http://idea.library.drexel.edu/handle/1860/1756 http://idea.library.drexel.edu/retrieve/8362 http://idea.library.drexel.edu/handle/1860/1756 Search the Channel search http://idea.library.drexel.edu/simple-search http://idea.library.drexel.edu/handle/1860/2750 Title: The relation between national cultural dimensions and tax evasion <br/> <br/>Authors: Tsakumis, George T.; Curatola, Anthony P.; Porcano, Thomas M. <br/> <br/>Abstract: Although penalties and audits exist, tax evasion is a widespread phenomenon and continues to be a problem for many countries. National culture may contribute to a further understanding of intentional noncompliance across countries. In this study, we investigate the influence of national culture on tax compliance levels across 50 countries. Using Hofstede’s (1980) cultural framework as a basis for our hypotheses, we find that a noncompliant country’s profile is characterized by high uncertainty avoidance, low individualism, low masculinity, and high power distance. Our results have implications for both research and practice. This is the first study to employ Hofstede’s cultural framework as an explanator of international tax compliance diversity and serves as the starting point for the development of an international tax compliance framework. Tax policy implications also are addressed. http://idea.library.drexel.edu/handle/1860/2739 Title: An examination of auditor planning judgements in a complex accounting information system environment <br/> <br/>Authors: Brazel, Joseph F.; Agoglia, Christopher P. <br/> <br/>Abstract: This study investigates the effects of computer assurance specialist (CAS) competence and auditor accounting information system (AIS) expertise on auditor planning judgements in a complex AIS environment. Recent professional standards state that auditors need to change their audit strategies in reaction to the all-encompassing changes in their clients’ AIS (American Institute of Certified Public Accountants [AICPA] 2001, 2002). Information technology (IT) applications, such as enterprise resource planning (ERP) systems, are significantly changing the ways in which companies operate their businesses (e.g., business process reengineering) and auditors perform their duties (Helms 1999; Public Oversight Board [POB] 2000). For example, the implementation and utilization of ERP systems at many major corporations can increase audit-related risks such as business interruption, data base security, process interdependency, and overall control risk (Hunton, Wright, and Wright 2004). As technological developments continue, auditors must expand their AIS knowledge and skills in order to perform effective and efficient audits (POB 2000; Kinney 2001; AICPA 2002). Prior research suggests that expertise in the AIS domain may make auditors more cognizant of AIS-specific risks and provide them with the sophisticated audit skills required in such settings (Lilly 1997; Hunton et al. 2004). To our knowledge, our study is the first to examine whether auditors’ AIS expertise levels affect their risk assessments and subsequent testing decisions in a complex AIS setting. http://idea.library.drexel.edu/handle/1860/2640 Title: Do cross-border listing firms manage earnings or seize a window of opportunity? <br/> <br/>Authors: Ndubizu, Gordian A. <br/> <br/>Abstract: Firms raising new equity capital at cross-listing (IPO) and those crosslisting existing home-country public shares (non-IPO) benefit from earnings that are high when they cross-list on U.S. stock exchanges. IPO firms have greater benefits than non-IPO firms because they receive cash infusion at listing. I find that performance (ROA) and cash flows peak at cross-listing period for all cross-border firms. Using a matched-firm research design to control for industry and performance, the results suggest that both IPO and non-IPO firms time cross-listing when performance is peaking (seize a window of opportunity). Further tests investigate whether IPO and non-IPO firms differ in their incentives to engage in earnings management at the time of crosslisting. The results suggest that both appear to engage in the same level of earnings management at the time of cross-listing. This suggests that incentives to boost earnings to obtain higher cash infusion are not the main motivation for the earnings management observed. Other incentives, such as greater investor recognition could be a stronger motivation. http://idea.library.drexel.edu/handle/1860/2618 Title: The neuropsychology of borderline personality disorder: a meta-analysis and review <br/> <br/>Authors: Ruocco, Anthony C. <br/> <br/>Abstract: The neuropsychological profile of borderline personality disorder (BPD) is unclear. Past investigations have produced seemingly inconsistent results of precisely what neuropsychological deficits characterize the patient with BPD. A meta-analysis of 10 studies was conducted comparing BPD and healthy comparison groups on select neuropsychological measures comprising six domains of functioning: attention, cognitive flexibility, learning and memory, planning, speeded processing, and visuospatial abilities. BPD participants performed more poorly than controls across all neuropsychological domains, with mean effect sizes (Cohen’s d) ranging from -.29 for cognitive flexibility to -1.43 for planning. The results suggest that persons with BPD perform more poorly than healthy comparison groups in multiple neurocognitive domains and that these deficits may be more strongly lateralized to the right hemisphere. Although neuropsychological testing appears to be sensitive to the neurocognitive deficits of BPD, the clinical utility of these results is limited. Implications of these findings for future neurocognitive investigations of BPD are discussed. http://idea.library.drexel.edu/handle/1860/2614 Title: Dynamic correlation analysis of financial contagion: evidence from Asian markets <br/> <br/>Authors: Chiang, Thomas C.; Jeon, Bang Nam; Li, Huimin <br/> <br/>Abstract: We apply a dynamic conditional correlation model to nine Asian daily stock-return data from 1996 to 2003. The empirical evidence confirms a contagion effect. By analyzing the correlation-coefficient series, we identify two phases of the Asian crisis. The first shows an increase in correlation (contagion), and the second shows a continued high correlation (herding). Statistical analysis of the correlation coefficients shows shift in variance during the crisis period, casting doubt on the benefit of international portfolio diversification. Evidence shows that international sovereign credit-rating agencies play a significant role in shaping the structure of dynamic correlations in the Asian markets. http://idea.library.drexel.edu/handle/1860/1832 Title: An examination of auditor planning judgments in a complex accounting information system environment <br/> <br/>Authors: Brazel, Joseph F.; Agoglia, Christopher P. http://idea.library.drexel.edu/handle/1860/1831 Title: The effect of risk of misstatement and workload pressure on the choice of workpaper review format <br/> <br/>Authors: Agoglia, Christopher P.; Brazel, Joseph F.; Hatfield, Richard C.; Jackson, Scott B. <br/> <br/>Abstract: The advent of electronic communication and electronic workpapers at audit firms has provided workpaper reviewers with options of how to interact with their audit team. Concurrently, other review formats have developed that rely more on in-person communication (e.g., review-by-interview). Prior research indicates that in-person discussion during review results in qualitatively different workpapers and judgments than when the reviewer interacts with the workpaper preparer electronically. As reviewers typically have discretion over how to conduct their reviews, the choice of review format can be viewed as a controllable audit input. Thus, the reviewer’s choice of review format could impact the quality of the audit review team’s work. Our study extends the audit review process literature by examining reviewers’ choice of the form of their reviews and by considering factors that influence that choice. Specifically, we examine the effect of misstatement risk and workload pressure on this choice. We find that misstatement risk and workload pressure affect reviewers’ review mode choices, with both those facing low risk and those under high pressure more likely to perform their reviews electronically. Further, risk and workload pressure interact to affect reviewers’ likelihood of choosing to review electronically. Results indicate that misstatement risk moderates the effect of workload pressure such that, when risk is high, the effect of workload pressure is reduced. Our findings provide insight to firms and regulators regarding the impact of misstatement risk and workload pressure on how audit workpaper reviewers conduct their reviews. These issues are particularly relevant in light of recent changes in the regulatory environment that both emphasize the auditor’s role in detecting fraud/misstatements and exacerbate traditional workload pressures during busy times of the year. http://idea.library.drexel.edu/handle/1860/1830 Title: The effect of client characteristics on the negotiation tactics of auditors <br/> <br/>Authors: Hatfield, Richard C.; Agoglia, Christopher P.; Sanchez, Maria H. <br/> <br/>Abstract: Although the financial statements of an organization are considered a product of management, prior research suggests that a company’s financial statements may be affected by the negotiation strategy employed by the auditor when resolving audit differences with management. However, little subsequent research has discussed the potential strategies that auditors may employ during the negotiation process. Our study extends the literature by investigating, in a post-Sarbanes-Oxley environment, whether auditors will employ a reciprocitybased strategy for the resolution of audit differences and what client characteristics (client management’s negotiating style and client retention risk) will increase the extent to which it is utilized. Such a strategy involves bringing inconsequential items to management and subsequently waiving these items in an effort to encourage management to be more cooperative in the posting of significant income-decreasing adjustments. The results of our study indicate that client management’s negotiating style and retention risk have an interactive effect on auditors’ use of a reciprocity-based strategy. Specifically, auditors are more likely to utilize a reciprocitybased strategy when management’s negotiating style is competitive and client retention risk is high. Interestingly, the end result of the negotiation process is essentially identical (i.e., similar items are posted), regardless of client characteristics or the auditor’s utilization of a reciprocitybased strategy. Thus, it appears that use of a reciprocity-based strategy does not affect the quality of the financial statements, but simply facilitates the process of posting significant items. http://idea.library.drexel.edu/handle/1860/1829 Title: The effects of audit review format on the quality of workpaper documentation and reviewer judgments <br/> <br/>Authors: Agoglia, Christopher P.; Hatfield, Richard C.; Brazel, Joseph F. <br/> <br/>Abstract: The promulgation of standards (such as PCAOB Auditing Standard No. 3) highlights the recent focus on workpaper documentation quality and its influence on audit quality. Our study matches audit workpaper preparers with reviewers to examine how the choice of workpaper review method ultimately affects sequential audit review team judgments through its impact on preparer workpaper documentation. While reviewers maintain the option of reviewing workpapers on site (“face-to-face review”), they can now also perform their reviews electronically from remote locations (“electronic review”) due to technological advancements such as e-mail and electronic workpapers. Recent research has found that review mode can affect the judgments of auditors preparing the workpapers. Our study extends the literature by examining the extent to which review mode (electronic versus face-to-face) affects the quality of documentation in the workpapers and whether reviewers are able to discern and compensate for these documentation quality issues. We propose a model which predicts that the relationship between the method of review and reviewer judgment quality is mediated by a documentation quality assessment gap (i.e., actual versus reviewer assessments of documentation quality). Such a mediation model provides insight into why the review format affects reviewer judgment quality. We find that reviewers’ judgments are affected by the form of review expected by their preparer. As predicted by our mediation model, we find that the effect of review mode on reviewer judgments is mediated by a documentation quality assessment gap. Specifically, when the mode of review was electronic, reviewers were unable to recognize and compensate for the generally lower quality documentation, resulting in lower quality reviewer judgments compared to when the mode of review was face-to-face. These results suggest that the effect of review mode persists to the reviewer’s judgment through its influence on preparer workpaper documentation and the resulting documentation quality assessment gap. http://idea.library.drexel.edu/handle/1860/1828 Title: The effect of fraud assessment documentation structure on auditors’ ability to identify control weaknesses: The moderating role of reviewer experience <br/> <br/>Authors: Agoglia, Christopher P.; Beaudoin, Cathy; Tsakumis, George T. <br/> <br/>Abstract: The current regulatory environment, brought on by recent high-profile audit failures, expands the auditor’s role in detecting fraud. For example, auditors must now provide an opinion on clients’ internal controls, addressing their effectiveness at preventing or detecting fraud. While the structure of workpaper documentation has been shown to affect audit workpaper preparers’ assessments of overall fraud risk, prior research has not addressed the role their reviewers’ experience plays in mitigating documentation structure effects. Our study matches audit workpaper preparers with reviewers to investigate whether reviewer task-specific experience moderates the effect of fraud assessment documentation structure on the audit review team’s ability to identify the presence of significant control weaknesses. Consistent with expectations, we find that preparers who are required to document components of their fraud assessments provided more favorable (and lower quality) assessments of significant control weaknesses than those using either a supporting or balanced documentation structure. More importantly, results indicate that reviewer task-specific experience moderated the effect of documentation structure on reviewers’ identification of control weaknesses such that experienced reviewers compensated more for the effect of component documentation than reviewers with less experience. Our results suggest that experienced reviewers are better able to overcome challenges presented by documentation structure and more effectively assess the impact of control weaknesses than their less experienced counterparts. These results provide support for new regulations emphasizing the role of experience during the control assessment process.