The value relevance research in accounting offers robust analyses about how the market views accounting information. Although significant work has been done to date in this mature research area, the literature does not fully explain or agree upon the changes in value relevance over time, and the impact of economic conditions on the value relevance of accounting information is a relatively understudied research stream. We review three streams of the value relevance literature: (i) the value relevance of earnings and book values, (ii) the value relevance of other accounting information, and (iii) the role of economic conditions on the value relevance of accounting information. Further, we review the various explanations put forth in the literature to try to explain the variation in value relevance over time. Finally, we provide a limited baseline for the current state of scholarly work and offer insight for future value relevance research.
This study analyzes the knowledge and methods used in information systems (IS) journals in the area of financial statement fraud. The purpose of this analysis is to provide tools and ideas to support interdisciplinary research in accounting and information systems for financial statement fraud topics. The study presents an analysis of five top ranking IS journals (MIS Quarterly, Information Systems Research, Communications of the ACM, Management Science, and Journal of MIS) and five top ranking IS conferences [International Conference on Information Systems (ICIS), Hawaii International Conference on System Sciences (HICSS), International Federation for Information Processing (IFIP), International Conference on Decision Support Systems (DSS), and Decision Sciences Institute National Conference (DSI)]. The literature found from these sources are categorized and presented by year, journal, contribution, type of study, methodology, data set usage, and research design. Although the literature varies, a common thread in many studies is the use of data mining and/or machine learning models to detect fraud.
We use Glassdoor employee rating measures to examine the relationship between employee perceptions about their employer and the employer’s level of financial distress, proxied by Bloomberg’s one-year default probability. Our results indicate that improvements (deterioration) in Glassdoor ratings reveal a decrease (increase) in the average firm’s level of financial distress. We also find that the relation between a firm’s level of financial distress and Glassdoor ratings is not uniform across all firms: the relation is stronger for small and mid-capitalization firms. By establishing a relationship between Glassdoor ratings and the level of financial distress, our study adds to the forensic accounting literature and shows that Glassdoor ratings can help auditors, regulators, investors, and market participants predict future concerns relating to financial distress. Our results suggest that employee perceptions provide an early warning for financial red flags, as the pressures from financial distress increase the risk of fraudulent behaviors. Data Availability: On request. JEL Classifications: G33; G41; M14; M41.
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