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Title: The role of asset reliability and auditor quality in equity valuation.
Creator: Fallatah, Yaser., Florida Atlantic University, Higgs, Julia
Abstract/Description: This paper brings together the auditor quality, asset reliability and firm valuation literatures by examining the role of auditor quality in equity valuation. The study broadly follows the Richardson et al. (2005) categorization of the reliability of accounting accruals of balance sheet components and conjectures that the role of auditor quality in equity valuation is more pronounced when asset reliability is not high. Auditor quality is measured using reputation, industry specialist and...
Show moreThis paper brings together the auditor quality, asset reliability and firm valuation literatures by examining the role of auditor quality in equity valuation. The study broadly follows the Richardson et al. (2005) categorization of the reliability of accounting accruals of balance sheet components and conjectures that the role of auditor quality in equity valuation is more pronounced when asset reliability is not high. Auditor quality is measured using reputation, industry specialist and tenure metrics. The underlying assumption is that auditor quality enhances the market's perception of firm value; as such, auditor quality may mitigate the cost of security mispricing documented by Richardson et al. (2005) for low or medium reliability accruals. The results of the study provide some support that high quality auditors contribute to the valuation of equity for assets. It is less clear as to whether the value is more pronounced for low or medium reliability assets.
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Date Issued: 2006
PURL: http://purl.flvc.org/fcla/dt/12231
Subject Headings: Auditing--Quality control, Econometrics, Investment analysis
Format: Document (PDF)

Title: An Examination of Factors Impacting Managerial Behavior towards Compliance Controls: Impact of the EPA Audit Policy.
Creator: Davis, Phebian, Higgs, Julia, Florida Atlantic University, College of Business, School of Accounting
Abstract/Description: The United States established the Environmental Protection Agency (EPA) to monitor and enforce compliance with environmental pollution standards through various programs and policies. One such policy, the Audit Policy, allows companies to voluntarily self-report violations to the Agency in exchange for elimination of certain penalties. Despite the policy, firms still incur large environmental penalties, thus indicating the need for better understanding of the policy. A necessary but not...
Show moreThe United States established the Environmental Protection Agency (EPA) to monitor and enforce compliance with environmental pollution standards through various programs and policies. One such policy, the Audit Policy, allows companies to voluntarily self-report violations to the Agency in exchange for elimination of certain penalties. Despite the policy, firms still incur large environmental penalties, thus indicating the need for better understanding of the policy. A necessary but not sufficient condition for penalty relief under the Audit Policy requires discovery of violations by an environmental audit or a compliance management system. This research explores the option of discovery by a compliance management system and examines the motivation of managers to invest in an environmental management system (EMS). The theory of reasoned action (TRA) argues that attitude and subjective norms precede intentions. I use this theory to investigate what factors cause a manager to invest in an environmental management system (EMS). Additionally, I examine whether environmental attitude, tolerance for ambiguity and willful blindness are antecedents to attitude towards an EMS. In this study, I develop and test a scale of the willful blindness construct and measure its impact on managerial decision-making. The willful blindness construct development produced a one-item measure. My results support all hypotheses except for the predicted link between tolerance for ambiguity and attitude.
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Date Issued: 2017
PURL: http://purl.flvc.org/fau/fd/FA00005924
Subject Headings: Dissertations, Academic -- Florida Atlantic University, United States. Environmental Protection Agency--Auditing., Compliance., Environmental pollution.
Format: Document (PDF)

Title: Can Priming a Firm’s Organizational Identity Overcome the Influences of National Culture on Auditor Judgment?.
Creator: Killey, Michael, Higgs, Julia, Florida Atlantic University, College of Business, School of Accounting
Abstract/Description: A significant challenge faced by large auditing firms is offering consistent quality across the global network. Unfortunately, variation in judgments and decision-making, resulting from cultural differences, can undermine the provision of a uniform level of audit quality for these international firms. Previous research has determined that national culture influences an auditors’ professional judgments and decisions. Relying on Social Identity Theory, I explore whether inducing one’s...
Show moreA significant challenge faced by large auditing firms is offering consistent quality across the global network. Unfortunately, variation in judgments and decision-making, resulting from cultural differences, can undermine the provision of a uniform level of audit quality for these international firms. Previous research has determined that national culture influences an auditors’ professional judgments and decisions. Relying on Social Identity Theory, I explore whether inducing one’s organizational identification can both enhance auditor judgment and mitigate any deleterious impact that culture may have on the provision of a uniform level of audit quality. I also examine current cultural variations in auditor judgment in order to ensure that the results of earlier studies still typify the international auditing environment. National culture is assessed using two dimensions (individualism/collectivism, power distance) included in Hofstede’s 1980 cultural values framework. Participants from the United States are used to represent an individualistic/low power distance culture while individuals from India are used to represent a collectivistic/high power distance culture. Firms need mechanisms to elicit desired behaviors that may not be consistent with cultural tendencies in order to provide a uniform level of audit quality. Contrary to expectations, no significant differences are identified between the judgments of auditors from India and The United States. The results, however, do provide evidence that enhancing one’s organizational identification can impact certain professional judgments during the audit process. An association between national culture and auditor attitudes pertaining to client trust is also found. The implications of these findings for the professional auditing environment and future academic research are discussed.
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Date Issued: 2016
PURL: http://purl.flvc.org/fau/fd/FA00004736, http://purl.flvc.org/fau/fd/FA00004736
Subject Headings: Corporate governance., Corporations--Auditing., Auditing--Quality control., Identity (Psychology), Accounting--Moral and ethical aspects., Accounting--Professional ethics., Social responsibility of business.
Format: Document (PDF)

Title: Big 4 global networks: degree of homogeneity of audit quality among affiliates and relevance of PCAOB inspections.
Creator: Kassawat, Paulina M., Higgs, Julia, Florida Atlantic University, College of Business, School of Accounting
Abstract/Description: The Big 4 global networks (Deloitte, Ernst & Young [E&Y], KPMG, and PricewaterhouseCoopers [PwC]) market themselves as providers of worldwide seamless services and consistent audit quality through their members. Under the current environment in which these auditors operate, there are three types of global network members: inspected non-U.S. affiliates (inspected affiliates, hereafter), non-inspected non-U.S. affiliates (non-inspected affiliates, hereafter), and inspected U.S. offices (U.S....
Show moreThe Big 4 global networks (Deloitte, Ernst & Young [E&Y], KPMG, and PricewaterhouseCoopers [PwC]) market themselves as providers of worldwide seamless services and consistent audit quality through their members. Under the current environment in which these auditors operate, there are three types of global network members: inspected non-U.S. affiliates (inspected affiliates, hereafter), non-inspected non-U.S. affiliates (non-inspected affiliates, hereafter), and inspected U.S. offices (U.S. offices, hereafter). The recent suspension of the China-based Big 4 affiliates from auditing U.S.-listed companies calls into question whether these global networks can deliver the same level of audit quality across all their members and whether those located in jurisdictions denying access to the Public Company Accounting Oversight Board (PCAOB or Board, hereafter) to conduct inspections may benefit from such inspections. This study examines the effect of being an affiliate and the effect of PCAOB inspections on perceived audit quality. I use earnings response coefficients (ERCs) as a proxy for perceived audit quality.
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Date Issued: 2015
PURL: http://purl.flvc.org/fau/fd/FA00004385, http://purl.flvc.org/fau/fd/FA00004385
Subject Headings: Auditing standards -- United States, Business enterprises -- Computer networks, Corporate governance, Disclosure in accounting -- United States, Financial services industry -- Management, Government accountability, Intternational standard on auditing, Public Company Accounting Oversight Board
Format: Document (PDF)

Title: Cognitive Dissonance and Auditor Professional Skepticism.
Creator: Adikaram, Ruwan K, Higgs, Julia, Florida Atlantic University, College of Business, School of Accounting
Abstract/Description: I show that auditors experience cognitive dissonance when they fail to take appropriate professionally skeptical (hereafter PS) action in line with high PS judgment I specifically show that cognitive dissonance leads auditors to revise their attitudes on low ranking audit actions upward and lower their risk assessments, consequently, lower overall professional skepticism I also find that auditor cognitive dissonance leads to exaggerated ex-post auditor self-assessments professional skepticism...
Show moreI show that auditors experience cognitive dissonance when they fail to take appropriate professionally skeptical (hereafter PS) action in line with high PS judgment I specifically show that cognitive dissonance leads auditors to revise their attitudes on low ranking audit actions upward and lower their risk assessments, consequently, lower overall professional skepticism I also find that auditor cognitive dissonance leads to exaggerated ex-post auditor self-assessments professional skepticism Professional skepticism is fundamental to performing an audit according to auditing standards and critical to audit quality Extant research that investigates treatments to enhance professional skepticism predominantly treats both skeptical judgment and skeptical action as analogous outcomes of professional skepticism If, however, there is a breakdown between PS judgment and PS action, the overall benefits of these treatments will be trivial I show that cognitive dissonance due to the incongruence between PS judgments and PS actions leads to an unforeseeable corollary of lower overall professional skepticism I also demonstrate a specific mechanism of how auditor incentives lead to lower professional skepticism, hence, lower audit quality Both researchers and practitioners can benefit from this study by better understating the intricacies in the critical link between PS judgment and action Additionally, I provide an empirical investigation of the components in Nelson’s (2009) model of professional skepticism and extend the model to reflect the intricacies between PS judgment and PS action I test my hypotheses via a three-group research design with attitude change as a proxy measure of cognitive dissonance
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Date Issued: 2016
PURL: http://purl.flvc.org/fau/fd/FA00004772
Subject Headings: Cognitive dissonance, Auditing--Standards, Accounting--Standards, Accounting--Moral and ethical aspects, Accountants--Professional ethics, Auditors--Psychology, Behaviorism (Psychology)
Format: Document (PDF)

Title: Evaluating the Demand for Tax Professionals.
Creator: Rosenthal, Leigh, Higgs, Julia, Florida Atlantic University, College of Business, School of Accounting
Abstract/Description: Taxpayers who hire tax professionals to assist with tax matters have a choice as to which type of tax professional to hire. This study looks at the choice between hiring a tax accountant or a tax attorney. Stephenson (2010) identifies four constructs that explain a taxpayer’s motivation to hire a tax professional—legal compliance, time savings, money savings, and a protection from/avoidance of the Internal Revenue Service. A taxpayer may be motivated by one or more of these demand constructs....
Show moreTaxpayers who hire tax professionals to assist with tax matters have a choice as to which type of tax professional to hire. This study looks at the choice between hiring a tax accountant or a tax attorney. Stephenson (2010) identifies four constructs that explain a taxpayer’s motivation to hire a tax professional—legal compliance, time savings, money savings, and a protection from/avoidance of the Internal Revenue Service. A taxpayer may be motivated by one or more of these demand constructs. Further, the context of the advice—whether given in a planning or compliance setting—may influence the choice of a specific type of practitioner. Taxpayers also perceive certain professional features of the practitioner as being associated with either an accountant or an attorney. In a 2 x 1 between subjects research design, I investigate these issues by exploring how the perceived characteristics of the accounting and legal professions and the tax context differentially influence the demand for one of these professionals. I hypothesize that taxpayers who demand a tax professional because of legal compliance or time savings are more likely to hire an accountant. Taxpayers who demand the services of a tax professional because of money savings or a protection from/avoidance of the Internal Revenue Service are more likely to hire an attorney. Additionally, I hypothesize that taxpayers in a planning context are more likely to hire an attorney while taxpayers in a compliance setting are more likely to hire an accountant. In a hierarchal regression, the variable for accuracy was significant in a simple regression of the four Stephenson constructs. In a second tier of the regression, accuracy was again significant as were certain covariates. In the final tier of the regression, no independent variable was significant but certain covariates were significant including client advocacy which was highly significant. The results do demonstrate that taxpayers perceive professional differences between a tax accountant and a tax attorney. Many of the results and the rationales underlying the hypotheses seem to be in the right direction as far as showing the expected demand for a specific tax professional.
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Date Issued: 2016
PURL: http://purl.flvc.org/fau/fd/FA00004792, http://purl.flvc.org/fau/fd/FA00004792
Subject Headings: Tax return preparation industry., Finance--Law and legislation., Econometrics., Accounting--Moral and ethical aspects., Accountants--Professional ethics., Tax consultants--Professional ethics.
Format: Document (PDF)

Title: Do “Superstar” CEOs Impair Auditors’ Independence and Professional Skepticism?.
Creator: Harvin, Oscar, Higgs, Julia, Florida Atlantic University, College of Business, School of Accounting
Abstract/Description: The study examines the potential threat to an auditor’s independence in fact which may result from the extraordinarily favorable personal reputation (superstar status) of an audit client’s CEO This potential threat to an auditors’ independence is the result of a halo effect bias which can distort an individual’s judgment and behavior Accounting firms use a business risk audit approach which involves conducting a strategic risk assessment which assesses the overall threats to the business...
Show moreThe study examines the potential threat to an auditor’s independence in fact which may result from the extraordinarily favorable personal reputation (superstar status) of an audit client’s CEO This potential threat to an auditors’ independence is the result of a halo effect bias which can distort an individual’s judgment and behavior Accounting firms use a business risk audit approach which involves conducting a strategic risk assessment which assesses the overall threats to the business model of an audit client Prior research has demonstrated that the strategic risk assessment can bias the judgment of auditors pertaining to financial account level risk assessments For example, the Bernie Madoff Ponzi scheme demonstrated how an extraordinarily well respected individual with superstar status can distort the judgment of knowledgeable and normally skeptical individuals An experiment was conducted to examine the potential threat of a superstar CEO on an auditor’s independence as demonstrated by the ability to distort the judgment of the auditor during the performance of the strategic risk assessment In addition, the experiment was designed to examine whether the halo cognitive bias can lessen the impact that an auditor’s professional skepticism has on his or her judgment and behavior during the audit of a client’s financial statement Unlike other studies which have sought only to demonstrate that a cognitive bias exist which impairs auditor judgment; the study also examined whether the influence of a halo effect bias can be mitigated by the formal rating of audit evidence in a similar manner that was used by Embu and Finley (1977) to successfully mitigate a framing effect The experiment did not support the main hypothesis of the study that auditors assess the strategic risk at a lower risk level for firms that employ a superstar CEO than for those whom employ a non-superstar CEO This result may primarily be due to the inability of the scenario used in the experiment to sufficiently differentiate the characteristics of the superstar and non-superstar CEO Without establishing that the participants’ judgment was being distorted by a superstar CEO; the other hypotheses which involved testing a debiasing method to mitigate the halo effect caused by a superstar CEO and investigating whether a halo effect reduces the impact that auditors’ trait skepticism level has on their judgment could not be properly tested
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Date Issued: 2016
PURL: http://purl.flvc.org/fau/fd/FA00004771
Subject Headings: Chief executive officers--Professional ethics, Accounting--Moral and ethical aspects, Accountants--Professional ethics, Auditors--Psychology, Behaviorism (Psychology), Industrial management
Format: Document (PDF)

Title: The influence of professional identity and outcome knowledge on professional judgment.
Creator: Johnson, Anna J., Higgs, Julia, Florida Atlantic University, College of Business, School of Accounting
Abstract/Description: In response to the release of one of its Public Company Accounting Oversight Board (PCAOB or Board) inspection reports, Deloitte notes that “[p]rofessional judgments of reasonable and highly competent people may differ as to the nature and extent of necessary auditing procedures, conclusions reached and required documentation” (PCAOB, 2008, 30). Other responses to PCAOB findings echo this sentiment. Stakeholders need to understand causes of differences between experts’ professional judgments...
Show moreIn response to the release of one of its Public Company Accounting Oversight Board (PCAOB or Board) inspection reports, Deloitte notes that “[p]rofessional judgments of reasonable and highly competent people may differ as to the nature and extent of necessary auditing procedures, conclusions reached and required documentation” (PCAOB, 2008, 30). Other responses to PCAOB findings echo this sentiment. Stakeholders need to understand causes of differences between experts’ professional judgments to effectively utilize PCAOB inspection findings and firms’ responses to those findings. This study uses Social Identity Theory to explore whether role identity as an audit partner, internal reviewer, or PCAOB inspector, influences an expert’s judgments in an ambiguous decision environment. I find that professional judgments do not differ based on professional identity. This study also examines whether the presence or absence of outcome knowledge explains judgment differences among auditing experts. Consistent with prior research, e.g. Peecher & Piercey, 2008, outcome knowledge does affect experts’ professional judgment. I also find that experts’ level of organizational identification and membership esteem impacts professional judgment.
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Date Issued: 2014
PURL: http://purl.flvc.org/fau/fd/FA00004126, http://purl.flvc.org/fau/fd/FA00004126
Subject Headings: Accountants -- Professional ethics, Accounting -- Decision making, Auditing -- Decision making, Business ethics, Judgment, Managerial accounting
Format: Document (PDF)

Title: Maturity of IT risk management practices and reporting structure: an it manager perspective.
Creator: Vincent, Surani, Higgs, Julia, Florida Atlantic University, College of Business, School of Accounting
Abstract/Description: In December 2009, the Securities Exchange Commission (SEC) approved enhanced proxy disclosure rules requiring companies to disclose the board’s leadership structure and the board’s role in risk oversight. Apart from general business risks, boards are increasingly interested in Information Technology (IT) risks as it affects all aspects of the organization (PricewaterhouseCoopers [PwC], 2013). Since the effectiveness of IT risk management depends on senior managers’ actions, this dissertation...
Show moreIn December 2009, the Securities Exchange Commission (SEC) approved enhanced proxy disclosure rules requiring companies to disclose the board’s leadership structure and the board’s role in risk oversight. Apart from general business risks, boards are increasingly interested in Information Technology (IT) risks as it affects all aspects of the organization (PricewaterhouseCoopers [PwC], 2013). Since the effectiveness of IT risk management depends on senior managers’ actions, this dissertation attempts to answer the question of whether the maturity of IT risk management practices (the extent to which management performs particular activities to identify, assess, monitor and respond to IT-related risks) in organizations depends on the Chief Information Office (CIO) reporting structure and the board’s leadership structure.
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Date Issued: 2014
PURL: http://purl.flvc.org/fau/fd/FA00004336, http://purl.flvc.org/fau/fd/FA00004336
Subject Headings: Corporate governance, Decision making, Information technology -- Management, Information technology -- Social aspects, Management information systems, Risk management, Strategic planning
Format: Document (PDF)

Accountants--Professional ethics (2)	+ -
Accounting--Moral and ethical aspects (2)	+ -
Accounting--Moral and ethical aspects. (2)	+ -
Auditors--Psychology (2)	+ -
Behaviorism (Psychology) (2)	+ -

Corporate governance (2)	+ -
Accountants -- Professional ethics (1)	+ -
Accountants--Professional ethics. (1)	+ -
Accounting -- Decision making (1)	+ -
Accounting--Professional ethics. (1)	+ -
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Auditing -- Decision making (1)	+ -
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Auditing--Quality control (1)	+ -
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Florida Atlantic University (9)	+ -
Higgs, Julia (9)	+ -
College of Business (8)	+ -
School of Accounting (8)	+ -
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