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  • Jennifer M Mueller-Phillips
    The Relative Importance of Firm Incentives versus Country...
    research summary posted July 30, 2015 by Jennifer M Mueller-Phillips, tagged 15.0 International Matters 
    Title:
    The Relative Importance of Firm Incentives versus Country Factors in the Demand for Assurance Services by Private Entities.
    Practical Implications:

    Firm incentives for audits and reviews are relatively more important than country factors in weak countries than in strong countries, which is consistent with the idea that voluntary assurance services can substitute for the weaknesses in a country’s institutional environment. The study contributes to understanding the private demand for assurance services by analyzing the joint role of firm specific incentives and country-level institutional factors for a broad sample of countries. Importantly, a cross-country framework is essential to study the role of both firm incentives and country factors on the voluntary assurance decision.

    Citation:

     Francis, J. R., Khurana, I. K., Martin, X., & Pereira, R. 2011. The Relative Importance of Firm Incentives versus Country Factors in the Demand for Assurance Services by Private Entities. Contemporary Accounting Research 28 (2): 487-516.

  • Jennifer M Mueller-Phillips
    The Role of Corporate Social Responsibility (CSR)...
    research summary posted July 27, 2015 by Jennifer M Mueller-Phillips, tagged 14.0 Corporate Matters, 15.0 International Matters, 15.05 Sustainability Services 
    Title:
    The Role of Corporate Social Responsibility (CSR) Assurance in Investors' Judgments When Managerial Pay is Explicitly Tied to CSR Performance.
    Practical Implications:

    This study provides support for the expansion of CSR assurance services, the disclosures of benchmarked CSR investment levels, and the potential investor assessments of such information when integrated with governance information. If investors concerned about “greenwashing” in the presence of pay-for-CSR-performance can reasonably rely upon these CSR disclosure factors, they may become less skeptical about using this type of nonfinancial information in their investment decisions. This in turn may lead firms to attract and retain those managers who are willing to substantively invest in CSR activities, signal the firm’s CSR commitment level, and ultimately add to the firm’s long-term value.

    Citation:

    Brown-Liburd, H., & Zamora, V. L. 2015. The Role of Corporate Social Responsibility (CSR) Assurance in Investors' Judgments When Managerial Pay is Explicitly Tied to CSR Performance. Auditing: A Journal of Practice & Theory 34 (1): 75-96.

  • Jennifer M Mueller-Phillips
    Transplanting Anglo-American Accounting Oversight Boards to...
    research summary posted July 23, 2015 by Jennifer M Mueller-Phillips, tagged 13.0 Governance, 13.05 Board/Audit Committee Oversight, 15.0 International Matters 
    Title:
    Transplanting Anglo-American Accounting Oversight Boards to a Diverse Institutional Context.
    Practical Implications:

    This study is of relevance to several other countries that exhibit, albeit to varying degrees, a tradition of party patronage, clientelism, institutional weaknesses and state ineffectiveness. The findings have implications for various actors and stakeholders in financial reporting. For example, global regulators should realize that independence from the profession, while simultaneously ignoring local institutional impediments, by no means guarantees the operation of effective national OBs across the globe. Furthermore, in the absence of effective oversight, particularly amid a severe financial crisis, there is a real risk that the quality of auditing will fall and audit fees will plunge, conditions that may bring about a major legitimation crisis for the profession.

    Citation:

    Caramanis, C., Dedoulis, E., & Leventis, S. 2015. Transplanting Anglo-American accounting oversight boards to a diverse institutional context. Accounting, Organizations & Society (42):12-31.

  • Jennifer M Mueller-Phillips
    U.S.-Listed Foreign Companies' Choice of a U.S.-Based...
    research summary posted September 21, 2015 by Jennifer M Mueller-Phillips, tagged 02.0 Client Acceptance and Continuance, 02.01 Audit Fee Decisions, 15.0 International Matters 
    Title:
    U.S.-Listed Foreign Companies' Choice of a U.S.-Based versus Home Country-Based Big N Principal Auditor and the Effect on Audit Fees and Earnings Quality.
    Practical Implications:

    This study offers insights into the value of a U.S.-based Big N audit in a U.S.-crosslisting context and suggests that the higher fees associated with a U.S.-based (vis-a` -vis home country-based) Big N principal auditor are not just price protection; i.e., U.S.-based Big N principal auditors are not simply shifting the expected cost of the additional litigation exposure to the foreign client. Rather, they are also improving the financial reporting environment by providing the U.S.-listed foreign client higher-quality audited earnings. U.S.-listed foreign companies and U.S. investors may be interested in the finding that U.S.-based (relative to home country-based) Big N principal auditors are associated with higher fees as well as higher earnings quality for these companies.

    Citation:

    Asthana, S. C., K. K. Raman, and H. Xu. 2015. U.S.-Listed Foreign Companies' Choice of a U.S.-Based versus Home Country-Based Big N Principal Auditor and the Effect on Audit Fees and Earnings Quality. Accounting Horizons 29 (3): 631-666.

  • Jennifer M Mueller-Phillips
    Understanding and Contributing to the Enigma of Corporate...
    research summary posted July 27, 2015 by Jennifer M Mueller-Phillips, tagged 15.0 International Matters, 15.05 Sustainability Services 
    Title:
    Understanding and Contributing to the Enigma of Corporate Social Responsibility (CSR) Assurance in the United States.
    Practical Implications:

    The results indicate that many companies that currently issue unassured CSR reports could economically benefit from obtaining CSRA through a reduction in their cost-of-capital and also benefit from reductions in analyst forecast errors and dispersion. As such, CSRA providers, especially accounting firms, need to improve their communication to convey these benefits to prospective clients. The capital markets appear to discount and not value CSRA when it is likely being used for impression management/greenwashing. Thus, the more important public policy issue is how to curb instances of CSRA being used for impression management/greenwashing purposes. For example, public policy makers may want to consider the merits of regulating CSRA providers where there are severe consequences for not identifying inaccurate, incomplete, or misleading CSR reporting.

    Citation:

    Casey, R. J., & Grenier, J. H. 2015. Understanding and Contributing to the Enigma of Corporate Social Responsibility (CSR) Assurance in the United States. Auditing: A Journal of Practice & Theory 34 (1): 97-130.

  • Jennifer M Mueller-Phillips
    Voluntary Audits and the Cost of Debt Capital for Privately...
    research summary posted July 29, 2015 by Jennifer M Mueller-Phillips, tagged 12.0 Accountants’ Reports and Reporting, 15.0 International Matters 
    Title:
    Voluntary Audits and the Cost of Debt Capital for Privately Held Firms: Korean Evidence.
    Practical Implications:

    Initial audits, changing audit status of a private company from no audit to either voluntary or mandatory audit, lead to a significant reduction in the interest rate on debt. The results show that an external audit is of informational value in the pricing of private debt such as bank loans, presumably. It enhances the credibility of audited financial statements, and thus helps banks and other private lenders overcome information problems related to borrower credit quality.

    Citation:

    Kim, J., Simunic, D. A., Stein, M. T., & Yi, C. H. 2011. Voluntary Audits and the Cost of Debt Capital for Privately Held Firms: Korean Evidence. Contemporary Accounting Research 28 (2): 585-615.

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