I examine whether financial reporting quality and credibility affect firm financing and investment decisions. I use PCAOB inspections of non-U.S. auditors as exogenous shocks to the reporting quality of non-U.S. firms audited by PCAOB inspected auditors. I then use the subsequent public revelation of the inspection as exogenous shocks to the reporting credibility of non-U.S. firms that employ P...

A new political season is upon us, and surely it will provide plenty of new examples for me to use during my first week of class. For more than two decades, I have spent at least the first week of my introductory biology course discussing human population growth, its underlying causes, and its environmental ramifications. I always begin with the website www.census.gov/main/www/popclock.html (al...

The study introduces a new measure of adaption versus innovation problem solving style (labelled the AI-W) that is validated using professional accountants. The AI-W consists of nine items and nonproprietary in comparison to the Kirton Adaption-Innovation Inventory (KAI) of 32 items which is proprietary. An analysis of data from a large sample of practicing accountants suggests that reliability...

The work presented here investigates the process by which one group of individuals solves the problem of detecting deceptions created by other agents. A field experiment was conducted in which twenty-four auditors (partners in international public accounting firms) were asked to review four cases describing real companies that, unknown to the auditors, had perpetrated financial frauds. While ma...

For decades, spreadsheets have been one of the most commonly used computer applications by auditors. However, the use of spreadsheets varies considerably from one firm to another. Successful spreadsheet implementation can be viewed as occurring when spreadsheets are diffused to all auditors within an organization and are used to the fullest potential. This study aims to identify factors that co...

This research examines the association between external auditors’ position in their firm (rank) and their consideration of fraud risk factors when planning an audit. Included in this examination is a study of the relationship between rank and judgmental agreement among auditors concerning the effects of risk factors on the extent of substantive testing. Results reveal that, when planning the ex...

This study examines the differences between strategic systems audit approach compared with traditional based audit approach and its impact on development of auditors’ knowledge of the client’s business, has been discussed. Strategic systems audit approach advocates argue that this approach creates a better development of auditors’ knowledge of the client’s business than the traditional-based au...