Purpose The purpose of this paper is to examine the impacts of companies’ voluntary adoption of the General Data Protection Regulation (GDPR) as well as the readability of privacy statements on US customers’ intention to disclose information and their trust in a company. Design/methodology/approach Building on the construal level theory and psychological distance, the authors conduct a 2 × 2 + 2 between-participants experiment with 255 participants. Findings The findings show that a company’s voluntary adoption of the GDPR has positive effects on customers’ intention to disclose information to and their trust in that company. In addition, the effects of GDPR adoption are stronger when the adopting company’s privacy statements possess a higher level of readability. Originality/value The authors believe this study poses policy implications for the outcomes of GDPR adoption and the recent debate on both a stricter data breach and privacy regulation.
After the SEC's (2008) guidance on website disclosures, firms began providing digital annual reports with summarized financial performance graphs in a wide variety of formats. This study examines the effect of graphical vividness on nonprofessional investors' impressions of management and firm performance when the financial performance news is either positive or negative. Conducting a 2 x 2 between-participants experiment with 470 participants from Amazon Mechanical Turk (M-Turk), I find that when the news is positive, nonprofessional investors have more positive impressions of management, which, in turn, leads to more positive impressions of firm performance when the graphical presentation is vivid versus pallid. In contrast, when the news is negative, presenting graphs vividly has little effect on nonprofessional investors' impressions. A supplemental experiment shows that the positive effect of graphical vividness is present when the news is neutral, but the effect is crowded out when the news is negative. The study contributes to the regulators and practice by demonstrating that allowing a high degree of presentation flexibility in digital annual reports has behavioral outcomes to nonprofessional investors' judgments and decisions. The study also contributes to the strategic disclosure literature by demonstrating the impact of graphical vividness in presenting financial performance information.
We investigate the impact of social media messages on nonprofessional investors' assessments of management credibility and firm value. In a between-participants experiment, we examine the joint effect of social media message vividness, valence, and micro-blogger influence on nonprofessional investors' assessments of management credibility and firm value. We find that when social media messages are pallid and negative (positive), high micro-blogger influence decreases (increases) nonprofessional investors' assessments of management credibility. In contrast, the effect is absent when messages are vivid. Further, we find that the effect of micro-blogger influence on nonprofessional investors' assessments of blogger credibility and management credibility is mediated by social media interactions. The assessment of management credibility, in turn, significantly impacts nonprofessional investors' firm valuation assessment. The results have implications for regulators (SEC 2013) that may wish to update their guidance to managers on how to monitor or even control nonprofessional investors' interaction on social media platforms. Data Availability: Contact the authors.
This article presents three exercises that introduce the applications of robotic process automation (RPA) for accounting tasks. The objective of these exercises is to provide undergraduate accounting students with an introduction to RPA with hands-on practice during class time. The three exercises cover a wide range of RPA applications, including logging into an ERP system, extracting data from the Internet, and entering information from Excel to PDF. We have developed three hands-on, step-by-step exercises using UiPath as the software of choice. We also provide guidance and teaching notes regarding how to implement the three exercises in an undergraduate accounting information systems (AIS) course.
Regulators have expressed concerns over management's ability to maintain effective ICFR when adopting cloud-computing services (PCAOB 2015), as well as the auditor's ability to cope with such changes (PCAOB 2015, 2017). Further, the complexity of the client's accounting concepts, proxied by their XBRL taxonomy, could adversely impact financial reporting quality. We investigate the association between a firm's disclosure of cloud-computing risks and its likelihood of disclosing a material weakness, moderated by its level of accounting reporting complexity. We find that, for firms that identify cloud-computing as a significant risk, the external auditor is less likely to issue a material weakness when the firm uses a greater number of customized XBRL tags. We also find that the external auditor is more likely to issue a material weakness for firms that do not identify cloud-computing as a significant risk to their operations when they use a greater number of customized XBRL tags. Data Availability: Data are publicly available from sources identified in the paper.
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