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In this contribution, we propose machine learning techniques to predict zombie firms. First, we derive the risk of failure by training and testing our algorithms on disclosed financial information and nonrandom missing values of 304,906 firms active in Italy from 2008 to 2017. We then identify the highest financial distress conditional on predictions that lie above a threshold for which a combination of the false positive rate (false prediction of firm failure) and the false negative rate (false prediction of active firms) is minimized. Therefore, we identify zombies as firms that remain in financial distress, i.e. whose forecasts fall into the risk category above the threshold for at least three consecutive years. To this end, we implement a gradient boosting algorithm (XGBoost) that exploits information about missing values. The inclusion of missing values in our prediction model is crucial because patterns of undisclosed accounts are correlated with firm failure. Finally, we show that our preferred machine learning algorithm outperforms (i) proxy models such as Z -scores and the distance-to-default, (ii) traditional econometric methods, and (iii) other widely used machine learning techniques. We provide evidence that zombies are less productive and smaller on average and that they tend to increase in times of crisis. Finally, we argue that our application can help financial institutions and public authorities design evidence-based policies—e.g. optimal bankruptcy laws and information disclosure policies. [ABSTRACT FROM AUTHOR]

The increasing complexity of 10-K reporting has caused difficulties for investors seeking to understand and analyze a company's financial reports. In this study, we examine whether the SEC's comment letter process, consistent with its mission to improve public company disclosure, reduces reporting complexity in subsequent filings. We find comment letter receipt has a competing impact on two distinct dimensions of reporting complexity. Specifically, reporting complexity related to accounting concepts decreases after comment letter receipt, but linguistic reporting complexity increases. Validating this competing impact, we find that both changes to complexity are associated with changes in firms' information asymmetry in the expected directions. Further analysis of the increase in linguistic reporting complexity suggests that managers obfuscate following comment letter receipt, where the increase is unnecessary and not occurring in response to changes in the firms' accounting or underlying economics/operations. Overall, results suggest that while the comment letter process simplifies the presentation of reported accounting information, it also has the unintended consequence of decreasing the readability of reports. This nuance is important to understand, given that the federal government dedicates significant resources to the comment letter process. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In this article, we bridge the gap between academia and practice by analyzing and presenting the results of allegations in more than 200 lawsuits against the largest public accounting firms. Our findings are critical as the lawsuits damage the firms' reputations, the credibility of the profession in general, and may result in large monetary losses and loss of clients. We find three key results not found in previous legal research. First, we find that Generally Accepted Accounting Principles (GAAP) issues, especially those focused on valuation, dominate Generally Accepted Auditing Standards (GAAS) issues in the allegations. Second, fraud allegations against the auditors themselves are a significant problem, although often ignored in the fraud literature. Third, the Public Company Accounting Oversight Board (PCAOB) reports on the accounting firms provide an unintended source of information for third parties in future legal allegations against those same firms. [ABSTRACT FROM AUTHOR]

This study investigates whether capital account liberalization, a leading characteristic of globalization, is associated with firms' future innovation output. Employing a novel firm-level panel data set covering 41 countries over two decades, we show that capital account liberalization is significantly associated with higher corporate patenting activities, particularly for firms from innovation-intensive industries. Further analyses show that the effect is stronger among firms from economies in a better legal environment, signifying the important role of good institutional quality in facilitating the positive impact of liberalization. The effect is also stronger among firms with higher initial productivity, consistent with the "productivity" hypothesis, according to which bigger and more productive firms generate more innovation after liberalization. Our findings are robust to the use of various measurements, subsamples, and estimation models. This study provides global firm-level evidence of the real economic impact of financial globalization. [ABSTRACT FROM AUTHOR]

We examine the impact of the Sarbanes–Oxley Act of 2002 (SOX) and the global economic crisis of 2008 on revenue generation patterns of public accounting and law firms. Using a sample of firm-year observations from both industries, we show that since the enactment of SOX, public accounting firms have significantly increased leveraging of partner time and decreased charge-out rates to boost their revenue per partner. While law firms also exhibit an increase in revenue per partner in the post-SOX era, their increase is rooted in higher average charge-out rates and lower leveraging. During the crisis, the public accounting industry was insulated by the relatively inelastic nature of its services. By contrast, law firms suffered a decline in demand for their services, which reduced their revenue generation by reducing their charge-out rates. We also consider cross-sectional variations within each industry and find significant differences across firms in the impact of SOX and the economic crisis. Notably, large firms in both industries were more significantly impacted by SOX and the Big 4 accounting firms were adversely impacted during the crisis. Our study sheds light on the revenue generation and human resource consequences of two significant macroeconomic events for two professional service industries that serve as watchdogs in our capital markets. [ABSTRACT FROM AUTHOR]

This study determines how firms' accounting decisions, particularly those regarding research and development (R&D) expenditures, were affected by China's 2017 accounting standards for government subsidies revision. This revision allows the R&D subsidies previously included in non-operating income to be included in other revenue sources. We use the 2014–2019 data on China's A-share listed firms to address this question. Based on regression analysis and propensity score matching difference-in-differences models, the results are as follows. First, before the revision, subsidised firms had higher capitalisation rates for R&D expenditures. Second, subsidised firms also cut their R&D expenditures, meaning the lower the capitalisation rates, the larger the reduction in R&D expenditures. Third, after the revision, subsidised firms lowered their capitalisation rates for R&D expenditures and increased R&D expenditures. Finally, the impact of the revision had a time lag, as it was more pronounced in the next year and greater for private enterprises and firms that received more subsidies. This study contributes to the literature on accounting standards and firm innovation by examining how firm accounting decisions respond to the quasi-natural experiment of revising accounting standards for government subsidies and its implications for firm innovation. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to investigate the determinants of anti-corruption disclosures by construction firms in Asia-Pacific countries. Design/methodology/approach: The sample comprises construction companies from seven Asia-Pacific countries from 2015 to 2019. The authors hand-collected data on anti-corruption disclosures by using content analysis. Findings: This study provides empirical evidence that government ownership, country-level accounting competence and high-quality auditors increase companies' anti-corruption disclosures. Meanwhile, this study finds that uncertainty avoidance does not affect companies' anti-corruption disclosures. Practical implications: This study has a number of implications. First, government and professional accountant organizations need to improve accountants' knowledge and competence through education, training and continuous professional development. Second, public accounting firms need to ensure the quality of their auditors, particularly in the technical competence in financial and nonfinancial reporting. Finally, universities must improve and update their curriculum regarding nonfinancial reporting issues. Originality/value: This study is among the first to examine anti-corruption disclosure practices in the most corrupted settings, i.e. the construction industry in Asia-Pacific countries. It uses the isomorphism perspective to explain the influence of government ownership, country-level accounting competence and high-quality auditors on anti-corruption disclosure transparency. The number of prior studies investigating this association is very limited. Moreover, disclosures of anti-corruption information are complex and sensitive; thus, coercive, normative and mimetic pressures are required to achieve higher transparency and sustainability. [ABSTRACT FROM AUTHOR]

This study examines the relationship between CEO compensation schemes and ESG greenwashing behavior in Chinese listed firms during the period 2013–2022. We find that a CEO's cash (equity) compensation has a significantly positive (negative) correlation with corporate ESG greenwashing behavior. From mechanism analysis, consistent with the agency problem view, firms engage in more severe ESG greenwashing behavior under a higher proportion of cash in the CEO compensation structure. Such distortion behavior is mitigated by higher internal control quality in firms having an equity incentive for their CEO under the convergence of interest viewpoint. Additional analysis reveals that corporates audited by large accounting firms and those with more media coverage exacerbate the positive correlation between CEO cash compensation and ESG greenwashing behavior, while government environmental regulations reinforce the inhibitory effect of CEO equity compensation on ESG greenwashing. Our results imply that different CEO compensation schemes can have opposite effects on limiting firms' ESG greenwashing behavior in the Chinese context. Furthermore, we highlight that the question of form over substance principle to certain external governance mechanisms, leading CEO to exacerbate impression management of ESG disclosure. [ABSTRACT FROM AUTHOR]

This study relies on the dual model of passion to explore the direct and conditional effect of passion on firm growth. The study proposed persistence and environmental uncertainty as pathways through which passion influences firm growth. The model of firm growth was tested on a sample of 381 small-scale businesses located in Nigeria. The findings suggested that passion is significantly related to firm growth and that persistence partially mediated the link between passion and firm growth. Furthermore, the study failed to establish the conditional effect of environmental uncertainty on the indirect effect of passion on firm growth. The study has established the applicability and relevance of the dual model of passion in the context of entrepreneurship confirming its predictive power in accounting for the variation in firm growth. JEL CLASSIFICATION: L260 [ABSTRACT FROM AUTHOR]

When upstream suppliers are VAT-exempted, overclaiming by fictional invoices becomes easier. This paper examines the effect of the presumed input VAT deduction reform on VAT evasion among VAT-exempted transactions in China. In the reform, firms are required to claim the presumed input refund of VAT based on downstream sales volume instead of on purchasing cost recorded on self-issued purchased invoices. We find that the reform reduced firms' VAT evasion since taxpayers have little incentive to use spurious invoices. Furthermore, the reform demonstrated more pronounced policy effects when taxpayers are low in tax-compliance and local economy contains a higher share of tax-noncompliant firms with poor accounting records. Results survive a battery of robustness checks as well as treatment effect heterogeneity. The presumed input VAT method would be a complementary tax enforcement tool to avoid VAT evasion in low tax capacity and high-informality settings under the context of credit-invoice VAT collection system. [ABSTRACT FROM AUTHOR]

ABSTRACT Many believe that the Big Four are simply global accounting firms with a large menu of additional services. Using both quantitative and qualitative data, we show that their role in the world political economy extends much beyond such description. We argue that the Big Four play a coordinating role in the organization and expansion of global value chain (GVC) in multiple territories, value‐chain segments and at multiple scales. Building on the literature of the multidimensionality of power in the GVC, we investigate the multiple dimensions through which the power of the Big Four is exercised. Uncovering the power manifestations of the Big Four as global actors, the article contributes both empirically and conceptually to the dialogue among the literatures on the international political economy, critical accounting and GVC. [ABSTRACT FROM AUTHOR]

Definition: Public company audits are not homogenous. Varying audit partner attributes, including gender, age, location, and expertise, play important roles in explaining audit outcome disparities. The extant literature underscores the influence of firm-level and office-level differences, in areas such as size, culture, and industry expertise, in shaping audit outcomes. Commonwealth countries, such as the U.K., Australia, New Zealand, and Continental European countries, along with Asian economic entities, mandate the disclosure of audit partner names. Consequently, significant research efforts have been devoted to investigating the impact of audit partner characteristics on audit outcomes in these jurisdictions. With the adoption of Public Company Accounting Oversight Board (PCAOB) Rule 3211, mandating disclosure of audit engagement partner details for U.S.-registered public accounting firms on Form AP, there has been a surge in U.S. firm research exploring the significance of audit partner characteristics on audit outcomes in recent years. This paper outlines research that considers audit partner attributes' influence on audit partner selection and audit quality across different economic entities. This entry contributes by synthesizing findings from recent research across diverse economic contexts, including the recently available insights from U.S.-based audits. The analysis of this entry not only provides insights into the current state of audit partner research but also delineates avenues for future research on this topic. [ABSTRACT FROM AUTHOR]

SUMMARY: Accounting firms have invested significant resources in diversity initiatives related to recruiting, retention, and promotion. Audit regulators suggest these efforts can have positive repercussions on audit quality. This article summarizes the key findings by Condie, Lisic, Seidel, Truelson, and Zimmerman (2023) (CLSTZ) regarding the influence of a more diverse group of audit partners within an audit office on office-level outcomes. Specifically, CLSTZ examines whether gender and ethnic diversity among audit partners within an office influences audit personnel retention and audit quality. CLSTZ finds that greater diversity (greater changes in diversity) among an office's audit partners is associated with less (reduced) turnover among the audit professionals in that office and higher (increased) audit quality. These findings provide empirical evidence regarding the influence of a more diverse group of office audit partners on office-level outcomes and have important implications for accounting firms. JEL Classifications: M41; M42. [ABSTRACT FROM AUTHOR]

Mergers and acquisitions (M&As) are an important way for non-Big 4 accounting firms to grow their businesses. Non-Big 4 firms also account for the vast majority of PCAOB inspections. Consistent with negative inspection reports signaling low quality at inspected firms, we find that non-Big 4 accounting firms conduct fewer M&A deals after they receive negative inspection reports. Additional analyses support our hypothesized signaling mechanism: (1) the chilling effect of inspection reports on M&A activity is stronger when the inspected firm's business is focused on public company audits, (2) the effect is stronger when stakeholders at the target firm know less about the acquirer because the acquirer is located in a different city, and (3) clients at the target firm switch to new firms rather than move over to the acquirer if the acquirer received a negative inspection report prior to the M&A date. [ABSTRACT FROM AUTHOR]

The misuse of law firm pooled client accounts has been identified as one of the primary areas of money laundering and terrorist financing risk for the legal profession. This article demonstrates the varied role that client accounts can play in money laundering, through both purposeful exploitation (by the predicate offender, the lawyer/law firm, or both) of the client account or of other legitimate business processes in which the client account inevitably plays a role, and/or a failure to fulfil regulatory requirements. It examines how the nature of law firm pooled client accounts in the UK creates and shapes an 'opportunity structure' for money laundering, and the occupational and organisational context of this opportunity structure. The article argues that examining the opportunity structures created by client accounts is a more useful approach than categorising them as inherently low, medium or high risk, as is seen in many national risk assessments and reports. Identifying the factors that create opportunities for money laundering through law firm client accounts can direct policymakers striving to prevent money laundering in the legal profession towards more targeted oversight mechanisms. [ABSTRACT FROM AUTHOR]

The study proposes methods for deterring earnings manipulation in Chinese commercial banks, recognizing it as an ongoing problem with the potential to destabilize investors and financial markets. The increasing integration of the global financial system has heightened the importance of addressing this issue, given the systemic risk posed by large individual financial institutions. Utilizing the Fuzzy Set Qualitative Comparative Analysis method (fsQCA) on 139 Chinese commercial banks in 2021, the paper explores factors influencing banks' earnings manipulation behavior. The study reveals several key findings: (1) Factors associated with reducing the likelihood of earnings manipulation in commercial banks are diverse and multifaceted. (2) Multiple paths exist to achieve earnings manipulation, categorized into Resource‐guided, Corporate Governance, Resource and Supervisory Mechanism, Supervisory Mechanism, and Corporate Governance as the main mechanism. Among these, the Supervisory Mechanism exhibits the highest consistency. (3) Hiring "Big Four" accounting firms as auditors emerges as a significant deterrent against earnings manipulation in commercial banks. (4) Banks with powerful major shareholders affiliated with the government or ample resources are effective in deterring earnings manipulation. These two factors are complementary, while a bank's growth prospects and industrial competition serve as substitute factors. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Small Business & Entrepreneurship is the property of Routledge and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Maloof & Associates (M&A), a well-regarded small auditing and accounting firm in Atlanta, kept a close eye on the media buzz surrounding ChatGPT. The partners knew that they must make decisions soon regarding the new technology, but they did not realize how soon until they lost a long-standing and substantial client to a rival that had moved aggressively and publicly to insert AI into their operations. Students, acting the role of consultants, must help M&A understand how ChatGPT and similar tools might be incorporated into the firm’s existing infrastructure, identify potential risks, and identify sources of potential costs and benefits of adopting artificial intelligence-based tools. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Currently, the growth of information technology is rapidly evolving alongside the journey of a business entity, as seen in public accounting firms facing demands to effectively utilize technology to enhance efficiency, productivity, and service quality. Identifying several challenges that may arise in the implementation of information technology strategies, including information security issues, investment costs, complex system integration, and organizational cultural challenges, public ac- counting firms are advised to pay attention to specific aspects in designing and implementing information technology strategies, such as selecting appropriate technology, employee training, and periodic performance evaluation, which are also necessary. Thus, by adopting the right information technology strategy, public accounting firms can improve their operational effectiveness, enhance client satisfaction, and strengthen their competitive position in the rapidly changing and competitive market. The IT Balanced Scorecard can serve as an effective framework in creating IT strategies because the distribution of strategies is evenly spread across all parts of the company, enabling the company to develop not only from a financial perspective but also from a non-financial one. The implementation of IT strategies is expected to help accounting firms achieve the goals, vision, and mission of the company and assist companies in implementing or planning IT strategies. [ABSTRACT FROM AUTHOR]

This paper examines whether heterogeneities in financial development among Vietnamese provinces matter for firm growth in Vietnam. Using a nationally representative firm survey that covers more than 41,000 firms for the period 2009 − 2013, we estimate the impact of provincial financial development on the growth rates of firms by accounting for sectoral differences in growth opportunities. We find that province-level financial development promotes the growth rates of sales, investment and sales per worker of small firms, and reduces the growth rate of the wage-to-sales ratio. Our results imply that firms grow faster in provinces with a higher level of financial development. Moreover, the effect of financial development on growth rates is larger when firms operate in sectors with better growth opportunities. [ABSTRACT FROM AUTHOR]

Because the PCAOB was unable to inspect audits of Chinese accounting firms until recently, regulators introduced legislation (HFCAA) potentially forcing Chinese companies to delist for non-compliance with PCAOB audit requirements. To understand the equity markets' response to this legislation, we analyze the short-term (event study) and long-term stock performance of U.S.-listed Chinese firms relative to the stock performance of other foreign companies. We find that Chinese companies outperform other Asian firms for the Pre-HFCAA Period, but they underperform other Asian firms from the time the HFCAA was introduced (28 March 2019) until an agreement was reached (26 August 2022). For the post-agreement period (26 August 2022 to 31 December 2022), the performance of Chinese and other Asian stocks is similar. Between 28 March 2019 and 31 December 2022, a typical shareholder lost 76% of wealth, and, compared to other Asian companies, the losses were around 87%. The findings highlight the importance of regulatory compliance and transparency in maintaining investor confidence and protecting shareholders' interests. [ABSTRACT FROM AUTHOR]

This paper focuses on firms in which insiders pledge their shares as collateral for loans. By investigating a natural experiment—China's enactment of provisions on share reductions that restrict pledge creditors' cashing-out behavior—we find that pledging firms exhibited more conservative financial reporting after the implementation than non-pledging firms. This effect was pronounced in firms with a higher ratio of pledged shares, a longer maturation period of the pledged shares, and more concentrated pledge creditors. Additionally, we show that pledging firms increased their accounting conservatism after the shock, leading to a lower risk of margin calls and stock price crashes. The effect on accounting conservatism was stronger in firms with controlling pledgers or when the pledge creditors were banks. Our results remained consistent after we performed several robustness tests. These behaviors are economically logical because the provisions heighten creditors' liquidity risk and the potential losses of loan default. Pledging shareholders embrace more accounting conservatism to mitigate creditors' concerns about agency costs and avoid triggering margin calls. Our findings provide direct support that creditors have a real demand for accounting conservatism and highlight the impact of shareholder-creditor conflicts on the financial reporting policies of pledging firms. [ABSTRACT FROM AUTHOR]

Copyright of Scientific Journal of King Faisal University, Humanities & Management Sciences is the property of Association of Arab Universities and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study examines the effects of presidential elections (PEs) on firms' accounting conservatism in Korea. The Korean president exerts great influence on the government's financial, monetary, subsidiary, and regulatory policies. At the same time, however, the Korean constitution prohibits the re‐election of the incumbent president. This simultaneously strong and fragile presidential system creates unique political uncertainty, which deteriorates the information gap between firms' insiders and outsiders. According to the efficient contracting channel, accounting conservatism is expected to relieve information asymmetry by recognizing the economic losses faster than economic gains. But we posit that the effectiveness of accounting conservatism depends on the information environment within which they operate. If the information environment facilitates a compensation system for an increase in accounting conservatism under high uncertainty, managers may prefer to expand conservative accounting practices. However, if there is no such incentive mechanism, managers may opt to suspend accounting conservatism because the cost of revealing bad news increases during periods of uncertainty. Test results show that PEs encourage managers to delay rather than expedite the timely recognition of economic losses. This negative effect becomes more pronounced in firms with higher reliance on government contracts than firms with lower such reliance. We also find that Korean chaebol‐affiliated firms are likely to increase accounting conservatism during PEs. In general, US‐based studies support the positive relationship between information asymmetry and accounting conservatism, while this study demonstrates that this relationship can be reverse depending on the institutional environment. [ABSTRACT FROM AUTHOR]

Purpose: The authors examine the determinants of ESG disclosure and differentiate between voluntary and mandatory disclosure regimes in Hong Kong. Design/methodology/approach: The authors analyse both Bloomberg ESG scores and a disclosure index score, manually constructed according to the 2019 Hong Kong Exchange ESG Guide using regression tests. Findings: The results indicate that the level of concentrated ownership is negatively associated with the quantity of ESG disclosure only in the voluntary disclosure period, suggesting that agency problems are alleviated when ESG reporting is mandatory. The findings also show that larger firms significantly disclose higher levels of ESG information in both voluntary and mandatory disclosure periods. Furthermore, the extent of ESG disclosure significantly increases when firms' sustainability reports are audited by Big 4 accounting firms only in the voluntary disclosure period. Finally, the control variables are significantly related to the level of ESG disclosure showing that ESG disclosure increased over time and is significantly different among industries. Originality: The authors make contributions to the literature on non-financial disclosure in relation to ESG reporting by examining the relationship between firm characteristics and ESG disclosure in the Hong Kong context under both voluntary and mandatory disclosure regimes. This study also provides important implications for other stock markets and relevant stakeholders including preparers, users and the sustainability profession. [ABSTRACT FROM AUTHOR]

Purpose: Using attribution theory, this study examined the effects of situational factors [time budget pressure (TBP), organisational ethical culture (OEC) and quality control procedures (QCPs)] and dispositional factors [auditor professional commitment (APC) and internal locus of control (ILOC)] on audit quality threatening behaviour (AQTB). In addition, it observed the moderating role of religiosity in the relationship between situational and dispositional factors and AQTB. Design/methodology/approach: A total of 189 external auditors responded to the survey questionnaire. This study employed structural equation modelling via SmartPLS to analyse the proposed model. Findings: The results documented that the OEC and QCPs situational factors were negatively related to the incidence of AQTB, whilst TBP was positively linked to the incidence of AQTB. Dispositional factors APC and ILOC were negatively connected to AQTB. Furthermore, the findings recorded the moderating effect of religiosity on most of the situational and dispositional factors related to AQTB. Practical implications: Regulators and accounting firms' efforts to promote high audit quality (AQ) may consider the theological/religious lens and reinforce ethical culture and quality control to reduce AQTB. Originality/value: The findings provide further insights into situational and dispositional factors that may cause or impede the incidence of AQTB in auditing practices, as well as the moderating role of religiosity in curbing AQTB. [ABSTRACT FROM AUTHOR]

Copyright of Revista Foco (Interdisciplinary Studies Journal) is the property of Revista Foco and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We consider the role of personalized pricing (PP) on product differentiation when PP is costly to implement. Using a stylized yet commonly used formulation, we find that when firms decide on positioning before deciding on PP implementation, PP implementation cost affects not only the amount of differentiation firms choose in their positioning, firm profits, consumer surplus, and social welfare, but also whether firms implement PP. When PP implementation cost is low, firms cannot help but to implement PP and engage in direct price competition. Moreover, firms implementing PP reduce their differentiation, further intensifying price competition, and are worse off. When PP implementation cost is moderate, firms position to reduce their differentiation to commit to not implementing PP, again aggravating price competition. In contrast, when PP implementation cost is higher, firms increase their differentiation due to the threat of PP but do not implement PP. As a result, the availability of PP improves firm profits, even though firms do not implement PP. However, if differentiation is restricted, then PP availability cannot improve firm profits. If an information seller sets the PP implementation cost, then it sets the cost low. Consequently, firms implement PP and are worse off. We also find that when firms decide whether to implement PP before deciding on positioning, they never implement PP. This is the case when PP implementation is complex, and differentiation can be affected by short-run advertising and promotion. Finally, we show that banning PP can benefit consumers when accounting for changes in firm positioning. This paper was accepted by D. J. Wu, information systems. Funding: This work was supported by the Social Sciences and Humanities Research Council of Canada and the Hong Kong Research Grants Council [Grant 21500920]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2021.02740. [ABSTRACT FROM AUTHOR]

This case explores the subjective nature of professional judgment related to audit risk through the lens of a fictitious company, Sparked Intuition Power (SIP). SIP has just been accepted as a new audit client by an international accounting firm. Students play the role of associates on the audit engagement team. As part of their work on the audit, the students identify potential risks present at SIP as part of the initial risk assessment process. Once these risks have been identified, the students decide how to assess the potential severity of each risk and determine the resulting effect on the overall auditor workload. Through interaction and discussion with their instructors, the students should be better able to navigate the decision-making process related to risk evaluation in an audit engagement. [ABSTRACT FROM AUTHOR]

The firm-level determinants of outward foreign direct investment (OFDI) intensity of Indian manufacturing firms are analyzed using a random-effects Tobit model for a panel dataset covering over 17,550 firms from 1992–1993 to 2018–2019. The explanatory variables are based on a theoretical synthesis of Dunning's (1980) [Towards an eclectic theory of international production: Some empirical tests. Journal of International Business Studies, 11(1), 9–31] ownership–location–internationalization (OLI) model and Mathew's (2002) [Competitive advantage of the latecomer firm: A resource-based account of industrial catch-up strategies. Asia Pacific Journal of Management, 19(4), 467–488] linkage–leverage–learning (LLL) model. The empirical evidence reveals that policy liberalization, size (up to a threshold level), age, business group ownership structure, and the extent of foreign earnings strongly impact the OFDI intensity of Indian manufacturing enterprises. In contrast, outsourcing intensity, technological efforts, product differentiation, export intensity, and use of imported intermediate inputs were found to have a moderate positive impact. A moderate negative impact was found for factors like the global financial crisis, debt-equity ratio, and technology imports, and a strong negative effect for foreign ownership and public-sector ownership structure variables. [ABSTRACT FROM AUTHOR]

SYNOPSIS: Partner aspirations (i.e., an employee's desire to make partner) benefit accounting firms by promoting succession planning and reducing unwanted employee turnover. Further, female partner aspirations are critical for firms striving to achieve gender equity at the partner level. Prior research has begun to examine partner aspirations (e.g., Jones and Iyer 2020); however, little is known about how partner and nonpartner attitudes and values differ regarding the benefits and sacrifices required of the partner track. We survey 224 public accounting professionals (101 partners and 123 nonpartners) to systematically compare partner and nonpartner attitudes and values. By identifying mismatches in perceptions between these two groups, our results direct firm leadership to specific issues most detrimental to partner aspirations. Our comparisons by gender provide further insight into specific issues that firms need to address to increase female partner aspirations. [ABSTRACT FROM AUTHOR]

SYNOPSIS: Accounting firms increasingly provide remote or hybrid work options to attract qualified professionals, but they must also effectively socialize new employees to develop and retain them. This study explores the effect of remote work on newcomer socialization. Rather than surveying remote newcomers who have less understanding of what "successful" socialization means, we ask 122 experienced Big 4 professionals about the impact of remote work during the COVID-19 pandemic on socialization. Respondents report that every aspect of socialization is impacted by remote work. Although participants perceive that newcomers are able to learn technical skills (e.g., how to complete work tasks) remotely, they are less able to learn about firm expectations (e.g., client interactions). Participants believe remote newcomers are less able to form bonds with coworkers and clients and are less committed to their firm. Best practices for remote socialization are discussed (e.g., virtual audit rooms) to assist accounting firms. [ABSTRACT FROM AUTHOR]