An empirical study of audit committee support for auditors involved in technical disputes with client management

Article Abstract:

Critics suggest that audit committees frequently do not relieve management pressure on auditors when there are disputes during audits. Factors are investigated here that may alter the chance that audit committees will support auditors rather than management in the case of audit disputes. A repeated measures experiment was run which involved 179 audit committee members as subjects. Variance analysis reveals that audit committee member background may also be predictive of willingness to stand behind auditors involved in client management disputes. Two contextual variables appear to be important: the relative condition of the audited company, and whether or not relevant professional standards are objective.

Management, Auditing, Reconciliation, Quarreling, Audit committees

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Selection of short-term accounting-based bonus plans

Article Abstract:

Two hypotheses are tested to determine why firms select different accounting measures of performance when devising executive compensation plans. The two measures of performance analyzed are accounting profits before income taxes and accounting profits after income taxes. Research results indicate that there is a weak suggestion that firms which are multinational are more likely to have bonus plans that reward managers based on after-tax profits. Results also suggest that capital-intensive firms are more likely to use bonus plans that reward managers based on after-tax profits.

Planning, Compensation management, Corporations, Incentives (Business)

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Lobbying activities and insider trading

Article Abstract:

Tests to determine if trading by insiders that lobby the Financial Accounting Standards Board (FASB) is consistent with their lobbying position (and significantly different from the trading of insiders that do not lobby) indicate that 'full cost' firms that lobbied were net sellers and 'successful efforts' insiders who lobbied were net buyers. Non-lobbyists took opposite positions. These results tend to support the hypothesis that lobbying with the FASB represents wealth maximization efforts. 10

United States, Economic aspects, Securities industry, Lobbying

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