The effect of ambiguity on loss contingency reporting judgments

Article Abstract:

A study was conducted to investigate the effects of uncertainty about the probability that a future loss will take place on the judgments of auditors and users of financial statements about the correct reference to contingent losses in audit reports. The sample consisted of 92 auditors in a major accounting firm and 79 MBA students, who were presented with a general case information about a client and a lawsuit against the client. They were also provided with different cases describing more information about the lawsuit. The participants were asked to decide if the client needs reference to SAS No. 58. Findings revealed that, in terms of losses of low probability the action of auditors and users will be based on the assumption that an ambiguous probability of loss is higher than an accurate probability of the same intensity, indicating a conservative response to ambiguity.

Business reports, Financial statements, Ambiguity

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The effects of SOX internal control deficiencies and their remediation on accrual quality

Article Abstract:

A study was conducted to examine the effect of internal control deficiencies and their remediation on accrual quality. Findings show that firms that report internal control deficiencies have significantly larger positive and larger negative abnormal accruals. Results also show that firms that receive different internal control audit opinions in successive years show changes in accrual quality consistent with changes in internal control quality.

United States, Product standards, safety, & recalls, Science & research, Accrual Accounting, Standards, Accrual basis accounting, Report, Internal control (Accounting)

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Empirical accounting research design for Ph.D. students

Article Abstract:

Empirical research techniques and methods for designing research are discussed for first-year Ph.D. candidates in accounting, most of whom have limited backgrounds in empirical research. Error risks, sample sizes and types of errors that tend to appear in Ph.D. research papers are identified, and the relationship between Type I errors and Type II errors is examined.

Planning, Accounting, Study and teaching, Degrees, Academic, Academic degrees

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