Tomorrow's accounting professionals need to understand both accounting and data analytics. To meet these needs, we developed a case that combines an important area of tax accounting, Effective Tax Rates (ETRs), with multiple data analysis skills. The case can be completed in Excel, or with Tableau and/or Alteryx, using Compustat or public data. The case's learning objectives for students are to: (1) expand knowledge of data analytics and ETRs; (2) use critical-thinking skills to identify economic, industry, and firm-level factors that might affect ETRs; (3) develop skills specific to data analytics and data visualization in accounting; and (4) develop effective oral and written communication skills. We evaluate the case's efficacy using data from pre- and post-learning assessment surveys and open-ended responses, which indicate that the comprehensive case meets these learning objectives.
This paper examines the largest corporate fraud in India at Satyam Computer Services Ltd. This fiasco occurred in January 2009 when Mr. Ramalinga Raju, the Chairman, confessed to an extensive accounting fraud that was ongoing for at least seven years. Since then, a large number of articles have been written on this subject. Most of this research has blamed the board of directors and independent auditors of Satyam for this fraud. While this paper does not defend or blame the auditors as their role is being investigated at this point, we argued that independent directors were following their roles as they saw it. We provide evidence that the directors raised objections at the questionable transactions. However, they viewed their role as 'strategic advisors' and not as 'watchdogs'. We recommend that Indian regulatory framework needs to be strengthened and the roles of independent directors need to be clearly defined to prevent such frauds. The early examinations suggest that auditors at Satyam colluded with Mr. Raju in this fraud. We provide the shortcomings of the Indian auditing industry and argued that this industry is fragmented and needs consolidation. We provide recommendations to improve the auditing infrastructure in India that will enhance the corporate governance mechanism. This paper contributes to the literature by documenting Satyam's fraud and arguing for the independent directors.
On April 11, 2017, the SEC announced charges against KPMG – arising from their participation in a scheme to use confidential information relating to the PCAOB’s planned inspections of KPMG. The incident was colloquially labeled the KPMG ‘steal the exam scandal.’ We use this setting to investigate whether the market finds information concerning individual partner identity useful. Since KPMG withheld the names of the audit partners involved in the scandal, the market was unable to distinguish between rotation-induced audit partner turnover and regulatory-related, audit partner terminations. Following information economics models of non-disclosure, we predict the market would use information about KPMG audit partner turnover as evidence of regulatory-related, audit partner terminations and impose costs on KPMG audit clients who experienced audit partner turnover. The results are consistent with our prediction as KPMG’s overall reputation was not damaged, whereas audit engagements involving audit partners potentially involved in the scandal were.
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