Search

California’s passage of the Nonprofit Integrity Act in 2004, followed by the enactment of similar legislation in other American states, has resulted in a series of new financial reporting requirements for many larger nonprofit organizations. Chief among the provisions of several of these legislative pieces is the requirement for nonprofit entities to form separate audit committees. Following the lead established in the for-profit sector, advocates have strongly urged nonprofit organizations to include at least one financial expert among audit committee members to augment actual and perceived financial reporting integrity. However, advocates’ acknowledgement of the challenge of recruiting these individuals leads one to question their ultimate worth to nonprofit organizations. Recognizing the significance of this issue, this study investigates individual donors’ impressions regarding the inclusion of financial experts among nonprofit audit committee members. Using an experimental case as the basis for exploration, the study finds that donors generally do not perceive financial experts as enhancing the credibility of nonprofit organizations’ financial statements. In light of the significance of individual donor contributions to entities’ continued financial sustainability, these findings represent potentially important considerations for nonprofit organizations as they weigh the costs and benefits of enlisting busy financial professionals for audit committee service.

PurposeExperts contend that knowledge of the personal labor market penalties (loss of employment and future wealth) incurred by past chief executive officers (CEOs) forced to restate their firms' earnings may induce current CEOs to refrain from fraudulent disclosures. Because of the increased incidence of earnings restatements and the importance of augmenting investor trust, this paper aims to examine empirically nonprofessional investors' impressions of managerial earnings restatement penalties as fraud deterrents.Design/methodology/approachThe restatement penalties were explored in an experimental setting with nonprofessional investors as subjects. Using an experimental case as a basis, the study compared subjects' predictions of the probability that a CEO would fraudulently report a particular transaction under two general conditions: the absence of a specific fraud deterrent; and the presence of two potential deterrents, earnings restatement penalties and CEO financial statement certifications.FindingsStatistical analyses revealed that investors viewed the earnings restatement penalties as fraud deterrents, providing a level of protection comparable to that offered by financial statement certifications, a mandated practice originally intended to deter fraud. These results suggest that investors' awareness of past restatement penalties could help to enhance the credibility of currently reported earnings.Originality/valueThe investigation of this topic makes two contributions to existing research. First, it provides empirical evidence concerning a potential fraud deterrent (earnings restatement penalties) previously unexamined in prior studies. Second, it represents a new area of inquiry in earnings restatement research, both in topic (the perceived deterrence qualities of restatement penalties) and in method (empirical research vs traditional archival studies).

Primary osteogenic sarcoma of the bladder is an extremely rare disease. Fewer than 30 cases of tumors of the bladder containing bone or cartilage have been reported. Only 14 cases of well-documented primary osteogenic sarcoma of the bladder appear in the world's literature. The authors describe the first detailed description of such a patient treated with radiotherapy and chemotherapy as well as provide a review of this rare and interesting entity.