The “not documented, not done” requirements of PCAOB Auditing Standard 3 substantially increased auditors’ obligations to document their risk assessments. This study examines a potentially unintended consequence of such a requirement on auditors who have pressure to reach lenient,...

Auditors face the challenging tasks of attesting that the financial statements are free from material misstatement while simultaneously fostering a functional working relationship with the client. As the financial statements may be considered, in part, a product of negotiations between the...

This paper reports the results of experimental economic markets that examine whether accounting uncertainty impacts an auditor's objectivity in a setting where the auditor also has an incentive to build and maintain a reputation for objectivity. In particular, we explore if an auditor's...

Under the assumption that audit quality relates positively to unobservable financial reporting reliability, we investigate whether audit quality is associated with the predictability of accounting earnings by focusing on analyst earnings forecast properties. The evidence shows that analysts'...

Under the assumption that audit quality relates positively to unobservable financial reporting reliability, we investigate whether audit quality is associated with the predictability of accounting earnings by focusing on analyst earnings forecast properties. The evidence shows that analysts'...

This study investigates how formal control systems and the behavior of peers influence behavior in accounting settings. We manipulate formal controls and peer behavior (social norms) in a laboratory experiment, allowing us to precisely investigate the interactive effect of these two factors on...

Business trends show that more and more employees are creating shadow IT systems — IT systems that are not sanctioned or monitored by the IT department. This paper examines how the use of shadow IT in product costing impacts managers’ perceptions of information credibility and managerial...

Amazon.com’s Mechanical Turk (MTurk) is becoming a major outlet for social science research. Despite an increasing number of researchers using MTurk, this system was not designed for carrying out behavioral research. Thus, researchers using MTurk must overcome the inherent limitations of the...

This paper reports the results of four laboratory experiments designed to examine whether an appropriate legal system, which is a combination of legal regime (strict vs. negligence) and damage apportionment rule (joint-and-several vs. proportionate), may serve as an effective mechanism to...

Prior studies that examine the application of neural networks in auditing investigate the efficiency of artificial neural networks (ANNs). In the present study, considering the well known disadvantages of artificial neural network, we propose the application of probabilistic neural networks...