ABSTRACT Although this paper is not a book review, it discusses several recent publications in the area of information economics as applied to accounting. The major books mentioned and compared are those by Christensen and Demski (2003), the two volumes by Christensen and Feltham (2003, 2005), as well as two German books by Ewert and Wagenhofer (1993/ 2003) and Wagenhofer and Ewert (2003). The paper discusses the contrast between the traditional “value approach” and the more recent “information perspective", as well as the major methodological and theoretical tenets of the latter. Additional sections are devoted to “issues beyond the competence of the information perspective", “opposition and criticism” (with such subsections as “resistance to the mathematical‐analytical approach", the “neglect of traditional accounting terminology", and “other objections"), an inquiring section “toward a general theory of accounting", and, finally, a conclusion from a wider angle.
ABSTRACTThis paper tells how the School of Accounting and the bachelor of science in accounting degree were established at the University of Saskatchewan. Archives, various published histories, and contemporaneous periodicals serve as the main sources of information. The Institute of Chartered Accountants of Saskatchewan plays a key role in the history and it is evident that the establishment of the accounting program was critical for the legitimacy of both the University and the Institute.The paper argues that the University of Saskatchewan had the first school of accounting and the first accounting degree in Canada. A brief overview of the development of other business‐oriented degrees and diplomas in universities across Canada is provided in order to support this claim. Based on the history provided and some additional contextual material, some speculation is offered as to why the University of Saskatchewan was the first to offer an accounting degree instead of one of the older, more established universities in eastern Canada.The paper makes three contributions. First, it fills a void in the literature with regard to the history of the School of Accounting and the accounting degree at the University of Saskatchewan. Second, it provides a bird's‐eye view of the establishment of business education programs at other universities in Canada. Third, it adds to our understanding of the relationship between the accounting profession and academe by demonstrating how people and institutions align to create new educational mechanisms.
ABSTRACTGiven the importance of stock options in the aggregate compensation of chief executive officers and other firm employees in the 1990s and early 2000s, the International Accounting Standards Board issued an International Financial Reporting Standard on stock‐based payments on February 19, 2004, requiring that all share‐based payment transactions be recognized at fair value in entities' financial statements. The Canadian Institute of Chartered Accountants' Accounting Standards Board had already agreed to this principle and amended section 3870 of the CICA Handbook (stock‐based compensation) for financial periods beginning on or after January 1, 2004, making Canada the first major jurisdiction to require all public companies to expense employee stock‐based compensation awards. The revised section eliminated the possibility of disclosing pro forma net income and earnings per share only by way of a note.This research, conducted as a between‐subjects experiment with executive MBA students as nonprofessional investors, examines whether changes in the way stock option compensation is reported (recognition as an expense in the income statement or note disclosure of pro forma net income and earnings per share) affect financial statement users' judgements and investment decisions. Our results indicate that, consistent with the functional fixation hypothesis, the reporting method does indeed significantly influence subjects' judgement of the expected stock price direction, but has no material influence on their investment decisions.
ABSTRACTIn 1995, the federal government of Canada announced that it would adopt full accrual accounting. The change was fully implemented at the department level in 2001 and for government‐wide financial reporting in 2003. Using the perspective of institutional theory, we examine several factors that had the potential to influence the federal government's decision to adopt full accrual accounting, including two royal commissions, the Office of the Auditor General of Canada, the Canadian Institute of Chartered Accountants, credit markets, and the practices of other national governments. We find that the decision to change to accrual accounting can be largely attributed to coercive and normative influences of the Office of the Auditor General of Canada (supported by the normative influence of the Canadian Institute of Chartered Accountants' Public Sector Accounting Board) and mimetic isomorphism with other members of the federal government's organizational field.
ABSTRACTRecent financial scandals have raised the awareness that accountants should be alert to potential fraud and other economic disputes and can provide significant assistance in preventing, investigating, and resolving such matters. Forensic accountants provide these services with knowledge of court requirements and proceedings so that effective legal action is possible, even though most actions are concluded without the involvement of the courts. Although forensic accounting was growing in importance even before Enron and the Sarbanes‐Oxley Act, the ensuing tightening of the securities regulations in both Canada and the United States triggered recognition that accounting students and professionals need a fuller understanding of fraud and other economic crimes, and how to find, prevent, and resolve them, as well as the career choices that could be involved. While some of this material is covered in auditing texts and courses, emerging expectations will require the enhancement and restructuring of forensic accounting education within university programs, and will encourage more interest in graduate specialist professional designations. This paper has two objectives: to offer insights into the design and delivery of forensic accounting programs, and into the availability of professional programs; and to provide some exploratory evidence on the type of services currently rendered by investigative and forensic accountants in Canada.
ABSTRACTThis paper explores how research in accounting history can contribute to the important public policy debate regarding investors' need for disclosure regulation. Accounting, finance, and economics researchers and practitioners argue for, as well as against, disclosure regulation. The debate remains theoretical, however, because empirical studies are virtually nonexistent. This paper reviews five contexts in which accounting historians can begin a search for empirical insights concerning the costs, benefits, externalities, and effects on stakeholders of disclosure regulation. The paper's investigation of the accounting history literature suggests that accounting historians could improve the quality of the debate and help accommodate broader interests or alternative solutions to financial crises.
This study examines the historical development of the auditor's report in Canada. The auditor's report has been significantly influenced by British and U.S. legislation and practices. The English Joint Stock Companies Act of 1844 required compulsory audits and the British audit report was introduced in North America shortly after the introduction of this Act. The legislature prescribed an audit but it did not determine the form and content of the auditor's report; these were left to the individual practitioner. The British influence was strong in Canada up to the 1930s. However, from this time onward, the U.S. influence began to grow. The impact of the landmark case of Ultramares v. Touche on third-party liability and consequent change in the auditor's report is analyzed. The paper uses institutional theory to explore reasons for the similarities of the auditor's report under British influence and under American influence. Specifically, the paper examines how the mechanisms of mimetic, coercive, and normative isomorphism led to institutional change in the accounting profession as organizations adapted their auditors' reports to achieve greater legitimacy.
Canadian Accounting PerspectivesVolume 5, Issue 2 p. 239-256 CAP Forum on Forensic Accounting in the Post-Enron World: Introduction and Commentary*/FORUM DE RCC SUR LA JURICOMPTABILITÉÀ L'ÈRE POST-ENRON/INTRODUCTION ET COMMENTAIRE WALLY SMIELIAUSKAS, WALLY SMIELIAUSKAS University of TorontoSearch for more papers by this author WALLY SMIELIAUSKAS, WALLY SMIELIAUSKAS University of TorontoSearch for more papers by this author First published: 15 January 2010 https://doi.org/10.1506/2F2F-DP0V-2VGY-K1CECitations: 2 * The author would like to thank Joel Amernic, Norman Macintosh, Jordan Peterson, and SSHRCC for encouragement and support for this project over the years. AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Citing Literature Volume5, Issue2November 2006Pages 239-256 RelatedInformation
ABSTRACTThe majority of previous studies investigating the different risk factors associated with financial fraud have focused on investigating misreporting. A few studies have provided only a limited descriptive analysis of cases involving misappropriation of assets without investigating the corporate governance structure and its role in reducing the incidence of misappropriation. Only Beasley (1996) has examined financial fraud and corporate governance structure by combining cases of misreporting and misappropriation of assets by top management.This study investigates the relationship between the incidence of misappropriation of assets by employees, including management, and the effectiveness of the audit committee. Using LEXIS‐NEXIS Research Software 7.1, Business/Finance News to find relevant articles, we identified publicly held companies suffering misappropriation of assets by employees during the period from 1987 to 2000. The study investigated 81 companies experiencing misappropriation and two control samples: 81 random‐control companies and 81 matched‐control companies.The results extend the previous literature related to financial fraud and corporate governance. The percentage of independent members in audit committees and the average tenure of audit committee members were significantly and negatively related to the incidence of misappropriation of assets in publicly held companies in both the random and the matched models, while the number of audit committee meetings was not significant.
ABSTRACTThe factors influencing the organizational as well as the individual decision to utilize the balanced scorecard (BSC) approach have not been widely researched. In the first part of this paper, we study BSC adoption at the organizational level while utilizing a multifaceted perspective of socio‐psychological, economic, and resource‐based influences; specifically, we investigate the perceptions of desirability, urgency, and feasibility of BSC adoption. Our findings show that customer norms, competitor norms, and organizational resources are significant predictors of BSC adoption.In the second part of the paper, we discuss individual‐level aspects of utilization decisions. Here, we explore the impact of perceived ease of use, perceived usefulness, and awareness on the intentions to use the BSC approach. Our findings show that both awareness of BSC capabilities and perceived ease of use are significantly related to perceived usefulness. However, only perceived usefulness is significantly related to intentions to use the BSC. Implications for research and practice are discussed.
Canadian Accounting PerspectivesVolume 5, Issue 1 p. 1-18 Editorial/Éditorial: History and Myth in Applied Accounting Research and Education / La recherche appliquée et la formation en comptabilité: histoire et mythes: A Canadian Accounting Perspectives Special Issue on Accounting History: Applied and Policy Perspectives/Numéro spécial de Perspectives comptables canadiennes sur l'histoire de la comptabilité: Points de vue de l'application et des politiques JOEL H. AMERNIC, JOEL H. AMERNIC Université de TorontoSearch for more papers by this authorDEAN NEU, DEAN NEU University of CalgarySearch for more papers by this authorHARJINDER DEOL, HARJINDER DEOL University of CalgarySearch for more papers by this author JOEL H. AMERNIC, JOEL H. AMERNIC Université de TorontoSearch for more papers by this authorDEAN NEU, DEAN NEU University of CalgarySearch for more papers by this authorHARJINDER DEOL, HARJINDER DEOL University of CalgarySearch for more papers by this author First published: 15 January 2010 https://doi.org/10.1506/CTPX-6APJ-9C32-PUB5AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Volume5, Issue1May 2006Pages 1-18 RelatedInformation
ABSTRACTThis paper uses the theoretical framework of Goldman and Barlev (1974) to examine auditor independence in Canada. It traces the historical development of the auditor's role in the 19th century and the beginning of the auditor's relationship with shareholders and management. It shows how, following the separation of management from shareholding, management's ability to influence auditors undermined auditor independence. The paper traces attempts by legislators and regulatory bodies to limit management's influence over auditors and to correct the asymmetry of their relationship. It notes that recent changes to legislation and rules of professional conduct are no longer proactive, but are reactions to corporate scandals in Canada and the United States. The paper argues that although future changes will occur to redress the imbalance, only structural changes are likely to provide a real solution to auditor independence problems. However, it is likely that such changes will be resisted by the accounting profession.
Canadian Accounting PerspectivesVolume 4, Issue 2 p. 121-164 Editorial/Éditorial/Honouring the Legacy of Ross MacGregor Skinner: Judgment in Jeopardy/Hommage à la mémoire de Ross MacGregor Skinner: Pierre angulaire: Introduction: A Tribute to Ross Skinner/Numéro spécial de Perspectives comptables canadiennes à la mémoire de Ross Skinner: Ross Skinner: His Unique Contributions/L'inestimable contribution de Ross Skinner: Ross Skinner: Judgment in Jeopardy: Pierre angulaire JOEL H. AMERNIC, JOEL H. AMERNIC Rotman School of Management, University of TorontoSearch for more papers by this authorIRENE M. GORDON, IRENE M. GORDON Simon Fraser UniversitySearch for more papers by this authorALISTER K. MASON PhD, FCA, FCMA, ALISTER K. MASON PhD, FCA, FCMA University of WaterlooSearch for more papers by this authorJ. ALEX MILBURN, J. ALEX MILBURN Rotman School of Management, University of TorontoSearch for more papers by this authorROSS SKINNER, ROSS SKINNER Rotman School of Management, University of TorontoSearch for more papers by this author JOEL H. AMERNIC, JOEL H. AMERNIC Rotman School of Management, University of TorontoSearch for more papers by this authorIRENE M. GORDON, IRENE M. GORDON Simon Fraser UniversitySearch for more papers by this authorALISTER K. MASON PhD, FCA, FCMA, ALISTER K. MASON PhD, FCA, FCMA University of WaterlooSearch for more papers by this authorJ. ALEX MILBURN, J. ALEX MILBURN Rotman School of Management, University of TorontoSearch for more papers by this authorROSS SKINNER, ROSS SKINNER Rotman School of Management, University of TorontoSearch for more papers by this author First published: 15 January 2010 https://doi.org/10.1506/4FAF-UQA2-D3K4-74BWAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Volume4, Issue2November 2005Pages 121-164 RelatedInformation
Many social responsibility/sustainable development (SR/SD) issues affecting accounting policies and standards will have to be addressed by present and future accountants. This paper investigates qualitative factors that may impede the learning of, and attitudes toward, SR/SD. While Gordon (1998) examined exposure to SR/SD, the present study contributes to the literature in several ways. First, to overcome one of the limitations of Gordon's study, noted by her, matched pair responses (n = 198) to pre- and post-study questionnaires are employed in this study. These responses are analyzed using t-statistics, cluster analysis, and multivariate analysis. Second, three factors not previously examined that may affect learning of SR/SD (number of economics courses taken, gender, and grade point average) are explored in this paper. The positive conclusion is that exposure to SR/SD had more influence on learning, understanding, and attitudes than did pre-existing demographic and educational background variables with the exception of grade point average. As a surrogate for intelligence or ability to learn, grade point average was found to be highly significant in a multivariate model. An appreciation that ability to learn affects understanding and attitudes is important for instructors in both continuing professional education and university/college accounting.
Textbook authors and publishers face a difficult decision regarding coverage of activity-based costing (ABC). ABC could be presented in a strictly positive light, because it enjoyed immense popularity when it was introduced in the 1980s and it is still referred to in favourable terms in practitioner journals. On the other hand, ABC can be criticized on practical and theoretical grounds. Surveys report that a minority of firms adopt ABC, and there are indications of dissatisfaction among some users. In addition, ABC requires direct proportionality and the exclusion of common costs, which are difficult conditions to meet. In this paper, we first describe the practical and theoretical material supporting criticism of ABC that is available to be cited by textbook authors. We then review the coverage of this material in the five textbooks that are most widely used in Canadian universities and colleges.
A university degree or equivalent is one of the criteria for eligibility to write the CMA Entrance Examination. This study assessed the various attributes, including exposure to general education, acquired during university studies and their impact on candidates' performance in the examination. The data, including the academic transcripts of 270 candidates who wrote the CMA Entrance Examination, were analyzed. Results indicated that a positive, statistically significant association existed between the examination score and the candidates' exposure to liberal/general education, credit hours passed in accounting, grade point average in accounting and grade point average in the overall course work. Credit hours failed in accounting showed a negative correlation. These findings have implications for accounting educators, student counselors, students and the profession of accountancy in general.
ABSTRACT In this commentary, we examine recent developments in Canadian financial reporting related to (1) the conceptual framework, (2) accounting standards, and (3) corporate governance issues, in light of Skinner's (1995) thoughts on professional judgment. We consider how effective these developments are in addressing several questions and concerns raised by Skinner.
ABSTRACTWe are honoured to contribute our ideas to the tribute to Ross Skinner, stimulated by his 1995 CA Magazine article “Judgment in Jeopardy". Our effort is titled “An Essay” because we want to suggest an approach to the problem of judging fairness in financial reporting that Skinner raised and to explore some consequences of that approach. We include no literature references other than to “Judgment in Jeopardy", and occasionally to Homer, because we have developed the ideas in this essay specifically for this tribute and have not relied on others in doing so. There has been an enormous amount of writing about accounting standards, professional judgment, fairness, and other related topics, but rather than exploring all that, we have focused directly on Skinner's concerns and have tried to develop some consequences of those concerns.One of the issues Skinner's article raised is the possibility that a solution to the judgment problem will forever be elusive. Another is the enormous challenge that “fairness” presents in an increasingly complex world. To explore the implications of Skinner's call for judgment, we use a framework based on the relevance, reliability, and validity of accounting information as a means of addressing this challenge and the demands on social consensus that result. Since Skinner was concerned about the application of judgment to real problems, we illustrate our analysis by considering four contemporary accounting debates: principles versus rules, global convergence of accounting standards, the need for a stand‐alone Canadian standard‐setter, and accounting for stock options. We argue that ideological choices, competition among parties in society, and fundamental measurement problems support Skinner's prediction that a solution will remain elusive.
ABSTRACTWe provide preliminary evidence, consistent with Skinner (1995), that Canada's relatively principles‐based GAAP yield higher accrual quality than the United States' relatively rules‐based GAAP. These results stem from a comparison of the Dechow‐Dichev (2002) measure of accrual quality for cross‐listed Canadian firms reporting under both Canadian and U.S. GAAP. However, we document lower accrual quality for Canadian firms reporting under U.S. GAAP than for U.S. firms, which are subject to stronger U.S. oversight, reporting under U.S. GAAP. The latter results suggest that stronger U.S. oversight compensates for inferior accrual quality associated with rules‐based GAAP. Consistent with the positive effect of Canada's principles‐based GAAP and the offsetting negative effect of Canada's weaker oversight, we find no overall difference in accrual quality between Canadian firms reporting under Canadian GAAP and U.S. firms reporting under U.S. GAAP. Our results imply that (1) policymakers who wish to compare the effectiveness of oversight across jurisdictions must control for the GAAP effect; and (2) accounting standard‐setters who wish to compare the effectiveness of principles‐ versus rules‐based GAAP must control for oversight strength.
