Template-Type: ReDIF-Article 1.0 Author-Name: Stephanie Monteiro Miller Author-Name: Aamer Sheikh Title: NEW EVIDENCE ON THE SUBSTITUTION BETWEEN ACCRUAL EARNINGS MANAGEMENT AND REAL EARNINGS MANAGEMENT IN UNITED STATES FIRMS Abstract: This paper provides new evidence on the relation between accumulated accrual earnings management (AEM) and current real earnings management (REM) using new, more intuitive measures. It also investigates the time-series properties of REM and constructs a meaningful measure of accumulated REM to explore the relation between accumulated REM and current AEM. The results show that REM, like AEM, tends to reverse over time, and that while constraints on the ability to use AEM are associated with a shift toward REM, constraints on the ability to use REM are not associated with a shift toward AEM. Classification-JEL: M40, M41 Keywords: Earnings Management, Discretionary Accruals, Real Earnings Management Journal: Accounting & Taxation Pages: 1-14 Volume: 15 Issue: 2 Year: 2023 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v15n2-2023/AT-V15N2-2023-1.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:15:y:2023:i:1:p:1-14 Template-Type: ReDIF-Article 1.0 Author-Name: Arianna Pinello Author-Name: Ara Volkan Author-Name: Adam McCord Title: STATEMENT ON AUDITING STANDARDS 145: WAS STAKEHOLDER FEEDBACK INCORPORATED IN THE FINAL STANDARD? Abstract: Understanding the entity’s environment and assessing the risk of material misstatement are fundamentalcomponents of the audit planning process that have been found deficient by regulators, peer reviews, and research studies. In 2020, the Auditing Standards Board of the American Institute of Certified Public Accountants issued an exposure draft of a Statement on Auditing Standards to clarify and enhance the requirements for auditors to understand an entity’s system of internal controls and determine the risk of material misstatement. In addition, the proposal modernized the existing audit requirements regarding information technology use and addressing risks arising from such use. This paper analyzes the comment letters submitted to the Auditing Standards Board to assess the degree of stakeholder agreement with the proposed requirements. Next, the language of the exposure draft is compared to the text of the final standard to determine the degree of standard setters’ responsiveness to the feedback they received during the standard-setting process. The analyses suggest general acceptance by respondents, with requests that additional clarifications be provided. The final text of the standard indicates that the standard setters agreed with respondent suggestions. While the final SAS is well received and achieves its aims, further clarification and guidance will be needed for its efficient and effective implementation. Classification-JEL:M42 Keywords: SAS No. 145, AICPA, Entity Environment, Risk Assessment, Material Misstatement, Audit Standards Journal: Accounting & Taxation Pages: 15-29 Volume: 15 Issue: 2 Year: 2023 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v15n2-2023/AT-V15N2-2023-2.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:15:y:2023:i:1:p:15-29 Template-Type: ReDIF-Article 1.0 Author-Name: Ashley Gangloff Author-Name: Karen Schnatterly Author-Name: Neal M. Snow Author-Name: Patrick Wheeler Author-Name: James Whitworth Title: THE ROLE OF VOLUNTARILY DISCLOSED INFORMATION ON CROWDFUNDING SUCCESS: EVIDENCE FROM KICKSTARTER Abstract: Information crowdfunding discloses deviates from mainstream business disclosures in several important ways. In this study, we examine one aspect of this information phenomenon, i.e., the textual, nonmonetary, nonfinancial content of voluntary crowdfunding disclosures. We build on literature on voluntary disclosure, crowdfunding, and content analysis by examining how voluntary disclosure impacts funding success on one of the most successful crowdfunding websites, Kickstarter. Using a large sample of over two years of projects (102,967 projects), we find that the volume and content of voluntary disclosure impact funding success, and that those main effects differ based on discloser credibility and market competition in ways consistent with prior voluntary disclosure literature. Our results have implications for crowdfunding and regulators by providing new insight into crowdfunding stakeholder decision-making. Classification-JEL: M41, M48, M13, G29 Keywords: Agency Theory, Crowdfunding, Content Analysis, Voluntary Disclosure Journal: Accounting & Taxation Pages: 31-54 Volume: 15 Issue: 2 Year: 2023 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v15n2-2023/AT-V15N2-2023-3.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:15:y:2023:i:1:p:31-54 Template-Type: ReDIF-Article 1.0 Author-Name:Terrance Jalbert Title: STRATEGIES FOR PUBLISHING IN PEER-REVIEWED JOURNALS: A PATH FOR CAREER SUCCESS Abstract: Professors face relentless pressure to publish while simultaneously meeting teaching and service demands. This paper provides career guidance on balancing these activities and provides one senior academic’s thoughts and experiences on strategies for publishing in peer-reviewed journals. Aspiring authors can use information provided here to improve their chances of publication and the quality of journal in which they publish. Seasoned authors can use information here to augment the tools in their research arsenal. Classification-JEL: A20, I23, I25, I26 Keywords: Peer-Reviewed Journals, Promotion, Tenure, Journal Quality, Research Partners Journal: Accounting & Taxation Pages:55-71 Volume: 15 Issue: 2 Year: 2023 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v15n2-2023/AT-V15N2-2023-4.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:15:y:2023:i:1:p:55-71 Template-Type: ReDIF-Article 1.0 Author-Name: Devon Baranek Author-Name: Nandini Chandar Author-Name: Sherry Li Title: WHAT WAS LACKING AT LUCKIN? A CASE STUDY OF ETHICS AND FRAUD IN A U.S. LISTED FOREIGN COMPANY Abstract: This case provides students an opportunity to analyze fraud and ethical issues in the context of global capital markets. Luckin Coffee, a China-based retail coffee chain, gained prominence with a record IPO in 2019 and fell into disrepute the next year as a major fraud was uncovered. An internal investigation revealed employees engaged in improper behaviors, including falsifying transactions data that led to gross overstatements in revenue for the first three quarters of 2019. Luckin was charged with issuing materially false registration statements and prospectuses for its IPO in 2019 and secondary offering in January 2020. The company was delisted and investigated by the SEC for the accounting fraud, settling for $180 million in December 2020. This is a multi-purpose case with an abbreviated version (Question Set A) appropriate for an introductory financial accounting course, and an extended version (including Question Set A and Question Set B) appropriate for an upper-level or graduate course in financial accounting or fraud/forensics. Prior classroom instruction on the navigation of the SEC’s Edgar database, the PCAOB and the U.S. regulatory framework, and Yahoo Finance or another stock price tracking website may be beneficial at the higher course levels. The case should be assigned as a group project due to its length and required level of analysis. Students at all levels should be given at least one full class period (60-90 minutes or more) to work on the case and an additional one to two weeks outside of class to complete the questions. Classroom discussion after the due date should be at least one hour. Classification-JEL:M40, M41 Keywords: Accounting Fraud, Ethics, Enforcement Action, Luckin Journal: Accounting & Taxation Pages: 73-89 Volume: 15 Issue: 2 Year: 2023 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v15n2-2023/AT-V15N2-2023-5.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:15:y:2023:i:1:p:73-89 Template-Type: ReDIF-Article 1.0 Author-Name: Daniel Acheampong Author-Name: Isaac Osei Agyemang Author-Name: Tanya S. Benford Author-Name: Judy Wynekoop Title: AUDITOR RATIFICATION, STOCK PRICES, AND AUDITOR CHANGE: A COMPARATIVE STUDY IN PUBLICLY TRADED COMPANIES Abstract: This study investigates the complicated relationships among auditor ratification, stock prices, and auditor change within publicly traded companies. We analyzed 44,398 observations spanning 2010 to 2023. We find that factors influencing auditor ratification include total shares outstanding, net income, audit benefits fees, and Russell 2000 index membership. Factors that affect stock prices include the total number of votes cast by shareholders, book value, and audit fees. This study also reveals that ratification year and audit benefits fees are related to auditor change. This study adds to the shareholder impact on corporate governance and stock price discussion. Classification-JEL: M42, M48, M49 Keywords: Auditor change, Auditor Ratification, Audit-related outcomes, Investor Confidence, Ratification Year, Russell 2000 Index, Shareholder Perceptions, Shareholder Voting Journal: Accounting & Taxation Pages: 93-104 Volume: 15 Issue: 2 Year: 2023 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v15n2-2023/AT-V15N2-2023-6.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:15:y:2023:i:1:p:93-104 Template-Type: ReDIF-Article 1.0 Author-Name: Fang Sun Author-Name: Fengyun Wu Title: THE IMPACT OF DEBT STRUCTURE ON AUDITORCHOICE Abstract: We investigate the impact of a firm’s debt structure on its choice of an auditor. Auditor choice is measured along two dimensions: brand name reputation and auditor industry specialization. Debt structure includesdebt level and debt sources. We find that firms with high leverage are less likely to have brand name/specialist auditors, consistent with managerial opportunism. Prior studies document that brand name/specialist auditors are more effective at constraining income-increasing accruals. Because the likelihood and cost of covenant violations increase with leverage, firms avoid brand name/specialist auditors to keep their financial reporting flexibility. We further investigate whether the negative relation between auditor choice and client leverage differs between firms with only private debt and firms that also have access to the public debt market. While it holds for firms that have only private debt, the negative relation turns positive for firms that also have public debt. This difference suggests the dominant role of the debt contracting hypothesis for firms that have public debt. Firms bond themselves to brand name/specialist auditors to access the public debt market. This paper extends the auditor differentiation and auditor choice literature and contributes to the growing literature on the impact of the debt market on firms’ financial reporting attributes. Classification-JEL: M420 Keywords: Auditor Choice, Debt Structure Journal: Accounting & Taxation Pages: 105-115 Volume: 15 Issue: 2 Year: 2023 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v15n2-2023/AT-V15N2-2023-7.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:15:y:2023:i:1:p:105-115 Template-Type: ReDIF-Article 1.0 Author-Name: Mingjun Zhou Title: THE EFFECT OF A LAST-MINUTE CHANGE IN THE INFLATION REDUCTION ACT: ESTIMATES FROM LARGE CORPORATIONS’ DEFERRED TAX LIABILITIES Abstract: This study examines the legislative process of the Inflation Reduction Act of 2022 and focuses on a lastminute change in the new Corporate Alternative Minimum Tax (CAMT) proposal, which allows tax deprecation in determining the Adjusted Financial Statement Income and the tentative minimum tax. I collect detailed form 10-K data for a subset of S&P 500 companies that are potentially subject to the new CAMT. For these firms, the total deferred tax liabilities that can be attributed to accelerated tax depreciations are approximately $ 188 billion at the end of fiscal 2021. The results show that firms in the utilities and telecommunication sector, as well as the healthcare and information technology sector, are most likely to benefit from this last-minute change. Classification-JEL: M41, M48 Keywords: Deferred Tax liability, Inflation Reduction Act, OECD Pillar Two, Global Minimum Tax, Tax Depreciation Journal: Accounting & Taxation Pages: 117-127 Volume: 15 Issue: 2 Year: 2023 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v15n2-2023/AT-V15N2-2023-8.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:15:y:2023:i:1:p:117-127