Experienced auditors tend to structure their knowledge of financial statement errors with audit objective as the primary organizing dimension and transaction cycle as secondary. Yet, many audit asks are structured in the opposite manner, requiring auditors to assess whether objectives are met for each transaction cycle. Our paper reports the results of an experiment which indicates that this mi...

This study identifies the predictors of positive earnings surprises at varying levels of earnings surprises under strong and weak business conditions (2014 and 2010, respectively). It measures the impact on surprises of a unique and diverse set of predictors such as analyst coverage and industry type which are security characteristics and sales and cash flow that emanate from financial statemen...

This research examines how homeowners and renters were impacted by the financial crisis in 2009. We build from the hypothesis that homeownership provides people a sense of stability which decreases the extent to which they feel stressed as a result of financial hardship. Our study tests whether owning a home affected either the degree to which lower-income households experienced financial hards...

This study investigates the process of perpetration and concealment of management fraud in financial statements. First, we argue that fraud schemes consist of two components: “account schemes” and “evidence schemes.” Account schemes are the schemes through which management perpetrates fraud by manipulating account balances or disclosures. Evidence schemes are the schemes through which managemen...

We analyze how the financial conditions of the firm affect the compensation structure of workers, the size of the firm, and its dynamics. Firms that are financially constrained offer long-term wage contracts characterized by an increasing wage profile, that is, they pay lower wages today in exchange of higher future wages, effectively borrowing from their employees. Because constrained firms al...

The paper introduces a financial statement method to assess the future potential of a firm. First, the last strategic steady phase is identified. Second, growth rate for total expenditure is estimated (growth process). Third, the revenue generating potential of total expenditure is evaluated by a distributed lag function (revenue-generating process). This function is used to recalculate expense...

In this paper we investigate the effect of internationalization on home market performance using survey data and financial statement data of German insurance groups with property-liability business for the years 1999 through 2009. We develop a resource-based perspective and argue that strategic transformation is a major factor driving insurance groups’ internationalization, whereby successful i...

It is widely recognized that spreadsheets are error-filled, their creators are overconfident, and the process by which they are developed is chaotic. It is less wellunderstood that spreadsheet users generally lack the skills needed to derive practical insights from their models. Modeling for insight requires skills in establishing a base case, performing sensitivity analysis, using back-solving...

TECHNOLOGY has rendered accounting obsolete. Recognition and acceptance of this fact are necessary if accountants are to make meaningful change, rather than fritter away their limited resources trying to repair the creaking, sagging, old machine. Presumably, if accountants had been assigned the job of landing man on the moon, we would still be earthbound while they continued to tinker with an o...