Auditing Section Research Summaries Space

A Database of Auditing Research - Building Bridges with Practice

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  • Jennifer M Mueller-Phillips
    The Impact of Audit Completeness and Quality on Earnings...
    research summary posted March 31, 2016 by Jennifer M Mueller-Phillips, tagged 01.0 Standard Setting, 01.06 Impact of PCAOB, 14.0 Corporate Matters, 14.08 Press Release Language and Signaling 
    Title:
    The Impact of Audit Completeness and Quality on Earnings Announcement GAAP Disclosures.
    Practical Implications:

    The results of this study are important for regulators when considering the potential impact of the timeliness of audits and the subsequent impact on capital markets. The focus of the PCAOB is to improve the quality of public company audits and to ensure higher quality financial reporting for all stakeholders. However, higher quality audits may come at the cost of less timely financial information. This study indicates that this in turn can influence firm voluntary disclosure behavior. Consequently, this result could have potentially negative consequences for investors seeking the timeliest information possible.

    Citation:

    Schroeder, J. H. 2016. The Impact of Audit Completeness and Quality on Earnings Announcement GAAP Disclosures. The Accounting Review 91 (2): 677-705.

  • Jennifer M Mueller-Phillips
    Are Seemingly Self-Serving Attributions in Earnings Press...
    research summary posted July 16, 2015 by Jennifer M Mueller-Phillips, tagged 14.0 Corporate Matters, 14.05 Earnings Targets and Management Behavior, 14.08 Press Release Language and Signaling 
    Title:
    Are Seemingly Self-Serving Attributions in Earnings Press Releases Plausible? Empirical Evidence.
    Practical Implications:

    The finding that investors distinguish the plausibility among seemingly self-serving attributions based on concurrent industry performance and earnings commonality suggests that investors are somewhat sophisticated when interpreting these narrative disclosures. This study should be of interest to policymakers who advocate the importance of narrative disclosures. A potential concern that policymakers face is that managers can use unregulated narrative disclosures to manipulate investor perceptions, particularly if investors accept managers’ self-serving pronouncements uncritically. These findings mitigate this concern because investors appear to be sophisticated enough to use relevant information to distinguish the plausibility of seemingly self-serving attributions. Apparently, providing self-serving attributions purely to mislead investors may not be an effective strategy.

    Citation:

    Kimbrough, M. D., & Wang, I. Y. 2014. Are Seemingly Self-Serving Attributions in Earnings Press Releases Plausible? Empirical Evidence. Accounting Review 89 (2): 635-667.

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