We investigate whether corporations are following the “best disclosure practices” when presenting... more We investigate whether corporations are following the “best disclosure practices” when presenting business reports on their Web sites. As a benchmark, we use the recommendations made by the Jenkins Committee (1994) to evaluate disclosures on corporate Web sites for value, relevance, and quality of information. We compute a disclosure score using 26 items recommended by the Jenkins Committee and Meek, Roberts, and Gray (1995) as indicators of best reporting practices. Our findings reveal that most corporations do not follow “best disclosure practices” when reporting information on their Web sites. Only about half of the 26 disclosure items recommended by the Jenkins Committee are reported, and less than 50% of the sample firms in our study make such disclosure. Some of the items that the Jenkins Committee recommends as essential for improving quality and relevance of reporting, such as forward-looking information (e.g., plans, opportunities and risks, forecasts, critical success factors), nonfinancial items (e.g., changes in operating performance, research and development activities), or offbalance-sheet financing, are least often reported. The findings suggest that corporations must improve their Web site disclosures for investors to find them valuable, relevant, and useful.
Databases and online systems have dramatically changed the way businesses transact and maintain r... more Databases and online systems have dramatically changed the way businesses transact and maintain records. The database-supported transaction systems enable businesses to conduct their businesses electronically, leading to quicker exchange of information on products and sales. With databases supplying information and online systems providing processing capabilities, businesses can input and process transactions as they occur. In turn, this facilitates quicker retrieval, classification, and reporting of activities. Unlike in the past where reports were generated several months after events and transactions took place, today businesses can provide financial statements and other reports instantaneously, enhancing their usefulness.
Advanced Topics in Information Resources Management, Volume 3
Page 43. Evidence from Financial Services Industry 29 Chapter II Information Systems Expenditures... more Page 43. Evidence from Financial Services Industry 29 Chapter II Information Systems Expenditures and Firm Value: Further Evidence from Financial Services Industry Ram S. Sriram, Georgia State University, USA Gopal V. Krishnan ...
The focus of this research is to demonstrate how probabilistic models may be used to provide earl... more The focus of this research is to demonstrate how probabilistic models may be used to provide early warnings for bank failures. While prior research in the auditing literature has recognized the applicability of a Bayesian belief revision framework for many audit tasks, empirical evidence has suggested that auditor's cognitive decision processes often violate probability axioms. This study demonstrates that a formal belief revision scheme can be incorporated into an automated system to provide reliable probability estimates for early warning of bank failures. The automated system will examine financial ratios as predictors of a bank's performance, and assess the posterior probability of a bank's financial health. The study examines two different probabilistic models, one that is simpler and makes more assumptions, while the other that is complex but makes fewer assumptions. Both models are able to make accurate predictions while the complex model is well-calibrated in its...
We demonstrated that knowledge structure training is eVective in imparting transaction Xow and co... more We demonstrated that knowledge structure training is eVective in imparting transaction Xow and control objective knowledge structures and that knowledge structure mediates the relationship between structure training and performance in internal control reviews. A performance degradation associated with participant-task structure incompatibility arose at the point of situation model building rather than during application of knowledge structure in the judgment task. Higher-knowledge structure participants, but not lower-knowledge structure participants, performed better when their knowledge structures and case structures were compatible.
Educators, practitioners and others have criticized the universities for not providing adequate c... more Educators, practitioners and others have criticized the universities for not providing adequate communication training to their accounting students. Gingras (1987) conducted a survey of CPAs concerning the importance and overage of written communication skills in business schools. This study compares the perceptions of educators and CPAs regarding the importance of written communication skills to a CPA, the coverage of written communication skills in the accounting curriculum and the relative importance of a list of writing activities performed by a CPA. The focus groups include university professors, and staff assistants, senior, managers and partners of public accounting firms. The responses analyzed using the ANOVA technique, indicate that coverage of communication skills is relatively low and most accounting students take only one writing course in their college curriculum. Educators and practitioners recommend general writing related courses as the appropriate instruction in th...
Review of Business Information Systems (RBIS), 2011
Prior research has concentrated on either the conventional skills of forensic auditing or the imp... more Prior research has concentrated on either the conventional skills of forensic auditing or the impact of information technology on accounting. Little has been attempted by way of synthesizing these two areas; i.e., identifying specialized skills required of the forensic auditor operating in an EDP environment. This article focuses on a sub-category of forensic auditing, litigation services, as a first step toward achieving such a synthesis. First, the unique characteristics of the EDP environment and their affect on the nature of fraud are examined. Second, the skills of conventional litigation experts are analyzed to see whether they are adequate for practice in the EDP environment. Third, it is found that several new skills are required for the litigation expert to operate effectively against computer-aided crime. Finally, the new and convention skills are combined into a more comprehensive framework.
Review of Business Information Systems (RBIS), 2011
The ability to communicate in writing and orally is essential for the entry-level accountant. The... more The ability to communicate in writing and orally is essential for the entry-level accountant. The Master Plan described in this article has been found to be effective in improving the students' oral and written communication skills. After the communication integration plan had been in place for a number of years, a comparison of responses from pre-integration and post-integration graduates revealed that post-integration respondents were more satisfied with the amount of communication coverage in the accounting curriculum than the pre-integration respondents. In addition, a large majority of both pre- and post-integration respondents believe it would have been advantageous to have had a greater emphasis on oral and written communications and would advise others to take more accounting courses that include oral presentations.
This article examines certain client specific attributes of a group firms to ascertain whether so... more This article examines certain client specific attributes of a group firms to ascertain whether some of these attributes are more closely associated with firms switching auditors. The results indicate that firms receiving a qualified opinion and small firms and those listed in over the trading counter to be more likely to change auditors. Firms audited by bigger audit firms appear to be less likely to switch auditors.
ABSTRACT This study compares the financial distress classification accuracy of two traditional an... more ABSTRACT This study compares the financial distress classification accuracy of two traditional analytical techniques for evaluating financial distress models: logit analysis and multiple discriminant analysis (MDA) to the less restrictive and non-parametric computer-aided techniques, Artificial Neural Networks (ANNs). The study evaluates the techniques both for their overall classification accuracy and type I and type II misclassification rates. Five different ANNs were used because of their suitability for classification-type problems. The techniques were tested on select financial ratios on four areas of a bank's financial performance on 994 financially healthy and 145 financially distressed banks. The results indicated that logit and MDA to have lower overall error rates than ANNs. However, when the relative costs of misclassification were compared, ANNs, in general, performed better than logit and MDA.
The SEG Research Committee held its 1989 summer workshop on recording and processing vector wave ... more The SEG Research Committee held its 1989 summer workshop on recording and processing vector wave field data August 1317, 1989, in Snowbird, Utah. The workshop title proved puzzling to some, so a word of explanation may be in order. Seismic wave motion, although ...
In this study, using the recent Y2-compliance expenditures as an example, we examine whether disc... more In this study, using the recent Y2-compliance expenditures as an example, we examine whether disclosures relating to investments in information technology (IT) were relevant to investors in assessing the market value of equity. We use a sample of 190 firms that disclosed estimates of total Y2K-compliance costs in their 1997 annual reports to examine the association between Y2K-compliance costs and share prices. We test the joint hypothesis that Y2K-compliance costs were relevant to equity valuation of firms that chose to become Y2K-compliant and that these costs were sufficiently reliable to be reflected in share prices. We find that estimates of Y2K-compliance costs were positively and significantly related to share prices after controlling for earnings, book value of equity, and other factors. We find that the stock market is not shortsighted, and consider investments in Y2K-remediation efforts a significant and value-increasing activity for the average firm.
In recent years, Electronic Data Interchange (EDI) has revolutionized the way in which businesses... more In recent years, Electronic Data Interchange (EDI) has revolutionized the way in which businesses conduct their trading activities. Even though the popularity and potential attached to EDI is growing rapidly, knowledge regarding the nature of EDI benefits and EDI control practices is very limited. This paper reports the results of a survey of EDI users that explores these key implementation issues. This study focuses on organizational factors that are associated with EDI adoption and implementation. Findings indicate that organizations experience both operational and strategic benefits from EDI. Customer-initiated EDI users recognized slightly greater EDI strategic benefits than did other users. Also, long-time users recognized both strategic and operational benefits in greater proportions than did more recent users, and smaller firms more often cited better customer service and convenience (as strategic and operational benefits, respectively) from implementing EDI. An examination o...
The focus of this research is to demonstrate how probabilistic models may be used to pro-vide ear... more The focus of this research is to demonstrate how probabilistic models may be used to pro-vide early warnings for bank failures. While prior research in the auditing literature has recognized the applicability of a Bayesian belief revision framework for many audit tasks, empirical ...
... A classic example of strategic cost analysis is provided by Shank and Govindarajan in their a... more ... A classic example of strategic cost analysis is provided by Shank and Govindarajan in their analysis of Baldwin Bicycle Company.2= Baldwin Bicycle, a manufacturer of bicycles receives an offer from Hi-Valu to produce bicycles for Hi-Valu. ...
We investigate whether corporations are following the “best disclosure practices” when presenting... more We investigate whether corporations are following the “best disclosure practices” when presenting business reports on their Web sites. As a benchmark, we use the recommendations made by the Jenkins Committee (1994) to evaluate disclosures on corporate Web sites for value, relevance, and quality of information. We compute a disclosure score using 26 items recommended by the Jenkins Committee and Meek, Roberts, and Gray (1995) as indicators of best reporting practices. Our findings reveal that most corporations do not follow “best disclosure practices” when reporting information on their Web sites. Only about half of the 26 disclosure items recommended by the Jenkins Committee are reported, and less than 50% of the sample firms in our study make such disclosure. Some of the items that the Jenkins Committee recommends as essential for improving quality and relevance of reporting, such as forward-looking information (e.g., plans, opportunities and risks, forecasts, critical success factors), nonfinancial items (e.g., changes in operating performance, research and development activities), or offbalance-sheet financing, are least often reported. The findings suggest that corporations must improve their Web site disclosures for investors to find them valuable, relevant, and useful.
Databases and online systems have dramatically changed the way businesses transact and maintain r... more Databases and online systems have dramatically changed the way businesses transact and maintain records. The database-supported transaction systems enable businesses to conduct their businesses electronically, leading to quicker exchange of information on products and sales. With databases supplying information and online systems providing processing capabilities, businesses can input and process transactions as they occur. In turn, this facilitates quicker retrieval, classification, and reporting of activities. Unlike in the past where reports were generated several months after events and transactions took place, today businesses can provide financial statements and other reports instantaneously, enhancing their usefulness.
Advanced Topics in Information Resources Management, Volume 3
Page 43. Evidence from Financial Services Industry 29 Chapter II Information Systems Expenditures... more Page 43. Evidence from Financial Services Industry 29 Chapter II Information Systems Expenditures and Firm Value: Further Evidence from Financial Services Industry Ram S. Sriram, Georgia State University, USA Gopal V. Krishnan ...
The focus of this research is to demonstrate how probabilistic models may be used to provide earl... more The focus of this research is to demonstrate how probabilistic models may be used to provide early warnings for bank failures. While prior research in the auditing literature has recognized the applicability of a Bayesian belief revision framework for many audit tasks, empirical evidence has suggested that auditor's cognitive decision processes often violate probability axioms. This study demonstrates that a formal belief revision scheme can be incorporated into an automated system to provide reliable probability estimates for early warning of bank failures. The automated system will examine financial ratios as predictors of a bank's performance, and assess the posterior probability of a bank's financial health. The study examines two different probabilistic models, one that is simpler and makes more assumptions, while the other that is complex but makes fewer assumptions. Both models are able to make accurate predictions while the complex model is well-calibrated in its...
We demonstrated that knowledge structure training is eVective in imparting transaction Xow and co... more We demonstrated that knowledge structure training is eVective in imparting transaction Xow and control objective knowledge structures and that knowledge structure mediates the relationship between structure training and performance in internal control reviews. A performance degradation associated with participant-task structure incompatibility arose at the point of situation model building rather than during application of knowledge structure in the judgment task. Higher-knowledge structure participants, but not lower-knowledge structure participants, performed better when their knowledge structures and case structures were compatible.
Educators, practitioners and others have criticized the universities for not providing adequate c... more Educators, practitioners and others have criticized the universities for not providing adequate communication training to their accounting students. Gingras (1987) conducted a survey of CPAs concerning the importance and overage of written communication skills in business schools. This study compares the perceptions of educators and CPAs regarding the importance of written communication skills to a CPA, the coverage of written communication skills in the accounting curriculum and the relative importance of a list of writing activities performed by a CPA. The focus groups include university professors, and staff assistants, senior, managers and partners of public accounting firms. The responses analyzed using the ANOVA technique, indicate that coverage of communication skills is relatively low and most accounting students take only one writing course in their college curriculum. Educators and practitioners recommend general writing related courses as the appropriate instruction in th...
Review of Business Information Systems (RBIS), 2011
Prior research has concentrated on either the conventional skills of forensic auditing or the imp... more Prior research has concentrated on either the conventional skills of forensic auditing or the impact of information technology on accounting. Little has been attempted by way of synthesizing these two areas; i.e., identifying specialized skills required of the forensic auditor operating in an EDP environment. This article focuses on a sub-category of forensic auditing, litigation services, as a first step toward achieving such a synthesis. First, the unique characteristics of the EDP environment and their affect on the nature of fraud are examined. Second, the skills of conventional litigation experts are analyzed to see whether they are adequate for practice in the EDP environment. Third, it is found that several new skills are required for the litigation expert to operate effectively against computer-aided crime. Finally, the new and convention skills are combined into a more comprehensive framework.
Review of Business Information Systems (RBIS), 2011
The ability to communicate in writing and orally is essential for the entry-level accountant. The... more The ability to communicate in writing and orally is essential for the entry-level accountant. The Master Plan described in this article has been found to be effective in improving the students' oral and written communication skills. After the communication integration plan had been in place for a number of years, a comparison of responses from pre-integration and post-integration graduates revealed that post-integration respondents were more satisfied with the amount of communication coverage in the accounting curriculum than the pre-integration respondents. In addition, a large majority of both pre- and post-integration respondents believe it would have been advantageous to have had a greater emphasis on oral and written communications and would advise others to take more accounting courses that include oral presentations.
This article examines certain client specific attributes of a group firms to ascertain whether so... more This article examines certain client specific attributes of a group firms to ascertain whether some of these attributes are more closely associated with firms switching auditors. The results indicate that firms receiving a qualified opinion and small firms and those listed in over the trading counter to be more likely to change auditors. Firms audited by bigger audit firms appear to be less likely to switch auditors.
ABSTRACT This study compares the financial distress classification accuracy of two traditional an... more ABSTRACT This study compares the financial distress classification accuracy of two traditional analytical techniques for evaluating financial distress models: logit analysis and multiple discriminant analysis (MDA) to the less restrictive and non-parametric computer-aided techniques, Artificial Neural Networks (ANNs). The study evaluates the techniques both for their overall classification accuracy and type I and type II misclassification rates. Five different ANNs were used because of their suitability for classification-type problems. The techniques were tested on select financial ratios on four areas of a bank's financial performance on 994 financially healthy and 145 financially distressed banks. The results indicated that logit and MDA to have lower overall error rates than ANNs. However, when the relative costs of misclassification were compared, ANNs, in general, performed better than logit and MDA.
The SEG Research Committee held its 1989 summer workshop on recording and processing vector wave ... more The SEG Research Committee held its 1989 summer workshop on recording and processing vector wave field data August 1317, 1989, in Snowbird, Utah. The workshop title proved puzzling to some, so a word of explanation may be in order. Seismic wave motion, although ...
In this study, using the recent Y2-compliance expenditures as an example, we examine whether disc... more In this study, using the recent Y2-compliance expenditures as an example, we examine whether disclosures relating to investments in information technology (IT) were relevant to investors in assessing the market value of equity. We use a sample of 190 firms that disclosed estimates of total Y2K-compliance costs in their 1997 annual reports to examine the association between Y2K-compliance costs and share prices. We test the joint hypothesis that Y2K-compliance costs were relevant to equity valuation of firms that chose to become Y2K-compliant and that these costs were sufficiently reliable to be reflected in share prices. We find that estimates of Y2K-compliance costs were positively and significantly related to share prices after controlling for earnings, book value of equity, and other factors. We find that the stock market is not shortsighted, and consider investments in Y2K-remediation efforts a significant and value-increasing activity for the average firm.
In recent years, Electronic Data Interchange (EDI) has revolutionized the way in which businesses... more In recent years, Electronic Data Interchange (EDI) has revolutionized the way in which businesses conduct their trading activities. Even though the popularity and potential attached to EDI is growing rapidly, knowledge regarding the nature of EDI benefits and EDI control practices is very limited. This paper reports the results of a survey of EDI users that explores these key implementation issues. This study focuses on organizational factors that are associated with EDI adoption and implementation. Findings indicate that organizations experience both operational and strategic benefits from EDI. Customer-initiated EDI users recognized slightly greater EDI strategic benefits than did other users. Also, long-time users recognized both strategic and operational benefits in greater proportions than did more recent users, and smaller firms more often cited better customer service and convenience (as strategic and operational benefits, respectively) from implementing EDI. An examination o...
The focus of this research is to demonstrate how probabilistic models may be used to pro-vide ear... more The focus of this research is to demonstrate how probabilistic models may be used to pro-vide early warnings for bank failures. While prior research in the auditing literature has recognized the applicability of a Bayesian belief revision framework for many audit tasks, empirical ...
... A classic example of strategic cost analysis is provided by Shank and Govindarajan in their a... more ... A classic example of strategic cost analysis is provided by Shank and Govindarajan in their analysis of Baldwin Bicycle Company.2= Baldwin Bicycle, a manufacturer of bicycles receives an offer from Hi-Valu to produce bicycles for Hi-Valu. ...
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