bluuebunny/crossref_metadata_2025_split huggingface dataset:
Communicating effectively with vulnerable populations during water contamination events
Authors: Nsiah-Kumi Phyllis A. 
Published: April 2008

Water contamination events are a public health concern worldwide with significant potential to impact the global community. When communicating with the public during these crisis situations, it is vital to consider the multiple audiences who receive the messages. Before developing or delivering messages to a particular community, it is essential to be familiar with the community's characteristics, needs, concerns, and who is considered credible to that community.
Vulnerable populations are those with difficulties in comprehension or accessibility that may limit their full understanding of risks and may mitigate the effectiveness of public health strategies. Vulnerable populations include, but are not limited to, the urban/rural poor, those who are mentally ill, intellectually disabled, medically vulnerable, at the extremes of age (children and the elderly), racial/ethnic minorities, and those with low literacy or limited English proficiency.
A water contamination event poses a unique opportunity to work with diverse populations to effectively convey important health messages. Each population needs to receive appropriate public health messages. Becoming familiar with vulnerable populations and their needs prior to a water contamination event will help in identifying barriers and developing and refining effective messages in such a crisis. In water contamination crises, our publics’ health depends on effective, targeted crisis communication.
An Exploratory Study of the Influence of Client Factors on Audit Time Budget Variances
Authors: Gist Willie E. , Davidson Ronald A. 
Published: April 2008

This study provides a descriptive analysis of audit time budgets and considers the effect of client factors on the achievement of audit time budgets. Using archival data obtained from four of the Big 6 firms, we find that differences between audit time budgets and reported audit hours are significantly related to factors reflecting client size, risk, complexity and profitability, ceteris paribus.
We also find that the degree to which client factors explain budget variances (defined as reported hours minus budgeted hours) depends on staff level. Specifically, differences in the achievement of audit time budgets for partners, seniors and juniors are related to certain client factors, but manager time is not. The results of the size variable suggest an attempt at substitution of more junior hours relative to other staff hours as the size of the auditee increases. Partner and senior models indicate a tendency for actual hours to be in excess of budgeted hours as size increases. Potential explanations for these and other findings along with the limitations and implications of the study are provided.
Are Audit Program Plans Risk-Adjusted?
Authors: Mock Theodore J. , Wright Arnold M. 
Published: April 2008

Prior archival and experimental studies provide conflicting results regarding the extent to which audit program plans are responsive to client risks, as prescribed by the Audit Risk Model. The purpose of this study is to corroborate and extend archival research on this issue by considering a broader set of client risks and incorporating a number of methodological improvements. Data were gathered on risk assessments and evidential plans in the accounts receivable area from the working papers of 74 randomly selected manufacturing clients (42 general manufacturing and 32 high-technology manufacturing).
The results indicate a statistical association between the level of and changes in a limited number of assessed client risks (e.g., management aggressiveness and the inherent risk of an existence misstatement) and evidential plans. In addition, audit programs were found to change little over time with many tests done across a broad array of engagements. Overall, the responsiveness of evidential plans to risks, although limited, was found to be greater in the present study than prior research. These results, which generally replicate prior research, indicate the lack of a strong relationship between client risks and audit programs and thus raise a number of important questions for audit theory, practice and training.
Auditor Selection and Audit Committee Characteristics
Authors: Abbott Lawrence J. , Parker Susan 
Published: April 2008

The role of the audit committee in corporate governance is the subject of increasing public and regulatory interest. We focus on one frequently noted function of the audit committee: auditor selection. We argue that independent and active audit committee members demand a high level of audit quality because of concerns about monetary or reputational losses that may result from lawsuits or SEC sanction. Auditors who specialize in the client's industry are expected to provide a higher level of audit quality than do nonspecialists. Thus, we predict that firms with audit committees that are both independent and active are more likely to employ an industry-specialist auditor.
We find that firms with audit committees that do not include employees and that meet at least twice per year are more likely to use specialists. This study contributes to our understanding of audit committee functions and provides evidence that industry specialization is an important element of auditor selection.
Long-Term Trends in Audit Fees
Authors: Menon Krishnagopal , Williams David D. 
Published: April 2008

The audit fees literature contains little by way of systematic evidence on long-term trends in audit fees. This study analyzes trends in audit fees from 1980 through 1997, adjusting for changes in client size, complexity, and risk.
The sample is restricted to clients of Big 6 firms that voluntarily disclosed audit fees in the period 1980–1997. Evidence is found that audit fees increased in the 1980s but stayed flat in the 1990s. Most important, a significant increase is noted in 1988, the year in which the Auditing Standards Board issued the “expectation gap” standards. These results hold even after controlling for wage increases in accounting firms, suggesting an expansion of auditing effort. There is no evidence that auditors obtain any price premium from industry specialization. The 1989 Big 8 mergers appear to have had a short-term, but not long-term, effect on fees. Finally, the magnitude of the audit fee model coefficient for accounts receivable and inventory has declined over the period, presumably due to productivity improvements.
Additional Evidence on Audit Report Lag
Authors: Knechel W. Robert , Payne Jeff L. 
Published: April 2008

The process for providing accounting information to the public has not changed much in the last century even though the extent of disclosure has increased signifi-cantly. Sundem et al. (1996) suggest that the primary benefit of audited financial statements may not be decision usefulness but the discipline imposed by timely confirmation of previously available information. In general, the value of information from the audited financial statement will decline as the audit report lag (the time period between a company's fiscal year end and the date of the audit report) increases since competitively oriented users may obtain substitute sources of information. Furthermore, the literature on earnings quality and earnings management suggests that unexpected reporting delays may be associated with lower quality information.
The purpose of this paper is to extend our understanding about the determinants of audit report lag using a proprietary database containing 226 audit engagements from an international public accounting firm. We examine three previously uninvestigated audit firm factors that potentially influence audit report lag and are controllable by the auditor: (1) incremental audit effort (e.g., hours), (2) the resource allocation of audit team effort measured by rank (partner, manager, or staff), and (3) the provision of nonaudit services (MAS and tax). The results indicate that incremental audit effort, the presence of contentious tax issues, and the use of less experienced audit staff are positively correlated with audit report lag. Further, audit report lag is decreased by the potential synergistic relationship between MAS and audit services.
The Effects of Small Monetary Incentives on Response Quality and Rates in the Positive Confirmation of Account Receivable Balances (Retracted)
Authors: Engle Terry J. , Hunton James E. 
Published: April 2008

The AICPA has indicated that the use of small monetary incentives might be an effective technique for improving confirmation response rates. A significant body of accounting and nonaccounting research supports the AICPA's position; however, studies in marketing and public opinion polling suggest that the quality of survey-based responses can either increase or decrease with the use of monetary incentives. Existing auditing research has not looked at the potential effect of monetary incentives on response quality in the context of confirming account receivable balances. This study was designed to investigate this important issue.
In this field experiment, four large, independent newspaper organizations mailed a total of 7,200 trade accounts receivable confirmations. The experiment employed a three (no misstatement, understatement, and overstatement) by three (no incentive, quarter, and dollar) between-subjects, full-factorial design. Consistent with prior research, the use of monetary incentives improved response rates in all misstatement conditions and response quality was higher for overstated, when compared to understated, accounts. However, monetary incentives did not close the quality gap between overstated and understated accounts and, surprisingly, the use of incentives was associated with an overall decrease in response quality.
The Effectiveness of Increasing Sample Size to Mitigate the Influence of Population Characteristics in Haphazard Sampling
Authors: Hall Thomas W. , Herron Terri L. , Pierce Bethane Jo , Witt Terry J. 
Published: April 2008

Over 40 years ago both Deming (1954) and Arkin (1957) expressed concerns that the composition of samples chosen through haphazard selection may be unrepresentative due to the presence of unintended selection biases. To mitigate this problem some experts in the field of audit sampling recommend increasing sample sizes by up to 100 percent when utilizing haphazard selection. To examine the effectiveness of this recommendation 142 participants selected haphazard samples from two populations. The compositions of these samples were then analyzed to determine if certain population elements were overrepresented, and if the extent of overrepresentation declined as sample size increased.
Analyses disclosed that certain population elements were overrepresented in the samples. Also, increasing sample size produced no statistically significant change in the composition of samples from one population, while in the second population increasing the sample size produced a statistically significant but minor reduction in overrepresentation. These results suggest that individuals may be incapable of complying with audit guidelines that haphazard sample selections be made without regard to the observable physical features of population elements and cast doubt on the effectiveness of using larger sample sizes to mitigate the problem. Given these findings, standard-setting bodies should reconsider the conditions under which haphazard sampling is sanctioned as a reliable audit tool.
The Timing and Information Content of Auditors' Exhibit Letters Relating to Auditor Changes
Authors: Krishnan Jayanthi 
Published: April 2008

This study examines auditors' exhibit letters that are filed as part of reporting requirements for auditor changes. The two other reporting requirements (an initial 8-K filing by the client and the AICPA notification letter sent by the auditor) have been the subject of prior work (Schwartz and Soo 1996a; Ettredge et al. 2001). The auditor's exhibit letter, in which the auditor is required to comment on client disclosures in the initial 8-K, is intended to ensure accurate reporting by the client particularly on potentially troublesome conditions such as reportable events, disagreements, and resignations. I investigate the content, timeliness, and informativeness of the auditors' letters. The results indicate a low incidence of inconsistencies between the initial 8-K and the auditor's letter, and a low degree of noncompliance with the timing requirements suggesting that the auditor's exhibit letter contributes positively to the monitoring of corporate disclosures concerning auditor changes. Importantly, a relatively high proportion of inconsistencies between the initial 8-K and the auditor's letter are associated with reportable events and accounting disagreements. Delays in filings are associated with client size, auditor type, auditor resignations, and with the presence of inconsistencies between the initial 8-K and the auditor's letter.
Market tests indicate that the market response to the initial 8-K is negative for nonconcurrent filings (filings that do not contain the auditor's letter), but not for concurrent filings (filings that include the letter), suggesting that investors take an adverse view of the absence of the auditor's letter. Late letter filers and filers whose letters point out omissions or inadequacies in the disclosures made in the initial 8-K experience a significant negative reaction from the date of the initial 8-K filing to the date of the filing of the auditor's letter. This is consistent with the possible presence of information leakage prior to the actual filing of the auditor's letter, for example through analyst reports. However, despite this information leakage, late letter filings experience a significant negative reaction at the time of the letter filing. Filings involving inconsistencies between the auditor's letter and the initial 8-K also experience a negative, albeit weaker, reaction on the date of the letter filing. Thus, investors react negatively to the absence of the letter at the time of the initial 8-K filing, and negatively in the period following the initial 8-K filing to late letter filers and filers with inconsistencies. Overall, the results provide support that the auditor's exhibit letter has information content.
Auditors' Strategies to Protect Their Litigation Reputation: A Research Note
Authors: McCracken Susan A. 
Published: April 2008

Litigation may be harmful in terms of direct costs such as damages and defense costs, as well as indirect costs such as harming the auditor's general reputation and name. When a case is initiated, the auditor may choose to settle out of court or fight. Often settling is less costly in the short run, but may be costlier in the long run as the auditor develops a reputation for not fighting, thus, inducing greater future litigation. This study investigates whether reputational concerns for future litigation motivate auditors to strategically take costly actions to fight rather than settle.
I use an experiment involving 48 partners to examine auditors' actions in a situation where auditors report their litigation outcomes to future litigants, allowing them to develop reputations, and a situation where auditors do not report their litigation outcomes. As predicted, I find that auditors take costly actions to protect their litigation reputation. Auditors are more likely to predict that their side will win and have more difficulty settling, even if settling is less costly, when reputation can be protected as compared to when it cannot. In contrast, inexperienced auditors are not influenced by reputation concerns. Thus, litigation reputation concerns that influence auditors' decisions and actions appear to develop with an auditor's experience and tenure in the audit profession.
The Development and Transferability of Task Knowledge
Authors: Thibodeau Jay C. 
Published: April 2008

This study provides experimental evidence related to the management of audit task knowledge. Specifically, the research explores whether a certain type of task knowledge, loan credit review knowledge, develops differently for in-charge auditors working in different industry specializations. Since auditors are often asked to choose an industry specialization at the in-charge level, understanding whether certain industries provide the opportunity for differential knowledge development is important (Libby and Frederick 1990), especially if such knowledge can be transferred to aid performance in tasks completed in several other industries. As such, the study explores whether the task knowledge under investigation can be transferred across both industry and task contexts to aid performance in the going concern judgment, a task that is required to be completed in all industries.
An experiment was administered to 60 in-charge auditors from one of the then Big 6 firms, with 32 participants specializing in the financial services industry and 28 in manufacturing. Importantly, financial services auditors have extensive experience evaluating the collectibility of loans and the underlying financial condition of borrowers; this knowledge is expected to also be valuable in assessing the going concern of any client. Participants evaluated the going concern status of four cases of actual troubled clients from two industry settings: manufacturing and casino gambling. The findings support the transferability of knowledge across task and industry contexts. This result is important because it is the first study in the audit literature to demonstrate that a specific type of task knowledge can be transferred across both task and industry contexts (Be´dard and Chi 1993). In so doing, the results provide an important theoretical foundation for audit researchers and practitioners regarding the conditions for the transfer and dissemination of audit knowledge throughout a firm.
The Effectiveness of Expectation Models in Recognizing Error Patterns and Generating and Eliminating Hypotheses While Conducting Analytical Procedures
Authors: Leitch Robert A , Chen Yining 
Published: April 2008

This study analyzes the hypothesis generation and elimination capability of analytical procedures using Structural, Stepwise, Martingale, and ARIMA (Auto Regressive Integrated Moving Average) expectation models. We seed 14 errors into 36 complete sets of actual monthly financial statements from three companies. The bivariate pattern of differences, along with the structure of the accounting, business process, and economic system, are used to analytically determine (hypothesize) the most likely cause of the error. We then test the capability of these expectation models to generate correct hypotheses or to eliminate incorrect hypotheses. Positive and negative testing approaches, founded on multivariate normal theory, are examined.
From a hypothesis generation perspective using the positive testing approach, the results indicate that the Structural and Stepwise models, yield lower effectiveness risks (type II error) than the ARIMA and Martingale models, with the edge going to the Structural model. From a hypothesis elimination perspective using the negative approach, the results indicate that the Structural and Stepwise models yield lower efficiency risks (type I error) than the Martingale and ARIMA models, with the edge going to the Stepwise model. This study provides strong evidence to support the use of the structure of an organization's business processes (McCarthy 1982; Bell et al. 1997), its associated accounting system, and economic structure to build an expectation model. Moreover, the joint consideration of errors is found to be superior to the marginal approach advocated by Kinney (1987). The results presented here have the potential to assist auditors in directing audit efforts.
Professional Service Fees and Auditor Objectivity
Authors: Reynolds J. Kenneth , Deis Donald R. , Francis Jere R. 
Published: April 2008

This study investigates whether an auditor's objectivity is impaired by nonaudit services or by the level of economic dependence on a client. Like several contemporaneous studies, we use recent mandated proxy statement audit and nonaudit fee disclosures to measure economic dependence and we use discretionary accruals as a surrogate for auditor objectivity. The results in the extant literature are mixed. We provide some explanations for those inconsistent results.
First, we replicate the results of Frankel et al. (2002), finding, as they did, a significantly positive association between the relative level of nonaudit fees and discretionary accruals. Second, we document that this initial result is primarily due to small-tomedium-sized high-growth firms, especially firms having initial public offerings and in the e-commerce, biomedical, telecommunication, and pharmaceutical industries. After factoring these characteristics into the analysis, we find no evidence that the relative level of nonaudit service fees impairs an auditor's objectivity.
The Effects of Immediate Context on Auditors' Judgments of Loan Quality
Authors: O'Reilly Dennis M. , Leitch Robert A. , Wedell Douglas H. 
Published: April 2008

This study examines whether auditors, when making a series of similar, independent judgments are non-normatively influenced by their earlier judgments. Two judgment biases are considered: contrast effect and assimilation effect.
We conducted an experiment where experienced auditors classified a number of commercial loans based on collection risk. The auditors' judgments displayed a significant contrast effect, and range-frequency theory explains a significant portion of the variance in their judgments (Parducci 1965). The results suggest that auditors tended to use the range principle more than the frequency principle to classify loans. This bias has potential implications for audit practice. By comparing auditors to graduate accounting students we find evidence that task experience moderates the magnitude of the judgment bias.
An Analysis of Cross-Sectional Differences in Big and Non-Big Public Accounting Firms' Audit Programs
Authors: Blokdijk Hans , Drieenhuizen Fred , Simunic Dan A. , Stein Michael T. 
Published: April 2008

A significant body of prior research has shown that audits by the Big 5 (now Big 4) public accounting firms are quality differentiated relative to non-Big 5 audits. This result can be derived analytically by assuming that Big 5 and non-Big 5 firms face different loss functions for “audit failures” and is consistent with a variety of empirical evidence from studies of audit fees, auditor changes, and the stock price reaction to audited earnings. However, there is no existing evidence (of which we are aware) concerning the underlying production differences between Big 5 and non-Big 5 audits. As a result, existing empirical evidence cannot distinguish between the possibility that Big 5 audits are simply perceived to be different (e.g., by investors) or actually differ in how they are produced.
Our research objective is to identify the production characteristics of audit engagements that may explain the differences in expected audit quality between Big 5 and non-Big 5 firms. In this archival study, we examine the total audit effort and the allocation of effort to four audit phases—planning, (control) risk assessment, substantive testing, and completion—for a cross-section sample of 113 audits of Dutch companies in 1998/99 by 14 public accounting firms. We find that, after controlling for client characteristics: (1) both types of auditors exert about the same amount of total audit effort; (2) Big 5 auditors allocate relatively more effort to planning and (control) risk assessment, and relatively less to substantive testing and completion; and (3) client size, use of the business-risk-based audit approach, and reliance on client internal controls affect audit hours differently for the two auditor types. We conclude that the Big 5 firms actually produce a higher audit quality level, and that this quality difference is related to how audit hours are deployed in a more contextual and less procedural audit approach.