible amendments to SFAS No. 131 that may further enhance the predictive ability of geographic segment data.
Level of Economic Development of a Firm's Country of Domicile and the Patterns in Stock Market Reaction Surrounding U.S. Earnings Announcements: A Test of the Global Market Segmentation Hypothesis
Authors: Kang. Tony
Published: April 2008

Using the level of economic development as a proxy for the degree of capital market segmentation, this study tests the global market segmentation hypothesis, which predicts that the magnitude of the market's reaction to an earnings announcement of an American Depositary Receipt (ADR) firm will vary systematically with the extent to which the firm's home country capital market is segmented. Supporting this idea, the evidence shows that the earnings announcement of an emerging economy ADR induces a larger market reaction than a developed economy ADR. This finding contributes to the market segmentation literature by providing evidence that the market can remain segmented even after cross-listing in the sense that the information environment of firms from segmented economies remains weaker. It also extends prior literature on the information content of earnings by documenting that the degree of capital market segmentation in a multinational firm's country of domicile is an important determinant of the information content of its U.S. earnings announcement.
Relative Valuation Roles of Equity Book Value, Net Income, and Cash Flows during a Macroeconomic Shock: The Case of Mexico and the 1994 Currency Crisis
Authors: Davis-Friday Paquita Y. , Gordon Elizabeth A.
Published: April 2008

Using a sample of Mexican firms traded on the Mexican Stock Exchange during the period 1992–1997, we investigate whether the relation between the firms' stock prices and their book values, earnings, and cash flows changes during the 1994 Mexican currency crisis. In pooled cross-sectional tests we find the valuation coefficient on book value does not significantly change during the crisis period, while its incremental explanatory power increases. We also find the valuation coefficient on and incremental explanatory power of earnings decline during the crisis period. However, the decline in the valuation and explanatory power of earnings is attributable to the presence of negative earnings. These results are inconsistent with those from Barth et al. (1998) who find that the valuation and incremental explanatory power of book values (earnings) increase (decrease) as individual firms' financial health decreases in the U.S. Our results also differ from those of studies that examine the valuation of accounting information during the Asian financial crisis (Graham et al. 2000; Ho et al. 2001). Both Graham et al. (2000) and Ho et al. (2001) find that the relevance of earnings declines during the Korean currency crisis even after controlling for negative earnings. However, we find that when we control for negative earnings, the coefficient on earnings remains significant during the crisis period. We attribute the lack of significant changes in the valuation coefficients on book values and positive earnings and increased incremental explanatory power of book values at least in part to the use of current cost and price level accounting in Mexico. Related to this point, in additional analyses we find that the incremental valuation of two components of Mexican earnings, monetary gains and losses and exchange gains and losses, does not change during the crisis, implying that these features of Mexican inflation accounting contribute to its continued relevance during the crisis.
Auditor Independence and Audit Risk: A Reconceptualization
Authors: Fearnley Stella , Beattie Vivien A. , Brandt Richard
Published: April 2008

The principles-based U.K. regulatory framework for auditor independence (Chartered Accountants Joint Ethics Committee 1996), which was adopted in 1997, identifies threats to independence in fact, independence in appearance, and the safeguards that control these threats. These principles are incorporated in the International Federation of Accountants (IFAC 2001) ethics framework. Drawing on six case studies of interactions involving significant accounting issues between audit engagement partners and finance directors in U.K.-listed companies, we analyze the threats and safeguards to auditor independence in fact that are relevant to the outcome of each interaction. Despite the U.K.'s comprehensive regulatory framework for independence, audit quality control, and independent inspection of firms, not all the interactions have a fully compliant outcome. Independence in fact is compromised where the safeguards in the framework are insufficient defense against the threats, particularly regarding intimidation and bullying during the audit process. Further examples of existing threats are identified and additional threats emerge, in particular an urgency threat, and a loss of face threat. Management motivation is found to be a key driver of pressure. Threats to independence arising within audit firms are not recognized in the current U.K. audit risk model. An extended risk model incorporating within-firm risk is suggested. This study demonstrates the need for continual improvement to regulatory frameworks; in particular it supports the recent U.S. Securities and Exchange Commission (SEC) rule on improper influence on the conduct of audits (Securities and Exchange Commission 2003a).
On International Accounting Valuation
Authors: Liu Jing
Published: April 2008

This paper develops an accounting-based equity valuation model for multinational firms, and uses the model to examine the forecasting and valuation properties of foreign currency translation gains and losses (TGL). It shows that TGL can be systematically decomposed into a core component and a transitory component; and because the two components are negatively correlated, the combined effect is that TGL is “more transitory” than transitory earnings, mapping into value with a weight between zero and one. The analysis helps to resolve the classical debate on the value relevance of TGL by showing that the opposing views are special cases of a more general framework.
Merit Pay, Responsibility, and National Values: A U.S.–Taiwan Comparison
Authors: Brody Richard G. , Lin Suming , Salter Stephen B.
Published: April 2008

The extant U.S. domestic literature provides evidence that if administered in an unbiased manner, merit pay can be a significant motivator. However, the same literature shows that judgment biases can lead to over-rewarding of “favored failures,” individuals who receive favorable treatment despite their poor performance.

The cross-cultural literature provides evidence that collectivist societies treat some portion of “merit” pay as salary rewarding both successful and unsuccessful performers with some merit pay. There has been no test in this literature of the treatment of “favored failures” but theoretical arguments and evidence from the cross-cultural escalation of commitment literature suggests that collectivist societies may be less subject to the “favored failures” control problem. A “face” effect may offset the effect of collectivism in Chinese societies.

Using a behavioral experiment and subjects from countries that are at the extremes of Hofstede's (2000) individualism-collectivism spectrum (Taiwan, United States) this paper finds that evaluators (subjects) from the more individualist U.S., overall provide less merit less often to poor performers than the collectivist Taiwanese. The U.S. evaluators also display significantly greater judgment biases than the Taiwanese for poor performers to whom they have a prior commitment. Thus, both societies have biases but from different angles and, as such, present employers with different control issues.
Information Systems Outsourcing Announcements: Investigating the Impact on the Market Value of Contract-Granting Firms
Authors: Hayes David C. , Hunton James E. , Reck Jacqueline L.
Published: April 2008

The objective of this research project is to examine the impact of information systems (IS) outsourcing announcements on the market value of contract-granting firms. This study is important to researchers, professionals, and policy makers as it provides empirical evidence from the capital market that outsourcing is considered to be a value-added business exchange for contract-granting firms. Research findings indicate positive and significant market value gains for smaller vs. larger firms and service vs. nonservice industry firms. The significant effects observed in this study are explained by the existence of information asymmetry in the capital market for smaller firms and service firms, and by the relatively higher investment made by service firms in information technology. This study contributes to accounting research by examining the importance of providing financial report users with nonfinancial forward-looking information concerning management's strategic decisions, such as the decision to outsource IS functions. Additionally, the current study complements and extends extant IS outsourcing research, as it integrates efficient market and capital market theory into ongoing investigations aimed at identifying the underlying determinants of IS outsourcing decisions.
An Examination of the Effect of IT Investments on Firm Value: The Case of Y2K-Compliance Costs
Authors: Krishnan Gopal V. , Sriram Ram S.
Published: April 2008

In this study, using the recent Y2-compliance expenditures as an example, we examine whether disclosures relating to investments in information technology (IT) were relevant to investors in assessing the market value of equity. We use a sample of 190 firms that disclosed estimates of total Y2K-compliance costs in their 1997 annual reports to examine the association between Y2K-compliance costs and share prices. We test the joint hypothesis that Y2K-compliance costs were relevant to equity valuation of firms that chose to become Y2K-compliant and that these costs were sufficiently reliable to be reflected in share prices. We find that estimates of Y2K-compliance costs were positively and significantly related to share prices after controlling for earnings, book value of equity, and other factors. We find that the stock market is not shortsighted, and consider investments in Y2K-remediation efforts a significant and value-increasing activity for the average firm.
Information Technology-Related Activities of Internal Auditors
Authors: Hermanson Dana R. , Hill Mary Callahan , Ivancevich Daniel M.
Published: April 2008

Advances in information technology (IT) present important new organizational risks, and the assessment and management of these risks may involve a variety of groups, including internal auditors, external auditors, in-house IT experts, and outside consultants. To begin to understand how organizations are addressing their IT risks, this exploratory study examines the IT-related activities of one group—internal auditors.

Information gathered from over 100 internal audit directors indicates that internal auditors focus primarily on traditional IT risks and controls, such as IT asset safeguarding, application processing, and data integrity, privacy, and security. Much less work is done on system development and acquisition issues. Several factors are associated with internal auditors' performance of IT evaluations, including the nature of the audit objective, the prevalence of computer audit specialists on the internal audit staff, and the existence of new computerized systems. To supplement these results, we encourage further research on the efforts of other groups in addressing IT risks.
The Impact of Unit Goal Priorities, Economic Incentives, and Interim Feedback on the Planned Effort of Information Systems Professionals
Authors: Tuttle Brad M. , Harrell Adrian M.
Published: April 2008

Recent interest in aligning the activities of the individuals in information systems (IS) with the organization's strategic objectives suggests a need to understand the factors that influence the behavior of IS professionals. One way that organizations influence behavior is by setting goal priorities in connection with feedback and economic incentives. The objective of the present study is to examine how goal priority, feedback, and economic incentives influence IS professionals' planned effort as reflected by the time they would devote to each of two different goals. Research instruments were mailed to IS professionals at companies with 500 or more employees throughout the United States. A total of 196 instruments were returned yielding a response rate of 32.0 percent. In general, the participants were highly experienced, averaging 21.3 years in the IS profession and an average of 11.9 years in management. Results show IS professionals direct their planned effort toward the primary goal without the need for additional incentives. Conversely, incentives tied to the secondary goal direct planned effort away from the primary goal. The results of the experiment support a model of behavior contingent on goal priority, feedback, and economic incentives.
Contracting for Information System Outsourcing with Multiple Bidders
Authors: Yost Jeffrey A. , Harmon W. Ken
Published: April 2008

Outsourcing of information systems (IS) is becoming an increasingly popular phenomenon. However, most problems that arise in outsourcing arrangements can be traced to the contract between the company and the IS vendor. Of particular concern are the types of information available for contracting and the observability of that information. This paper examines the form of such outsourcing contracts by casting the problem in a principalagent setting using the theory of mechanism design. The analysis we provide helps to (1) define the optimal contract for IS outsourcing, (2) understand the effect of unobservability on the form of the contract, and (3) examine the effect of multiple bidders. In summary, our analysis finds support for the growing trend toward equity-based contracts and partnership agreements in outsourcing relationships.
Returns on Investments in Information Technology: A Research Synthesis
Authors: Dehning Bruce , Richardson Vernon J.
Published: April 2008

Understanding the return on investments in information technology (IT) is the focus of a large and growing body of research. The objective of this paper is to synthesize this research and develop a model to guide future research in the evaluation of information technology investments. We focus on archival studies that use accounting or market measures of firm performance. We emphasize those studies where accounting researchers with interest in market-level analyses of systems and technology issues may hold a competitive advantage over traditional information systems (IS) researchers. We propose numerous opportunities for future research. These include examining the relation between IT and business processes, and business processes and overall firm performance, understanding the effect of contextual factors on the IT-performance relation, examining the IT-performance relation in an international context, and examining the interactive effects of IT spending and IT management on firm performance.
Stevie: A Dynamic, Between-Instructor Collaborative Internet Tool for Learning Cardinalities
Authors: Geerts Guido L. , Waddington Barbara A. , White Clinton E.
Published: April 2008

Instructors increasingly use a data modeling approach to teach accounting information systems (AIS). An important part of data modeling is the specification of cardinalities. Cardinalities represent constraints on the participation of entities in a relationship and are used to express business practices. Stevie is an Internet tool that helps students learn cardinalities. Stevie has a number of unique features. First, Stevie is a collaborative effort; its content is created by a number of instructors. Second, Stevie is a dynamic Internet application. Dynamic Internet technology enables instructors to manage student accounts, add exercises, and create customized assignments. Further, customized assignments make it easy for instructors to adapt Stevie's content to specific learning objectives for their AIS course. For example, instructors can create assignments where students have to define stereotypical cardinality patterns or heuristics for REA relationships. Finally, Stevie supports accounting-specific classifications that make the creation of customized assignments for the AIS class easier.
Does the Year 2000 XBRL Taxonomy Accommodate Current Business Financial-Reporting Practice?
Authors: Bovee Matthew , Ettredge Michael L. , Srivastava Rajendra P. , Vasarhelyi Miklos A.
Published: April 2008

XBRL (eXtensible Business Reporting Language) is an application of XML (eXtensible Markup Language) intended for use in digital business reporting. Observers predict XBRL will provide benefits to firms that adopt it, such as enhancing information use, facilitating comparability and consistency, and providing technological capability for near-continuous financial reporting through the Web. However, questions arise regarding how well the proposed taxonomy for financial statements corresponds to firms' preferred reporting practices. We argue that a poor fit may lead to information loss and to subsequent resistance to use or general adoption of the taxonomy. A lack of fit could therefore negate anticipated firm or information-user benefits.

To address this issue, we assess how well the year 2000 version, for financial reporting by commercial and industrial (C&I) firms under U.S. GAAP, accommodates current financial-reporting practices of public companies. We attempt to match each line item in the 1999 annual financial statements of 67 companies with an XBRL taxonomy “tag,” employing two measures of the frequency of “special attention” (difficult-to-match) items as indicators of the quality of “fit” between the taxonomy and firms' reporting practices. Analyses show a good fit on average, but also indicate significant differences in the number and proportion of exceptions across financial statements and industries. In light of these results, we suggest modifications to the taxonomy and discuss the need for industry-specific taxonomies.
Impact of Information Technology on Public Accounting Firm Productivity
Authors: Banker Rajiv D. , Chang Hsihui , Kao Yi-ching
Published: April 2008

In recent years, information technology (IT) has played a critical role in the services provided by the public accounting industry. However, no empirical research has evaluated the impact of IT on public accounting firms. This study focuses on five offices of an international public accounting firm that recently made large IT investments, primarily in audit software and knowledge-sharing applications. Both qualitative and quantitative information from the research site are analyzed to estimate the change in productivity following the implementation of IT. The results from both regression analysis and Data Envelopment Analysis (DEA) indicate significant productivity gains following IT implementation, documenting the value impact of IT in a public accounting firm.
Web Assurance Seals: How and Why They Influence Consumers' Decisions
Authors: Odom Marcus D. , Kumar Anand , Saunders Laura
Published: April 2008

Internet commerce is exploding and predicted to continue growing at a rapid rate for several more years. Online businesses that have a desire to tap into this Internet commerce explosion are seeking ways to convince online browsers to become online purchasers. To achieve this goal, businesses need to find ways to alleviate consumers' fears and concerns about making online purchases. This paper reports on a series of three studies focused on (1) determining the fears and concerns that online consumers have, (2) examining whether the leading brands of web assurance seals (Verisign®, TRUSTe, Good House Keeping, and CPA WebTrust) can help alleviate those fears and concerns, and (3) gaining insights into the process by which web assurance seals can influence consumers' online purchase decisions.

This study identified seven distinct concerns that consumers had with purchasing goods/services online. Factor analysis revealed that these concerns were along two dimensions: concerns about the firm and concerns about technology. It was found that the leading brands of web assurance seals addressed only a few of the online purchasers' fears and concerns, and there was a big gap between consumers' needs for assurance and what they felt was being offered by the web seals. Further, it was also found that the process by which web assurance seals influenced consumers' online purchase behavior involved recognition of and familiarity with a particular web assurance seal, and possibly the number of associations consumers made with a particular web assurance seal.
Holistic, Continuous Assurance Integration: e-Business Opportunities and Challenges
Authors: Greenstein Marilyn M. , Ray Amy W.
Published: April 2008

This paper explores the impact of web-based e-business operations on client firm processes and accounting methods, and addresses related issues for accounting firm assurance services teams to consider. In particular, some of the complications and potential problems associated with the use of traditional assurance methods on e-businesses with digital operating environments are discussed. The flexibility required to respond to the everchanging business environment of e-enabled client firms will require accounting firm leaders to rethink and reengineer existing management structures and practices. While clients of accounting firms are realizing tremendous value by streamlining information flows and increasing information sharing internally and externally, accounting firms remain organized primarily into discreet functions that often compete internally for customers.

An e-business model, the Customer-Oriented Value Chain, is employed to frame the discussion of emerging accounting issues resulting from new digital business practices. Within this context we develop 16 propositions regarding potential methods accounting firms may consider applying for two purposes: (1) better alignment of traditional assurance practices with client firm e-business activities, and (2) better integration of existing assurance offerings.

Subsequently, the challenges associated with offering integrated assurance services given current accounting firm organizational structures is discussed and a model of suggested organizational changes to accounting firms is presented. This model is inspired by the CPA Vision Project, the AICPA's Certified Information Technology Professional (CITP) designation, and the new Global Business Credential initiatives, and is intended to serve as a prototype upon which to build improved organizational structures. Some of the potential benefits of reorganization and better services integration include more efficient use of firm resources, greater profitability, more efficient associate training, a clearer understanding of client business processes, and greater value provision to clients.
Discussion of Information System Assurance for Enterprise Resource Planning Systems: Unique Risk Considerations
Authors: O'Leary Daniel E.
Published: April 2008

Asking experts their opinion is an important methodology in those settings where the major issues have not been previously addressed, often early in the topic's research life cycle. Heterogeneous expert opinion (HEO) refers to gathering the opinion of experts that derive from a number of categories, e.g., partner, manager, and senior, or whether they are accountants or computer scientists. They are heterogeneous in that they are recognized as having different levels and/or types of expertise. Research of enterprise resource planning (ERP) systems must carefully examine expert opinion and determine when using HEO is appropriate and when it should be stratified. In addition, where possible, previous research needs to supplement or be compared to the HEO to determine similarities and differences with other groups.
Information System Assurance for Enterprise Resource Planning Systems: Unique Risk Considerations
Authors: Wright Sally , Wright Arnold M.
Published: April 2008

Enterprise Resource Planning (ERP) systems inherently present unique risks due to tightly linked interdependencies of business processes, relational databases, and process reengineering. Knowledge of such risks is important in planning and conducting assurance engagements of the reliability of these complex computer systems. Yet, there is little empirical evidence on this issue.

To examine this topic, a semi-structured interview study was conducted with 30 experienced information systems auditors (from 3 of the Big 5 firms) who specialize in assessing risks for ERP systems. This approach allowed us to obtain detailed information about participants' views and client experiences. The results indicate that the implementation process of ERP systems has an important impact on system reliability. Further, interviewees identified a number of common implementation problems (e.g., improperly trained personnel and inadequate process reengineering efforts) that result in heightened risks. Interviewees also reported that ongoing risks differ across applications and across vendor packages. Finally, in providing assurance on ERP systems participants overwhelmingly indicate a focus on testing the process rather than system output.
Developing an e-Commerce System Using Active Server Pages
Authors: Ingram Robert W. , Lunsford Dale L.
Published: April 2008

This paper describes a case to illustrate analysis, design, and implementation issues involving a multitier e-commerce system. The case is designed for use in advanced accounting systems or systems analysis and design courses. The case involves analysis of a sales order system that will be implemented using a web interface and relational database, conceptual design of the system, and implementation of the system. A variety of tasks are involved in the case, but an instructor can select the tasks of relevance in a particular course.
PMB Investments: An Enterprise System Implementation
Authors: Bagranoff Nancy A. , Brewer Peter C.
Published: April 2008

This case describes the implementation of an enterprise information system at the printed materials division of a multinational investment company. There are several issues in the implementation that are worthy of class discussion. These issues include enterprise system implementation rationale and investment justification, software and consultant selection, business process reengineering, change and project management, and evaluation of enterprise system success.
Professional Services, IBM, and the Holocaust
Authors: Dillard Jesse F.
Published: April 2008

IBM and the Holocaust both represent power, ideology, and rational administration. We view one as logical and commendable, the other as pathological and deplorable, and both as a manifestation of instrumental rationality. IBM and the Holocaust (Black 2001) explores the connect between IBM and its dynamic leader, Thomas J. Watson, and the program of genocide carried out against European Jewry over the 12-year reign of Germany's Third Reich. Those who controlled, applied, and supported IBM's information processing technology are implicated in operationalizing the lethal ideology of the National Socialist German Workers (Nazi) Party. Considering relationships between the fascist and the capitalist extremes provides a starting point in a dialogue that challenges the privileged position of instrumental rationality in evaluating choices related to the development, implementation, and application of information technology. The investigation of IBM and the Holocaust illustrates the potential for technology to reinforce, and be reinforced by, a prevailing ideology through the tangible manifestations of instrumental rationality: machines, professionals, and administrative structures. The ends to which the technology and its manifestations are applied by those implementing and supporting it become lost in striving to efficiently accomplish the immediate, intermediate tasks. The technological manifestations and their complicity in the Holocaust illustrate the inability of instrumental rationality to adequately incorporate the requisite ethical and moral dimensions, a lacuna no less present, though not so obvious, in actions undertaken within the current economic and political spheres by those employing the same tangible manifestations of instrumental rationality. The inability of those most directly implicated to reflexively consider the alliance of technology and ideology assures the continuing propensity of both good and evil. Unfortunately, the social systems that spawned the impressive technological developments do not provide adequate means for discerning and ethically evaluating the destructive and the creative potential.
The Posh Hairdo Salon Case
Authors: Walters Melissa , Normand Carol J.
Published: April 2008

The Posh Hairdo Salon (PHS) case is a practical research exercise for use in an upper-level undergraduate accounting information systems (AIS) course. In this case, students critically evaluate the appropriateness of popular accounting software applications and application service provider (ASP) solutions for a rapidly growing small business. To complete the case requirements, students must possess a basic understanding of business processes, transaction cycles, and accounting reporting systems. Students must also use the Internet to research and familiarize themselves with the functionality and features of the accounting software options, study readings from the professional literature, construct a written system requirements analysis and a comparative software options evaluation, and justify a final recommendation. Teaching Notes and case extensions appear in the latter sections of the paper; one possible grading key and an alternative case scenario appear as appendices.
St. Patrick Company: Using Role Play to Examine Internal Control and Fraud Detection Concepts
Authors: Janvrin Diane J.
Published: April 2008

This instructional case uses role play to provide students in accounting information systems or auditing with experience in evaluating a firm's internal control environment to assess the likelihood of errors and fraud. The objective is to illustrate how role play can reinforce two important systems/auditing topics: internal control evaluation and fraud detection. The case provides a framework for the discussion of internal control and fraud detection concepts developed in audit standards.
Shooting the Past: An Instructional Case for Knowledge Management
Authors: Malone J. David
Published: April 2008

This case for teaching knowledge management uses an episode of Mobil (now ExxonMobil) Masterpiece Theatre, “Shooting the Past,” and specifically the relationships among characters and objects, as a metaphor for knowledge management. The paper provides a written excerpt for use without the video; however, one can excerpt the video, available from WGBH in Boston (http://www.wgbh.org), to make a more powerful presentation. Instructors have effectively adapted the case in both undergraduate and graduate accounting information systems courses as well as among practicing professionals. The paper also includes discussions of knowledge management and several of its prevalent theories, as well as teaching notes for the case.
Accounting for the Development Costs of Internal-Use Software
Authors: Savage Arline , Callaghan Joseph H. , Peacock Eileen
Published: April 2008

In this paper, we evaluate accounting practices for internal-use software expenditures. Statement of Position No. 98-1 (SOP No. 98-1) requires expensing certain costs and capitalizing others. We argue that current accounting practice does not allow enough capitalization, since costs incurred during the systems analysis stage of model-based systems development are expensed regardless of whether they create future benefits. The quest for uniformity in accounting treatment in the form of a single rule for multiple economic phenomena (i.e., treating all systems acquisition and development methods the same) results in reduced ability to reflect economic differences between systems acquisition and development methods. To illustrate, we provide an example of the differential effects of adopting SOP No. 98-1 for firms using different development approaches. Under the SOP, “Analysis” costs are expensed. Under model-based approaches, especially those with downstream effects, these Analysis costs are assets, since the reason for these approaches is their ability to re-use models and objects developed in Analysis. Furthermore, since these costs tend to be relatively higher for companies leveraging these models and objects, the SOP has the effect of ignoring the future value associated with these models and objects. We propose a solution that is principles-based and provides a framework specifying the conditions under which capitalization or expensing should occur for internally developed software.