Nonprofessional investors' perceptions of the incremental value of continuous auditing and continuous controls monitoring: An experimental investigation

Farkas, Maia; Murthy, Uday S.

doi:10.1016/j.accinf.2013.11.002

Cited by 26 publications

(8 citation statements)

References 22 publications

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“…Owens and Hawkins (2019) point out that "nonprofessional investor participants recruited from MTurk are reasonably good participants for nonprofessional investor research," and as such, may be used to answer a variety of research questions (p. 3). Hunt and Scheetz (2019) provide a list of other accounting studies that have also used MTurk to recruit non-professional investors, which includes Rennekamp (2012), Bonner 2014, Farkas and Murthy (2014), Triki et al (2015), and Kelton and Murthy (2016). Finally, Farrell et al (2016) find that MTurk participants can serve as valid proxies for non-experts in accounting research.…”

Section: Discussionmentioning

confidence: 99%

The influence of firm performance and (level of) assurance on the believability of management's environmental report

Sheldon¹,

Jenkins²

2020

AAAJ

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PurposeThis study empirically examines perceptions of environmental report believability based on a firm's relative performance and level of assurance obtained on environmental activities under the recently clarified and recodified attestation standards in the United States.Design/methodology/approachThe paper uses a 2 × 3 between-subjects experiment to identify differences in 153 non-expert environmental report users' perceptions of report believability based on positive or negative firm performance and (level of) assurance provided by an accounting firm.FindingsResults show a main effect in that negative performance reports are perceived to be more believable than positive performance reports, as driven by negative performance reports being significantly more believable when no assurance is present. The firm performance effect is eliminated once limited or reasonable assurance is provided. Further, positive performance reports with limited, but not reasonable, assurance are perceived to be more believable than reports without assurance. No differences are identified within the negative performance condition.Practical implicationsLimited assurance might be used as an impression management tool to enhance the believability of positive performance environmental reports. Users, practitioners, and standard-setters should also be aware that users might believe environmental reports are assured, even when no such assurance has been provided.Originality/valueThis paper examines the impact of assured environmental reporting on users that review firms' environmental reports outside of a shareholder/investor role. The study also demonstrates conditions in which firm performance and assurance impact perceptions of report believability.

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Section: Discussionmentioning

confidence: 99%

The influence of firm performance and (level of) assurance on the believability of management's environmental report

Sheldon¹,

Jenkins²

2020

AAAJ

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“…The consistent decline in fragmentation and increase in connectedness within the co-word network showed that the auditing discipline is becoming increasingly tight and cohesive (Kılıç et al, 2019;Varga, 2011 Advances in information technology, the rise of the real-time economy, and massive fraud scandals played a major role in the emergence of continuous auditing practices (Eulerich & Kalinichenko, 2018). Researchers have generally tended to study continuous auditing using XML-based accounting systems (Murthy & Groomer, 2004), in an internal auditing context (Gonzalez, Sharma, & Galletta, 2012), to determine whether it enhances financial reporting quality (Lee, Kang, Oh, & Pyo, 2014), to assess how to minimize the cost of continuous audit practices arising from the maintenance of a large dataset (Pathak, Chaouch, & Sriram, 2005;Pathak, Nkurunziza, & Ahmed, 2007), and to evaluate the incremental value of continuous auditing practice (Farkas & Murthy, 2014 ; the drivers of, and obstacles to, big data evolution in audits (Alles, 2015); the consequences of big data in accounting and auditing (Krahel & Titera, 2015); the impact of big data on audit evidence; and audit judgments and financial statement audits (Brown-Liburd, Issa, & Lombardi, 2015;Cao, Chychyla, & Stewart, 2015;Yoon, Hoogduin, & Zhang, 2015). It therefore seems to be a strong candidate for one of the future research avenues.…”

Section: Discussionmentioning

confidence: 99%

Exploring the conceptual structure of the auditing discipline through co‐word analysis: An international perspective

2019

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The purpose of this study was to explore the conceptual structure of the auditing discipline between 2000 and 2016, by synthesizing keywords cited in 2,119 articles published in 24 accounting and auditing journals, using co-word analysis and social network analysis (SNA). We aimed to highlight dominant, fading, and emerging themes in the discipline across the periods and across continents. The main outputs of this study can be summarized as follows. The consistent decline in fragmentation, and the increase in connectedness, within the SNA showed that the auditing discipline became an increasingly tight and more cohesive network. While the generic keywords auditing and auditor were used far less frequently in the final period of the study, the keywords audit quality, audit fees, internal control, financial reporting quality, and continuous auditing were increasingly cited across the study periods. Moreover, regional analyzes unveiled similarities and differences between territories.

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“…Accordingly, nonprofessional investors' perceptions and assessments of firm information have come under study recently (e.g., Maines and McDaniel 2000;Frederickson and Miller 2004;Dilla, Janvrin, and Jeffrey 2013;Farkas and Murthy 2014). Because professional and nonprofessional investors differ in investment expertise and use different valuation models and information processing (Maines and McDaniel 2000;Frederickson and Miller 2004), it is significant to study these investors separately.…”

Section: Experimental Designmentioning

confidence: 99%

Does Implementation of the Stewardship Code Affect Investors' Judgment and Decision-Making on Firm's Negative Information?

Shim¹

2020

Preprint

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aims to enhance the quality of engagement between investors and companies to help improve long-term risk-adjusted returns to shareholders, and effective stewardship benefits companies, investors and the economy as a whole (Financial Reporting Council (hereafter, FRC) 2012). The Stewardship Code (hereafter, SC) of a country or organization provides the detailed principles and guidelines of effective stewardship by institutional investors. Under the SC, institutional investors such as asset management firms, banks, insurance companies and pension funds are required to discharge their fiduciary responsibilities faithfully by closely monitoring investee companies and engaging in shareholder activities in a proactive manner. First introduced in the United Kingdom (UK) in 2010, the SC or similar regulations have since spread worldwide (e.g.,

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Nonprofessional investors' perceptions of the incremental value of continuous auditing and continuous controls monitoring: An experimental investigation

Cited by 26 publications

References 22 publications

The influence of firm performance and (level of) assurance on the believability of management's environmental report

The influence of firm performance and (level of) assurance on the believability of management's environmental report

Exploring the conceptual structure of the auditing discipline through co‐word analysis: An international perspective

Does Implementation of the Stewardship Code Affect Investors' Judgment and Decision-Making on Firm's Negative Information?

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