The effect of task complexity and expert system type on the acquisition of procedural knowledge: Some new evidence

Prior studies in accounting examining the effect of expert system use on procedural knowledge acquisition have reported that providing feedback in the form of rules, text explanation, or examples had no incremental effect on procedural knowledge acquisition. This finding is contrary to literature in psychology regarding the impact of feedback on knowledge acquisition. One of the reasons that the accounting literature may not show that feedback impacts knowledge acquisition relates to task complexity. Simple tasks require little processing on the part of the decision-maker and may not lead to learning effects even when feedback is provided. On the other hand, feedback coupled with complex tasks that require increased processing may help the decision-maker learn more about task completion causing knowledge acquisition to occur. This study extends previous research by examining whether task complexity and the type of feedback provided by an expert system affect the acquisition of procedural knowledge. This issue is important since procedural knowledge acquisition may differ between certain combinations of tasks and expert system types. This study manipulates both task complexity and the type of feedback provided by an expert system. The findings indicate that task complexity plays a major role in the acquisition of procedural knowledge for expert system users. Subjects in the expert system groups who evaluated the complex cases acquired a significantly greater amount of procedural knowledge than subjects who evaluated the simple cases. As predicted, there was no difference in amount of procedural knowledge acquired between subjects in the control groups regardless whether the task was simple or complex. Results also qualify findings of previous research in noting that acquisition of procedural knowledge only significantly differed between expert system users and the control group when the task was complex. These findings indicate that, of the two components, feedback and task complexity, task complexity plays the more important role in affecting procedural knowledge acquisition.     

The Role of Tacit Knowledge in Auditor Expertise and Human Capital Development

Two critical aspects of the model of auditor expertise development in Tan and Libby [1997] are that audit firms do not value tacit knowledge in inexperienced auditors but do value it in experienced auditors. We update the former and extend the latter. Our paper predicts and finds that audit firms now do value tacit knowledge in inexperienced auditors, especially when their supervisors have higher tacit knowledge. Our proxies of value include higher promotability assessments, annual evaluations, and cash bonuses. Our paper also extends Tan and Libby [1997] by positing that enhanced development of expertise and audit firm human capital are two reasons audit firms value tacit knowledge in experienced auditors. As predicted, higher tacit knowledge in experienced auditors is positively associated with higher tacit knowledge acquisition by their inexperienced subordinates and with stronger firm commitment of inexperienced subordinates having higher tacit knowledge.     

The disposition effect and investor experience

We examine whether investing experience can dampen the disposition effect, that is, the fact that investors seem to hold on to their losing stocks to a greater extent than they hold on to their winning stocks. To do so, we devise a computer program that simulates the stock market. We use the program in an experiment with two groups of subjects, namely experienced investors and undergraduate students (the inexperienced investors). As a control procedure, we consider random trade decisions made by robot subjects. We find that though both human subjects show the disposition effect, the more experienced investors are less affected.     

Do tax decision support systems affect the accuracy of tax compliance decisions?

Tax complexity has increased over the years as laws and regulations have been consistently added to the existing code sections. This complexity directly affects taxpayer compliance; complexity reduces taxpayer compliance. Along with the rise in complexity has come an increased use of tax preparation software such as TurboTax to combat the rising intricacy. This software is designed to help users properly complete a tax return and, as a result, increase taxpayer compliance. These software packages represent sophisticated tax decision support systems (TDSS) used by both professional tax preparers and individual taxpayers alike. While the availability and use has risen dramatically over the past few years, little research has been conducted to determine the impact of TDSS on tax preparers' decisions. The purpose of this study is to examine whether tax preparers manually preparing a tax return make the same decisions as tax preparers aided by a TDSS. The Theory of Technology Dominance suggests (1) that less experienced users will not be able to adequately use the TDSS and will make inferior decisions when compared to more experienced users and (2) that more experienced decision-makers using a TDSS will make better decisions than their counterparts preparing a return manually. The results support the propositions of the theory and show that less experienced tax preparers using a TDSS make inferior decisions when compared to more experienced tax preparers. The less experienced tax preparers report higher taxable income and higher tax liability. The results also indicate that using a TDSS can help both experienced and novice tax preparers make better decisions even though the novices cannot perform at the level of experienced tax preparers. This study concludes tax compliance is improved with the use of a TDSS.     

Embodied uncertainty: living with complexity and natural hazards

In this paper, we examine the concept of embodied uncertainty by exploring multiple dimensions of uncertainty in the context of risks associated with extreme natural hazards. We highlight a need for greater recognition, particularly by disaster management and response agencies, of uncertainty as a subjective experience for those living at risk. Embodied uncertainty is distinguished from objective uncertainty by the nature of its internalisation at the individual level, where it is subjective, felt and directly experienced. This approach provides a conceptual pathway that sharpens knowledge of the processes that shape how individuals and communities interpret and contextualise risk. The ways in which individual characteristics, social identities and lived experiences shape interpretations of risk are explored by considering embodied uncertainty in four contexts: social identities and trauma, the co-production of knowledge, institutional structures and policy and long-term lived experiences. We conclude by outlining the opportunities that this approach presents, and provide recommendations for further research on how the concept of embodied uncertainty can aid decision-making and the management of risks in the context of extreme natural hazards.     

The dark side of financial innovation: A case study of the pricing of a retail financial product

The offering prices of 64 issues of a popular retail structured equity product were, on average, almost 8% greater than estimates of the products' fair market values obtained using option pricing methods. Under reasonable assumptions about the underlying stocks' expected returns, the mean expected return estimate on the structured products is slightly below zero. The products do not provide tax, liquidity, or other benefits, and it is difficult to rationalize their purchase by informed rational investors. Our findings are, however, consistent with the recent hypothesis that issuing firms might shroud some aspects of innovative securities or introduce complexity to exploit uninformed investors.     

VALUE FOR MONEY AUDITING - AN INTERNATIONAL REVIEW AND COMPARISON

This paper considers the application of value for money auditing in six countries. It is hoped thereby to instil a greater realization of what is done and what might be done. Approaches vary, they can be structured or highly unstructured. Some countries offer their auditors less restrictive mandates than others. To date, despite a wealth of international practical experience, no standard approach has been adopted which adequately covers all the varied aspects of value for money auditing.     

Assisting Inexperienced Accountants in Developing Financial Statements

Finnish accounting regulation allows firms a lot of discretion in affecting net profit, e.g. via tax depreciation on fixed assets and changes in untaxed reserves. The Tax Authorities use the net profit as a basis when calculating taxes for the period. This means that tax planning plays a central role in developing financial statements. The planning requires a lot of expertise and is often a difficult and time-consuming task, especially for less experienced accountants. The author has built a knowledge-based system to aid in developing the financial statements for limited companies. The usability of the system for inexperienced accountants has been tested and the system and the test conducted is described. The results of the test show that the system is of considerable help for inexperienced accountants.     

Bearing an imprint: CEOs' early-life experience of the Great Chinese Famine and stock price crash risk

We propose and test whether adverse life events experienced by CEOs are associated with firms' stock price crash risk. Based on a large sample of Chinese companies from 2000 to 2015, we find evidence that companies whose CEOs experienced the Great Chinese Famine in early life have lower stock price crash risk than those with CEOs who did not experience the famine. Further, the negative association between famine experience and crash risk is more pronounced for firms whose CEOs have greater decision-making powers and for non-State-owned enterprises. We also find direct links between famine experience and various factors that have already been documented as determinants of crash risk. Our results support behavior economics theory on imprinting: CEO memories of adverse life experiences have an indelible effect on their decision-making processes, which in turn influence how the financial information is provided and disclosed to the stock market.     

Hiring for smarts

Yes, it's nice when a leader is charismatic and confident. And a great resume can tell you a lot about a person's knowledge and experience. But such assets are no substitute for sheer business intelligence, and they reveal very little about a leader's ability to consistently reach the "right" answer. How can hiring managers flag individuals with such smarts? Historically, the only reliable measure of brainpower has been the standard IQ test, which is rarely used in business settings because of the specific subjects it tests for-math, reading, and spatial reasoning-and because of its multiple-choice format. Despite its shortcomings, the standard IQ test is still a better predictor of managerial success than any other assessment tool companies currently use, Justin Menkes argues. It's true that there isn't a version of IQ testing that applies to the corporate world, but in rejecting IQ tests altogether, hiring managers have thwarted their own attempts to identify true business stars. The author defines the specific subjects that make up "executive intelligence"-namely, accomplishing tasks, working with people, and judging oneself. He describes how to formulate questions to test job candidates for their mastery of these subjects, offering several examples based on real situations. Knowledge questions, such as those used in standard behavioral interviews, require people to recite what they have learned or experienced; intelligence questions call for individuals to demonstrate their abilities. Therefore, the questions in an executive intelligence test shouldn't require specific industry expertise or experience; any knowledge they call for must be rudimentary and common to all executives. And the questions should not be designed to ask whether the candidate has a particular skill; they should be configured so that the candidate will have to demonstrate that skill in the course of answering them.     

Directors with foreign experience and corporate tax avoidance

Using a large sample of hand-collected directors' foreign experience data for Chinese listed companies from 2001 to 2016, we examine the impact of directors with foreign experience on corporate tax avoidance. We find a significantly negative association between directors with foreign experience and tax avoidance, suggesting that these directors can help constrain their firms' tax aggressiveness. The result is robust to Heckman two-stage analysis, instrumental variable approach, inclusion of potential omitted variables, change analysis, and alternative tax avoidance measures. Further analyses reveal that reputation concerns and CSR awareness are potential channels through which returnee directors affect corporate tax avoidance. The negative relation between directors with foreign experience and tax avoidance only holds when directors' foreign experiences are derived from countries or regions with higher investor protections. Non-independent directors with foreign experience have larger impacts on corporate tax avoidance than independent directors, and the effect is more pronounced when directors with foreign experience sit on audit committees. Directors' working and studying experiences both have important impacts on corporate tax avoidance. The result also suggests that the negative relation between directors with foreign experience and tax avoidance is more pronounced in non-state-owned firms. Overall, the findings suggest that directors' foreign experience matters for corporate tax behavior in emerging markets.     

公司税收规避、税率持续性与股票收益波动率

从税率平稳性角度看,避税活动是否会增加税率波动性进而给企业带来高风险是一个值得探讨的重要问题。从动态视角研究发现,避税是一种策略性行为,低实际税率的企业相比高实际税率的企业,其税率在长时期内能够保持平稳。此外,避税活动并不一定会带来未来税率和股票收益的波动性。这说明公司通常采用持续、稳定的税收策略,不会带来公司风险的激增。进一步研究发现：节税率的波动性与公司未来股票收益波动存在着显著正相关,即当避税引起税率波动较大时,会带来公司股票收益风险的增加。     

对我国企业跨境并购重组税收政策的一些看法

目前,我国大规模的企业并购重组尤其是跨境并购重组不断发生。本文分析了当前我国有关企业跨境并购重组税收政策方面存在的问题,并借鉴国外做法,立足我国实际情况,提出进一步完善税收政策和加强税收征管的建议。     

Sharing corporate tax knowledge with external advisers

Tax knowledge is critical for companies to comply with tax laws and engage in tax planning and avoidance. Firms rely on external advisers in handling tax issues, however, sharing corporate tax knowledge with external advisers entails both opportunities and risks. We identify four relational factors that are associated with the decision of corporate taxpayers to share knowledge with external tax advisers. Survey data from 221 corporate taxpayers reveals a novel distinction between operational and strategic knowledge sharing. The operational dimension has a functional nature, whereas the strategic dimension has a more intentional character. Accessibility to, and a positive experience with, external advisers enables operational knowledge sharing. When firms perceive specific tax benefits in relation to sharing knowledge, they are more inclined to engage in operational knowledge sharing with external advisers but less prone to strategic knowledge sharing. Instead, strategic knowledge sharing is enhanced when firms have access to, and value the knowledge of their advisers, although this latter factor plays no significant role in explaining operational knowledge sharing. A positive experience with advisers also associates with strategic knowledge sharing. We link our results to other research and discuss implications for regulators considering, or requiring, firm disclosures of corporate tax strategy.     

An ontological artifact for classifying social media: Text mining analysis for financial data

In this paper we utilize a structured natural language processing implementation of the Financial Industry Business Ontology (FIBO) to extract financial information from the unstructured textual data of the social media platform Twitter regarding financial and budget information in the public sector, namely the two public-private agencies of the Port Authority of NY and NJ (PANYNJ), and the NY Metropolitan Transportation Agency (MTA). This research initiative uses the Design Science Research (DSR) perspective to develop an artifact to classify tweets as being either relevant to financial bonds or not. We apply a frame and slot approach from the artificial intelligence and natural language processing literature to operationalize this artifact. FIBO provides standards for defining the facts, terms, and relationships associated with financial concepts. We show that FIBO grammar can be used to mine semantic meaning from unstructured textual data and that it provides a nuanced representation of structured financial data. With this artifact, social media such as Twitter may be accessed for the knowledge that its text contains about financial concepts using the FIBO ontology. This process is anticipated to be of interest to bond issuers, regulators, analysts, investors, and academics. It may also be extended towards other financial domains such as securities, derivatives, commodities, and banking that relate to FIBO ontologies, as well as more generally to develop a structured knowledge representation of unstructured data through the application of an ontology.     

The effect of constrained processing on auditors’ judgments

This study examines whether constraining experienced auditors’ processing by having them process evidence in a pre-established sequence (an experimental control technique used in previous studies) prevents them from using their usual processing strategies and thereby affects their judgments. We compare the relative attention to evidence and judgments of experienced and inexperienced auditors in a constrained versus an unconstrained processing condition. Consistent with expectations, experienced auditors’ going-concern judgments differed from inexperienced auditors’ judgments only when processing was unconstrained. This difference in judgments was the result of differential attention to evidence. These results demonstrate that the failure to consider how experienced auditors process evidence can result in inadvertently adopting control techniques that limit the generalizability of experimental findings. Although our study used a going-concern task, our conclusions are likely to apply to a variety of ill-structured audit tasks that require a goal-oriented, directed evaluation of evidence.     

Cue usage in financial statement fraud risk assessments: effects of technical knowledge and decision aid use

This paper investigates the effects of technical knowledge and decision aid use on financial statement fraud risk assessments made by directors and students. More extreme fraud risk assessments are made when participants identify and process larger (smaller) numbers of diagnostic (non‐diagnostic) factors, with technical knowledge driving diagnostic factor identification. Significant decision aid‐technical knowledge effects are also found; decision aid use has a detrimental effect on high‐knowledge directors while improving performance in inexperienced, low‐knowledge students. These results suggest that although decision aids can afford gains in performance in inexperienced users, they can have unintended and/or paradoxical behavioural effects on experienced users.     

Tax compliance in a social setting: The influence of social norms,trust in government,and perceived fairness on taxpayer compliance

Voluntary tax compliance is important for governments around the world as they try to manage budget deficits. Traditional methods to improve tax compliance, such as increased audits, can be costly to implement. The purpose of this study is to examine the influence that social factors have on individuals' tax compliance intentions. Results of a survey of 217 U.S. taxpayers found support for the influence of social factors on tax compliance. This research concludes that social norms influence compliance intentions indirectly through internalization as personal norms. Specifically, as the strength of social norms in favor of tax compliance increases, personal norms of tax compliance also increase, and this leads to a subsequent increase in compliance intentions. We also conclude that trust in government has a significant influence on both perceived fairness of the tax system and compliance decisions. This study adds to current tax research in two important ways. First, the results suggest that the influence of social norms on tax compliance is largely through internalization as personal norms. Second, to the best of our knowledge this is also the first tax compliance study in which perception of fairness is modeled as a function of trust rather than vice-versa. This research may help taxing authorities develop less costly and more effective strategies for increasing taxpayer compliance.     

The effect of director experience on acquisition performance

Prior research finds that firms hire directors for their acquisition experience, regardless of acquisition quality (whether their prior acquisitions earned positive or negative announcement returns). Using several short- and long-run measures, we examine the effects of directors’ acquisition experience on the acquisition performance of firms hiring them. We find that board acquisition experience is positively related to subsequent acquisition performance, demonstrating that firms appropriately value experience. Beyond experience itself, however, the quality of directors’ prior acquisitions is also important. Our results suggest that firms may be better served to select directors based upon both past acquisition experience and acquisition performance.     

德国新型个人储蓄性养老保险计划述评

德国新型个人储蓄性养老保险计划(里斯特养老金和吕库普养老金)通过税收优惠和直接补贴的方式极大地激发了个人购买储蓄性养老保险计划的热情,多角度分析上述两种养老金计划,总结其成功经验,对我国促进个人储蓄性养老保险计划的发展有一定的启示。