Management Bias Across Multiple Accounting Estimates PDF Download
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| Author | : Timothy A. Seidel |
| Publisher | : |
| Total Pages | : 69 |
| Release | : 2019 |
| Genre | : |
| ISBN | : |
Download Management Bias Across Multiple Accounting Estimates Book in PDF, ePub and Kindle
We examine whether managers appear to aggregate bias in multiple subjective accrual estimates to meet or just beat analyst expectations. We also consider whether the updated language in recent PCAOB auditing standards, focusing auditors on the potential for bias across multiple estimates, impacted this method of managing earnings. Using hand-collected data from a sample of manufacturing firms, we find that meeting or just beating the most recent consensus analyst earnings forecast is positively associated with income-increasing bias aggregated from multiple accounting estimates. We also find that this relation attenuates in the years following the issuance of PCAOB auditing standards focusing auditors on this issue. Further analyses reveal that after these standards were released, firms increased the use of income-increasing, unexpected non-GAAP exclusions to meet or just beat expectations, an alternative technique subject to less auditor scrutiny. Additionally, firms using bias from multiple accounting estimates after the updated guidance in these PCAOB standards do so using bias spread in smaller amounts across more individual estimates. These findings provide important insight into how managers use accruals to meet or just beat an important benchmark as well as the impact of PCAOB auditing standard updates on this earnings management practice.
| Author | : Matthew J. Hayes |
| Publisher | : |
| Total Pages | : 45 |
| Release | : 2016 |
| Genre | : Auditing |
| ISBN | : |
Download Anchoring and Motivated Reasoning in Managers' Review of Accounting Estimates Book in PDF, ePub and Kindle
Accounting estimates are developed in a bottom-up fashion; subordinates generate estimates that are reviewed by managers. The anchoring heuristic suggests managers may be highly influenced by subordinates initial estimates. However, motivated reasoning theory predicts that reporting incentives will bias managers review in favor of estimates that are incentive consistent, and managers will selectively attend to information that supports their preferred conclusion, including their perceptions of the subordinate. Using experimental methods I manipulate the consistency of the subordinate estimate with management reporting incentives, and the narcissistic description of the subordinate. Consistent with motivated reasoning theory, I find that managers anchor on incentive consistent subordinate estimates, regardless of subordinate narcissism, but anchor less on incentive inconsistent subordinate estimates, especially when the estimate comes from a narcissistic subordinate. I also find evidence that managers believe narcissistic subordinates act strategically in their own self-interest, and selectively attend to this belief to adjust away from incentive inconsistent subordinate estimates, but not incentive consistent subordinate estimate. My results reveal two potential weaknesses in the management review process: susceptibility to subordinate anchors, and bias created by reporting incentives.
| Author | : |
| Publisher | : |
| Total Pages | : |
| Release | : 2005 |
| Genre | : |
| ISBN | : |
Download Determinants of Error Attribution in Accounting Estimates Book in PDF, ePub and Kindle
| Author | : Joanne M. Flood |
| Publisher | : John Wiley & Sons |
| Total Pages | : 1560 |
| Release | : 2012-12-18 |
| Genre | : Study Aids |
| ISBN | : 1118421450 |
Download Wiley Practitioner's Guide to GAAS 2013 Book in PDF, ePub and Kindle
The clearest, easiest-to-use guide to understanding GAAS 2013 on the market—fully updated This latest resource to understanding GAAS addresses the toughest part of the job—identifying, interpreting, and applying the many audit, attest, review, and compilation standards relevant to a particular engagement. The only GAAS reference organized according to practitioners' actual use of the Statements on Auditing Standards (SASs), inside you'll find examples and illustrations for testing internal controls, techniques for remaining compliant with each standard, and explanations of the reasons for each pronounceument. A brief identification of each SAS, SSAE, and SSARS, with its effective date and tips on when to apply it A convenient and comprehensive glossary of official definitions, which are usually scattered throughout a standard Behind-the-scenes explanations of the reasons for each pronouncement and brief explanations of the basic ideas of the section Concise listing and descriptions of each standard's specific mandate Easy-to-read capsule summary of interpretations, plus selected AICPA practice alerts and advisories Helpful techniques for remaining compliant with each standard Examples and illustrations for testing internal controls Wiley Practitioner's Guide to GAAS 2013 presents each statement individually, explaining how the standards are related and offering guidance on the entire engagement process in the form of practice notes, checklists, questionnaires, and real-world examples that illustrate how the fundamental requirements of each section are applied.
| Author | : AICPA |
| Publisher | : John Wiley & Sons |
| Total Pages | : 1776 |
| Release | : 2019-03-26 |
| Genre | : Business & Economics |
| ISBN | : 1948306530 |
Download PCAOB Standards and Related Rules Book in PDF, ePub and Kindle
Auditors of public companies opinions of the accuracy of a financial statement matters for the health of the company are important. This title is a must-have for practitioners, it includes updated staff guidance related to Changes to the Auditor’s Report Effective for Audits of Fiscal Years Ending on or After December 15, 2017. This guide will ensure that the audit staffs' audit reports resonate with investors, lenders, regulatory authorities and other financial statement users.
| Author | : AICPA |
| Publisher | : John Wiley & Sons |
| Total Pages | : 1840 |
| Release | : 2020-03-10 |
| Genre | : Business & Economics |
| ISBN | : 1950688046 |
Download PCAOB Standards and Related Rules: 2019 Book in PDF, ePub and Kindle
Auditors of public companies’ opinions of the accuracy of a financial statement matters for the health of the company are important. This title is a must-have for practitioners, it includes two new auditing standards: Auditing Accounting Estimates, Including Fair Value Measurements (AS 2501) and Using the Work of an Auditor-Engaged Specialist (AS 1210) This guides also includes related amendments to other auditing sections, recently issued staff guidance on these topics, and staff guidance on critical audit matters.
| Author | : Joanne M. Flood |
| Publisher | : John Wiley & Sons |
| Total Pages | : 995 |
| Release | : 2015-02-17 |
| Genre | : Business & Economics |
| ISBN | : 1118979052 |
Download Wiley Practitioner's Guide to GAAS 2015 Book in PDF, ePub and Kindle
The all-in-one guide to the latest auditing standards, with clear explanations and more "Wiley Practitioner's Guide to GAAS 2015" offers the most comprehensive coverage of auditing standards, practices, and procedures, clarifying complex guidelines in clear, easy-to-understand language. Each statement is presented individually with explanations and practice notes that highlight main ideas and mandates, giving practitioners a clearer understanding of SAS standards and how they're used. Practical illustrations, checklists and questionnaires guide readers through the auditing process, and updates are highlighted to call attention to recent changes. This useful guide includes background information that sheds light on the reasoning behind each pronouncement, as well as a comprehensive glossary that clarifies unfamiliar or nuanced terms. Coverage also includes interpretations of all new Statements on Standards for Accounting and Review Services Compilation and Review statements, with expert advice on remaining compliant as guidelines change. Auditing standards guide the work of an entire industry, but these standards are frequently revised, and compliance is critical. "Wiley Practitioner's Guide to GAAS 2015" is a complete reference for the auditing professional, logically organized to allow for quick navigation.Understand the real-world application of each standardLearn each standard's effective date and specific mandatesExamine technical alerts, definitions, and interpretationsDevelop techniques for maintaining compliance Identifying, interpreting, and applying the many standards relevant to a particular engagement can be the most difficult part of the auditor's job. This guide simplifies the process by combining the standards, explanations, tools, and expert advice into a single, easily navigated volume. For the auditor who needs to be up to date, "Wiley Practitioner's Guide to GAAS 2015" provides the latest on GAAS compliance.
| Author | : Joanne M. Flood |
| Publisher | : John Wiley & Sons |
| Total Pages | : 1403 |
| Release | : 2018-03-13 |
| Genre | : Business & Economics |
| ISBN | : 1119396557 |
Download Wiley Practitioner's Guide to GAAS 2018 Book in PDF, ePub and Kindle
The clearest, easiest-to-use guide to understanding all the clarified standards, including the new attestation standards—fully updated! This comprehensive guide to understanding Generally Accepted Auditing Standards (GAAS) is not just about auditing. It addresses the toughest part of an accountant's job—identifying, interpreting, and applying the many audit, attest, review, compilation, and preparation standards relevant to a particular engagement. Wiley Practitioner's Guide to GAAS 2018 offers a clear and accessible distillation of the official language of GAAS, Statements on Standards for Attestation Engagements (SSAEs), and Statements on Standards for Accounting and Review Services (SSARSs)—as well as advice on exactly how to remain fully compliant with each. Wiley Practitioner's Guide to GAAS 2018 is organized according to the logical arrangement of the clarified standards, presenting each section individually, and explaining how it is related to the engagement process. Guidance is offered on the entire process, in the form of practice notes, checklists, questionnaires, and real-world examples, illustrating how the fundamental requirements of each section are applied. Other key features include: A brief identification of each auditing, SSAE, and SSARS section, with effective dates and tips on how to apply it Highlights of new requirements in the clarified attestation standards Concise listing and descriptions of each section's specific mandates, including definitions Easy-to-read capsule summary of interpretations, plus selected technical alerts Helpful techniques for remaining compliant with each standard
| Author | : Jenny Wu Tucker |
| Publisher | : |
| Total Pages | : 37 |
| Release | : 2019 |
| Genre | : |
| ISBN | : |
Download Selection Bias and Econometric Remedies in Accounting and Finance Research Book in PDF, ePub and Kindle
While managers' accounting and financial decisions are, for many, fascinating topics, selection bias poses a serious challenge to researchers estimating the decisions' effects using non-experimental data. Selection bias potentially occurs because managers' decisions are non-random and the outcomes of choices not made are never observable. “Selection bias due to observables” arises from sample differences that researchers can observe but fail to control. “Selection bias due to unobservables” arises from the unobservable and thus uncontrolled sample differences that affect managers' decisions and their consequences. In this article I review two econometric tools developed to mitigate these biases - the propensity score matching (PSM) method to mitigate selection bias due to observables and the Heckman inverse-Mills-ratio (IMR) method to address selection bias due to unobservables - and discuss their applications in accounting and finance research. The article has four takeaways. First, researchers should select the correct method to alleviate potential selection bias: the PSM method mitigates selection bias due to observables, but does not alleviate selection bias due to unobservables. Second, in applying PSM researchers are advised to restrict their inferences to firms whose characteristics can be found in both the sample and control groups. Third, the IMR method, though popular, is limited to situations in which the choices are binary, the outcomes of choices are modeled in a linear regression, and the unobservables in the choice and outcome models follow a multivariate normal distribution. Researchers can overcome these constraints by using full information maximum likelihood estimation. Last, when the IMR method is used, special attention should be paid to the formulas in calculating IMRs. The article also calls for researchers' attention to other approaches to evaluating the effects of managers' decisions.
| Author | : Bruce J. McConomy |
| Publisher | : |
| Total Pages | : |
| Release | : 2000 |
| Genre | : |
| ISBN | : |
Download Bias and Accuracy of Management Earnings Forecasts Book in PDF, ePub and Kindle
This paper assesses how the bias and accuracy of managers' earnings forecasts in prospectuses were affected by a 1989 regulation that required the forecasts to be audited by public accountants. Theory suggests that auditors' association with the forecasts would reduce positive (optimistic) bias, by reducing moral hazard. Regulators expected that the audit requirement would also improve the accuracy of the forecasts. Both predictions were tested using management earnings forecasts disclosed in prospectuses of Canadian initial public offerings. The results show that audited forecasts contained significantly less positive bias than reviewed forecasts, but there was only a marginally significant improvement in accuracy.Key Words: Initial public offering; Bias; Earnings forecast.
