An examination of the peer review process in accounting journals

An anonymous survey of university accounting faculty was conducted to assess current perceptions of the peer review process in accounting journals. The responses revealed that (a) most respondents are fairly positive about the peer review process, especially the process being fair/unbiased and improving the quality of research; (b) the most serious perceived threats to review process integrity involve reviewer misconduct (e.g., delaying reviews for self-interest or rejecting papers for revenge); (c) editors allowing excessive delays in the process and institutional favoritism by editors are seen as the most prevalent issues; (d) editors/associate editors of high-level or top-tier journals are most positive about the review process, while assistant professors, those at doctoral-granting institutions, and those submitting to top-tier journals are least positive; and (e) respondents’ suggestions for improving the review process emphasize improving timeliness, reducing favoritism, and reconsidering the notion of blind reviews (some consider blind reviews to be impossible, but others want to ensure that reviews are blind). Based on the results and other sources, we offer a proposed starting point for a peer review code of conduct for accounting journals.     

An empirical examination of stress in public accounting

This paper presents the results of an investigation of stress in public accounting, using a national sample of certified public accountants. The relationship between a set of predictor variables (organizational stressors and work/home conflict) and a set of criterion variables (job-related tension, job dissatisfaction, and propensity to leave public accounting) was analyzed using canonical correlation analysis. Job-related tension was associated with heavy work demands; job dissatisfaction and intension to leave were associated with slow career progress, unfulfilling jobs, and unclear job objectives.     

Culture and accounting in Indonesia: An empirical examination

This study examines the relationships among the cultural characteristics of Indonesian society, reporting practices of Indonesian firms, and accounting standards promulgated by the Association of Indonesian Accountants. It is argued that an empirical relation exists between the change in cultural values, as conceived by Hofstede's theory of the five dimensions of cultural values (power distance, uncertainty avoidance, individualism, masculinity, and time horizon and the change in accounting values as captures by Gray's four dimensions (professionalism, conservatism, secrecy, and uniformity). Using LISREL to evaluate data between 1981 and 1992, three of Hofstede's five cultural values (power distance, uncertainty avoidance, and individualism) have significant relationships with one or more accounting value. This limited confirmation of the culture-accounting relationships suggest that particular historical and economic configurations must be considered in longitudinal analysis. The conflicting influences of extensive government involvement in the economy and nascent market competition are a possible explanation of the Indonesian results.     

Threshold citation analysis of influential articles,journals, institutions and researchers in accounting

We use a threshold citation approach to measure the influence of articles, journals, institutions and researchers in accounting research. The Journal of Accounting Research, the Journal of Accounting and Economics and Accounting Review are the 3 most influential journals in accounting research. The 3 most influential institutions in accounting research are the University of Chicago, the University of Pennsylvania and the University of Michigan, while the 3 most frequently cited authors in accounting research are Richard G. Sloan, Robert E. Verrecchia and Paul M. Healy.     

An examination of the effect of international investors on accounting information quality in Russia

This paper investigates the impact of international investors on the quality of financial accounting information in Russia. I hypothesize that international stock ownership leads to enhanced quality and adoptions or intentions to adopt IFRS by Russian firms. Data was gathered through face-to-face interviews with 100 Saint-Petersburg firms randomly selected from the INFOWAVE data base. The results are consistent with the hypotheses.     

Social accounting research: An Australasian perspective

This paper provides an insight into the nature and the extent of social accounting research being undertaken within Australasia. It demonstrates that Australasian researchers account for a significant amount of internationally published social accounting research, but emphasises that the research effort seems to be confined to a limited number of researchers perhaps reflecting a lack of ‘take-up’ in this area in terms of the scale of participation. Information is also presented about the relative propensity of journals within the sample to publish social accounting research, and identifies that ‘top tier’ accounting journals historically have not published social accounting research. The paper also considers various factors which seem to be impeding the ‘recruitment’ of new social accounting researchers.     

The demise of the ARC journal ranking scheme: an ex post analysis of the accounting and finance journals

The recent abolition of the ARC journal ranking scheme is indicative of some problematical features of journal ranking in general and the ARC scheme in particular. An alternative citation‐based ranking scheme is applied to the accounting and finance journals to highlight some loopholes in the abandoned ARC scheme and provide some suggestions for how to proceed with ERA 2012. By re‐ranking journals according to their citation indices, it is demonstrated that the ARC ranking placed a large number of journals where they do not belong. As a result, the ARC scheme induced some adverse behavioural changes with respect to preferred publication outlets.     

Voluntary IAS 1 accounting disclosures prior to official IAS adoption: An empirical investigation of UK firms

This paper focuses on firms’ voluntary compliance with the reporting requirements of the International Accounting Standard (IAS) 1 before the official adoption of IASs. The paper seeks to identify the motives for the voluntary adoption of IAS 1 and investigates the relation to the provision of voluntary accounting disclosures, the increase in equity capital, managers’ remuneration and firms’ stock returns. The study shows that the decision-making process of firms is significantly influenced by the intention to improve key financial measures, such as leverage, profitability and growth. Firms would tend to adopt an accounting policy or regulation when they feel that adoption would favourably impact on their financial situation. For example, the study indicates that firms voluntarily adopted IAS 1 before the official IAS adoption date in order to provide evidence of superior managerial ability and high quality reported accounting information. It is found that firms that perform well are more motivated to voluntarily abide by IAS 1. The study also reports that firms that provide voluntary accounting disclosures and perform increases in their equity capital appear to voluntarily adopt IAS 1. Similar findings are obtained for firms that display higher management remuneration and stock returns.     

Including audit regulation in the accounting curriculum

Audits and auditors are regulated to uphold audit quality, thus regulation is important to the public interest and clearly impacts firms and CPAs. Moreover, the reach of audit regulation has expanded greatly in the last decade with the establishment of the Public Company Accounting Oversight Board (PCAOB). Recent research and calls from the profession point to enhancing the coverage of audit regulation in the accounting curriculum so that students understand the consequences of failing to adhere to professional standards. In this paper, we propose regulatory content for inclusion in the curriculum, we survey and catalog existing auditing textbooks and other educational materials for regulatory content, and we suggest flexible alternatives for incorporating this topic into the curriculum. It is our hope that, with these resources, faculty can more effectively include audit regulation in the classroom and achieve a high level of student comprehension and learning on the topic.     

Preparers’ control‐risk assessments under alternative audit‐review processes

This study investigates the impact of a decomposed audit‐review process on audit preparers’ control‐risk assessments, taking audit experience into consideration. Using an experiment, it manipulates the audit‐review type (decomposed review versus non‐decomposed review) and preparers’ audit experience level (more experienced versus less experienced). Analysis of data collected from two mid‐tier audit firms supported the author’s predictions. First, working‐paper preparers assessed control risk more accurately in a decomposed than in a non‐decomposed review. Second, less‐experienced auditors benefitted more from a decomposed review than more‐experienced auditors.     

Desired attributes of public accounting firms in the job selection process: an empirical examination of accounting graduates' perceptions

The purpose of this study is to identify attributes of public accounting firms that accounting graduates find most desirable in their job selection decisions, and the impacts of individual differences on these perceptions. Factor analysis performed on the responses of 167 final-year accounting students in Hong Kong to a 30-item questionnaire identified seven factors. The results indicate that accounting graduates considered help in finishing their professional accounting examinations and good staff relationships as the most important criteria in their choice of employers. In addition, female accounting graduates were more concerned about the possibility of being required to travel or be transferred, but were less concerned about the reputation and profile (such as the client base and the size) of the firms than their male counterparts. Accounting graduates with a higher grade point average (GPA) were less concerned about the working environment, but more concerned about a firms' reputation and profile than those with a lower GPA. The implications of these results are discussed.     

Appropriateness of accounting data in performance evaluation: An empirical examination of environmental uncertainty as an intervening variable

Rooted in contingency theory, this study puts forth propositions stating (1) that superiors of business units which face higher environmental uncertainty will use a more subjective performance appraisal approach whereas superiors of business units which face lower environmental uncertainty will use a more formula-based performance evaluation approach, and (2) that a stronger fit between environmental uncertainty and performance evaluation style would be associated with higher business unit performance. Findings from 58 business units in eight Fortune 500 firms provide strong support to both sets of these propositions.     

An empirical examination of the benefits of international diversification

We examine the benefits of international portfolio diversification for U.K. investors between January 1985 and December 2000 using the approach of Wang [Wang, Z., 1998. Efficiency loss and constraints on portfolio holdings. Journal of Financial Economics 48, 359–375] and Li et al. [Li, K., Sarkar, A., Wang, Z., 2003. Diversification benefits of emerging markets subject to portfolio constraints. Journal of Empirical Finance 10, 57–80]. We find significant increases in the Sharpe [Sharpe, W.F., 1966. Mutual fund performance. Journal of Business 39, 119–138] and certainty equivalent return (CER) performance in moving from a domestic strategy to an international strategy that includes either global industry or country equity portfolios, even in the presence of short selling restrictions. We also find significant diversification benefits using U.K. unit trusts with international equity objectives. However, U.K. international unit trusts do not capture all the diversification benefits provided by either global industry or country equity portfolios.     

An empirical examination of the implications of arbitrage pricing theory

This paper presents a comprehensive set of tests of the implications of the Arbitrage Pricing Theory. We find, unlike previously reported results, a very limited relationship between the expected returns and the covariance (factor loadings) measures of risk. Furthermore, unique variance measures of risk, while generally making only small contributions to the explanation of asset returns, turn out to be significant about as frequently as the coveriance measures of risk — which is inconsistent with the Arbitrage Pricing Theory model. The intercept tests are more mixed but provide only limited support to the model.     

An empirical examination of capital expenditure in the health sector

This empirical study in the nursing home industry attempts to delineate factors, and thus acquire insights, as to capital expenditures, and address a critical issue regarding governmental reimbursement policy and the economic viability of health care institutions. Combinations of financial performance, financial structure, and institutional context associated with high capital investment nursing homes differ from combinations associated with low capital investment homes. A multivariate analysis of data obtained from 185 nursing homes shows that although there was some difference between the two groups of nursing homes in basic financial and institutional characteristics, only a small subset of the variables were statistically significant discriminators. The hypothesis was then examined within each of the three major nursing home segments—for-profit, not-for-profit, and country homes. Neither financial performance, financial structure, nor institutional context alone is sufficient to explain differences in capital investment behavior. Perhaps more importantly, the extent to which these combination of factors do contribute to explaining capital investment strategies differs within each of the major segments of the industry. Also, these combinations of factors generally differ across the major industry segments as they relate to capital investment strategies.     

International day-of-the-week effects: An empirical examination of iShares

Ample evidence suggests that day-of-the-week patterns exist in US and foreign equity returns. We extend the evidence on the day-of-the-week effect in equity returns by examining the return patterns of iShares for 17 countries and Standard and Poor's Depository Receipts (SPDRs) to establish whether previously observed predictabilities in equity returns are reflected in iShares' returns. We utilize a split sample to examine return patterns and develop trading rules using the initial subsample. We then test those trading rules out of sample. Empirical results reveal that iShares exhibit day-of-the-week return patterns that can be exploited by informed traders.     

An empirical examination of forecast disclosure by bidding companies

This paper examines voluntary disclosure of profit forecasts by bidding companies during takeovers. Disclosure is examined from two perspectives: (i) factors influencing disclosure and (ii) the influence of good news and bad news on disclosure. Takeover documents published during 701 takeover bids for public companies listed on the London Stock Exchange in the period 1988 to 1992 were examined. Two variables accounted for almost all the influences on disclosure of forecasts: bid horizon and type of bid. Probability of forecast disclosure was greater the shorter the bid horizon and during contested bids. In addition, there was some evidence that the nature of the purchase consideration offered by the bidder (cash or paper) and the industry of the bidder influenced disclosure. Disclosure was significantly more likely in paper bids and in the durable goods industry. Forecasts were more likely to be disclosed when firms had good news to report.     

Utilising a typology of management accounting change: An empirical analysis

Management accounting change, currently an increasingly popular focus for research, is not a uniform phenomenon. Its nature and form may vary across multiple dimensions and this variation has been neglected by researchers who have tended to study change per se rather than distinguishing it though a categorisation by type. This paper explores the forms which management accounting change has taken in a sample of manufacturing companies by utilising a simple typology of management accounting system change, derived from the existing research literature, consisting of addition, replacement, output modification, operational modification and reduction. This classification is combined with information on the incidence, location, importance and success of management accounting changes to provide some analytical insights into the variety and patterns of change within these companies and to derive some guidance for future research on the topic.     

Corporate Disclosure Quality: Lessons from Australian Companies on the Impact of Adopting International Financial Reporting Standards

For annual reporting periods beginning on or after 1 January 2005, Australian companies were required to comply with the Australian equivalents of International Financial Reporting Standards (AIFRS). To ensure a smooth transition, a broadly defined standard (AASB 1047) mandated pre-adoption company disclosures of the AIFRS' impact. The standard provided managers with the opportunity to exercise considerable discretion in complying with the underlying disclosure requirements. We examine how this discretion impacted on the quality of pre-adoption AIFRS disclosures provided by a sample of large Australian companies. Using a disclosure quality index, we find considerable evidence of a cross-sectional variation in disclosure quality that varies according to differences in the AIFRS financial impact, size, industry and profitability factors. Importantly, we also observe individual Big 4 audit firm influences on disclosure quality. These findings highlight consequences of mandating corporate disclosures based on broadly defined principles.     

Ethical evaluations and behavioural intentions of early career accountants: the impact of mentors,peers and individual attributes

This study examined how mentoring support, peer influence and individual attributes of early career accountants (ECA) influence their ethical evaluations and behavioural intentions. Respondents indicate that their evaluation of the seriousness of the ethical conflict is affected by the perceived standard of ethical conduct of their peers, their personal ethical orientation, the extent of ethics education at university, and gender. ECAs’ evaluation of a senior colleague's unethical behaviour is affected by mentoring support and the perceived standard of ethical conduct of peers. In terms of ECAs’ willingness to contact accounting professional bodies for ethical advice, the size of the accounting firm and the extent of their ethics education at university are significant factors. Furthermore, the likelihood of respondents choosing a more ethical decision is correlated with his or her individual ethical orientation and the extent of ethics education at university.