How and why auditors’ social exchange relationships influence their attitudes and behaviors: Implications for audit quality

External auditors regularly interact with various parties at work, such as their accounting firms, engagement team members, and clients. These interactions can help shape the nature of auditors’ social exchange relationships with these entities, which in turn may influence their behavior toward these targets. This installment of Accounting Matters draws from recently published research by Herda and colleagues to (1) explain how constructive auditor-target connections can develop and lead to beneficial outcomes like reduced auditor burnout and turnover intentions, as well as more citizenship behavior, and (2) discuss how these upshots might ultimately affect audit quality. This topic is important because audit quality translates into improved financial reporting, which helps stakeholders who rely on audited financial statements to make informed business decisions. Specifically, we underscore the key role auditors’ perceptions of fair treatment from a relationship partner play in fostering a strong psychological bond with the target via perceived support. We further consider how auditors’ consequent commitment to the target can result in favorable organizational outcomes, including enhanced audit and financial reporting quality. We also discuss practical implications for accounting firms.     

Optimal targeting of latent tourism demand segments

This paper identifies for the first time the optimal target markets employing the latent tourism demand expenditure, a novel concept in tourism literature. The study quantifies latent tourism demand between each pair of origin-destination through distinguishing by type of tourism and seasonality. It works with market shares that are estimated via a fractional regression model. Moreover, latent demand is clustered using a market segmentation approach based on a latent class regression. Finally, the optimal target markets are chosen depending on the expected latent tourism expenditure. The result has clear policy implications in terms of which markets are promoted, the optimal channels of communication and the maximum budget for each marketing campaign.     

Incorporating active adjustment into a financing based model of capital structure

The conventional partial adjustment model, which focuses on leverage evolution, has difficulty identifying deliberate capital structure adjustments as it confounds financing decisions with the mechanical autocorrelation of leverage. We propose and estimate a financing-based partial adjustment model that separates the effects of financing decisions on leverage evolution from mechanical evolution. The speed of adjustment (SOA) is firm-specific and stochastic, and active targeting of capital structure has a multiplier effect that depends on the size of financial deficit. Overall, we find expected SOA from active rebalancing (30%) more than doubles what is expected from mechanical mean reversion alone (13%).     

Banding together in a festival context: Examining effects of a joint-stakeholder external service recovery

Despite substantial growth in revenue and attendance numbers on a global and country level over the past decades, failure is still a fairly common phenomenon in the events/festival industry. Drawing on two scenario studies and data collected in the United States, this research investigated the impact on festival-goers’ evaluations and behavior of joint-stakeholder external service recoveries, in contrast to the prevalent focus on examining service recoveries by a single stakeholder that caused the failure. Findings revealed that festival-goers had different perceptions of and behavioral intentions towards the various stakeholders depending on their perception of fault for the failure. Yet, rather than a predicted joint effect with failure severity, we found a significant interaction effect of the locus of causality with service recovery measures, either via an internal or external recovery. Implications of study findings and directions for future research are discussed.     

Recognition in India’s new service professions: gym trainers and coffee baristas

ABSTRACT

How do employees in “new services”, such as coffee baristas and gym trainers in India, see their jobs? In this paper, we build on extensive fieldwork in gyms and coffee chains that cater to the emerging Indian middle classes. Our research highlights the importance of respect and recognition in making service interactions more meaningful for new service workers. Generally hailing from the lower middle classes, new service work offers important opportunities to interact with and learn from English-speaking upper middle-class customers and clients. Besides the opportunity to interact and learn, the acknowledgement they receive for their skills and (bodily) accomplishments make such professions attractive as well. Even if this holds the potential for upward socioeconomic mobility, our findings also point at the resilience of social hierarchies. Drawing on literature on service interactions and new middle-class formation in India, this paper provides important insight into how young Indians navigate and negotiate the opportunities and pitfalls that come with the country's changing socioeconomic landscape.     

基于动态因子Copula模型的我国银行系统性风险度量

本文基于2007年至2019年我国14家上市银行的股票收益率,构建偏态t-分布动态因子Copula模型,利用时变荷载因子刻画单家银行与整个系统的相关性,计算联合风险概率作为系统性风险整体水平的度量,基于关联性视角提出了新的单家机构系统脆弱性和系统重要性度量指标——系统脆弱性程度和系统重要性程度。该方法充分考虑了银行个体差异性和系统的内在关联性以及收益率的厚尾性和非对称性,从而能够捕捉到更多的信息且兼具时效性。研究表明:银行机构在风险聚集时期相关程度更大,联合风险概率能够准确识别出系统性风险事件且在我国推行宏观审慎评估体系以后有明显降低;整体而言,大型商业银行系统重要性水平最高,同时风险抗压能力也最强;本文使用的度量方法降低了数据获取成本且更具时效性,有助于为宏观审慎差异化监管工作提供借鉴和参考。     

农业减量化：农户经营的规模逻辑及其证据

本文将农户分为五种类型,并将农地规模分解为地块规模、经营规模与连片规模,由此构建“农户类型—规模形式—减量化行为”的分析框架,进而阐明农户减量化的规模逻辑。基于农户问卷的实证分析表明:①对于所有样本农户来说,地块规模越大,减施量越高。其中,追求产量最大化的生产型小农,减施量与经营规模呈“倒U”型变化,而追求多元化经营的功能型小农,减施量随经营规模的扩大而增加;②农户连片规模扩大,减施量就增高,并且能够增强地块规模扩大以及经营规模扩大对减施的促进作用;③农户社会服务卷入程度加深,能够增强地块规模、经营规模和连片规模扩大对减施的促进作用。据此,农业减量化,应鼓励农户开展连片种植,形成生产性服务的市场容量,然后诱导服务供应商提供专业化服务,进而实现服务规模经营对农地规模经营的替代。     

Joint audits and mutual ties of audit firm networks

There has been a lively debate following the 2007 financial crisis regarding the role of joint audits. Prior research argues that joint audits may improve audit quality because of shared audit efforts. However, empirical evidence has been inconclusive. To gain insight into how Big 4 audit firm imprimaturs have become a source of legitimacy in the audit industry, this article investigates how audit networks drive the audit industry in Saudi Arabia. Based on the application of quantitative and qualitative research methods, we conclude that the Big 4 audit firms have strong mutual ties, but ties with other local and international audit firms are weak. We also find the oligopolistic nature of the Big 4 audit firms and international audit firms. Specifically, Ernst & Young, KPMG, PwC, and PKF are controlling over 68% of the audit market. Interviews with accounting professionals suggest that several benefits of joint audits exist, but certain additional costs are also implicated. Our findings are particularly relevant for regulators and local and international policymakers in rethinking and evaluating the appropriateness of either the mandatory or voluntary nature of joint audits in developing countries.     

Deal characteristics and M&A performance: How do hospitality firms fare?

The global hospitality industry has experienced significant consolidation in the past several decades. While evidence in the general business literature suggests that the target firm shareholders gain instead of the acquiring firm shareholders, some studies in the hospitality industry have suggested that mergers and acquisitions (M&As) are also beneficial to acquiring firms. Using a comparative study design and a comprehensive sample over 41 years, we empirically examine whether M&As create more value in the hospitality industry than in other industries and whether certain deal characteristics may explain the potential performance differential. Overall, we find that M&As in the hospitality industry outperform M&As in non-hospitality sectors. When examining deal attributes, we find that relative size of target, cash method of payment, and an unlisted target are characteristics positively related to merger performance and help explain some of the performance differential. We contribute theoretically and empirically to the literature by demonstrating that industry and deal effects play an important role in M&A performance.     

铁路客运专线成本曲线分析

借鉴国内外客运专线资料,对铁路客运专线运输成本的特性及构成进行论述,并从速度目标值与客运量两方面分析对运输成本的影响,说明速度目标值直接影响客运专线的运输成本,而固定成本与客运量无关,变动成本与客运量成正比变化。