Current Search: Accounting--Standards--United States (x)
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- Title
- The role of professional judgment in the application of United States accounting standards: An experimental study of the effect of professional judgment on financial reporting decisions of accountants.
- Creator
- Rentfro, Randall Wesley, Florida Atlantic University, Hooks, Karen L.
- Abstract/Description
-
This study examines two questions: (1) whether the level professional judgment required in the application of accounting standards affects the comparability of financial reporting; (2) whether financial statement preparers exploit the professional judgment in accounting standards in order to engage in earnings management. The study is motivated by former FASB Chair Dennis Beresford's call for simple accounting standards which rely heavily on the exercise of professional judgment and by SEC...
Show moreThis study examines two questions: (1) whether the level professional judgment required in the application of accounting standards affects the comparability of financial reporting; (2) whether financial statement preparers exploit the professional judgment in accounting standards in order to engage in earnings management. The study is motivated by former FASB Chair Dennis Beresford's call for simple accounting standards which rely heavily on the exercise of professional judgment and by SEC Chair Arthur Levitt's concerns that managers exploit the flexibility in accounting standards to engage in earnings management. Agency theory is used to develop two hypotheses which predict the conditions under which financial statement preparers exploit the professional judgment allowed in the application of accounting standards in order to manage earnings. Normative arguments are used to develop a third hypothesis about the relationship between the level of professional judgment required to apply accounting standards and the comparability of financial reporting. The study uses an experiment methodology to examine the financial reporting decisions of 111 financial statement preparers in corporations located throughout the United States. Participants are randomly assigned to one of four experimental groups (a control group, a profit-sharing plan group, an information asymmetry group, and a moral hazard group). The study's results support the hypothesis that there is less comparability in financial reporting when accounting standards rely heavily on the exercise of professional judgment than when standards place fewer demands on professional judgment. The findings also provide some support for the idea that moral hazard conditions interact with the level of professional judgment required in the application of accounting standards to affect the reporting decisions of financial statement preparers. However, the male financial statement preparers in this study reacted differently than their female counterparts when faced with moral hazard conditions.
Show less - Date Issued
- 2000
- PURL
- http://purl.flvc.org/fcla/dt/12653
- Subject Headings
- Accounting--Standards--United States, Accounting--Decision making
- Format
- Document (PDF)
- Title
- An analysis of the impact of non-audit services on financial reporting quality: A test of two competing theories of auditor independence.
- Creator
- Dickins, Denise., Florida Atlantic University, Skantz, Terrance R.
- Abstract/Description
-
Auditor independence has been a long-standing issue for regulators resulting in numerous studies on the subject on how to enhance it and numerous rules that attempt to ensure it (e.g. Cohen Report 1978; ASR 250 1978; SEC Rule 2-01 2000). One of regulators' most recent attempts to shore up auditor independence is evident in the provisions of the Sarbanes-Oxley Act of 2002 (SOX). As a test of two competing theories of auditor independence, and to determine whether SOX mandates have successfully...
Show moreAuditor independence has been a long-standing issue for regulators resulting in numerous studies on the subject on how to enhance it and numerous rules that attempt to ensure it (e.g. Cohen Report 1978; ASR 250 1978; SEC Rule 2-01 2000). One of regulators' most recent attempts to shore up auditor independence is evident in the provisions of the Sarbanes-Oxley Act of 2002 (SOX). As a test of two competing theories of auditor independence, and to determine whether SOX mandates have successfully enhanced financial reporting quality, I examine post-SOX changes in non-audit fees (as a proxy for changes in quasi-rents) and the extent of changes in two measures of financial reporting quality. Results suggest that SOX mandates have been effective, and that the proposition of DeAngelo (1981b) that non-audit services may impair auditor independence may more-closely describe the relationship between changes in quasi-rents and changes in financial reporting quality than does the theory of Lee and Gu (1998). Further, supplemental analyses suggest that, as proposed by the theories, the amount of low-balling is positively related to the amount of quasi-rents.
Show less - Date Issued
- 2006
- PURL
- http://purl.flvc.org/fcla/dt/12195
- Subject Headings
- Auditors--Evaluation, Accounting--Standards--United States, Auditing--Standards--United States, Auditing--Quality control, Disclosure in accounting
- Format
- Document (PDF)
- Title
- An investigation of the availability, distribution, and usability of the comprehensive annual financial reports of United States cities.
- Creator
- Hall, Douglas Roger, Jr., Florida Atlantic University, Washington, Charles W.
- Abstract/Description
-
Accountability is the cornerstone of democracy. Fiscal accountability is particularly important to an electorate. The system of fiscal accountability developed by the Governmental Accounting Standards Board is too complex and technical for the public, being beyond all but specially trained accountants and finance professionals. This dissertation investigates how the audited annual financial reports of U.S. cities are distributed and understood. The problem of governmental accounting...
Show moreAccountability is the cornerstone of democracy. Fiscal accountability is particularly important to an electorate. The system of fiscal accountability developed by the Governmental Accounting Standards Board is too complex and technical for the public, being beyond all but specially trained accountants and finance professionals. This dissertation investigates how the audited annual financial reports of U.S. cities are distributed and understood. The problem of governmental accounting complexity is treated as one of systemic nature due to the needs of a broad range of users and the wide range of uses for information contained in the audited annual financial reports. The study population is over 500 U.S. cities. The study methodology has three parts: a descriptive analysis of sample documents; a survey of finance directors requesting information about distribution of the reports, their perceptions on usability of the audited annual financial reports, and their opinions about the evolution of governmental accounting theory and practice. The third part of the study identified a cluster group sample of the general public who volunteered to complete a written survey and participate in a practical usability test with actual comprehensive annual financial report documents. The study concluded that there has been little or no marketing of the audited annual financial reports, actual distribution is exceedingly sparse, and that the general public has limited knowledge of the existence or availability of the document or the ability to make use of the comprehensive annual financial reports in their present form. Recommendations are made to release the audited annual reports in less time, free of charge, with wide distribution. The CAFR model needs to be simplified, organized better, and common language used. GASB, the Government Finance Officers Association, public administrators, and government finance professionals must accept the need to educate the public. Public administrators need to assert themselves when governmental accounting and financial reporting changes are contemplated.
Show less - Date Issued
- 2001
- PURL
- http://purl.flvc.org/fcla/dt/11969
- Subject Headings
- Financial Accounting Foundation --Governmental Accounting Standards Board, Municipal finance--United States--Accounting, Local finance--Accounting--Standards--United States, Cities and towns--United States
- Format
- Document (PDF)
