Individuals have a tendency to fixate on large numbers and ignore other relevant information in their decision making process. The numerosity heuristic, a cognitive bias, is the first behavioral hypothesis to explain why investors prefer to receive more shares (rather than less shares) in a stock split even though the aggregate economic value is the same. For forward splits, after controlling for the positive signaling of improved earnings growth and liquidity from the split announcement, the stock price reacts positively to the larger number of shares issued. More importantly, the use of a dual class numerosity model can explain why most conventional hypotheses fail to explain the negative stock price reaction to reverse splits. Given a typical bearish outlook associated with a reverse stock split, investors' cognitive resources have already been conditioned to derive a systematic conclusion to sell the stock at the higher price. Focusing only on large stock price numerosity, investors are incorrectly inferring a higher investment value. As the high numerosity encourages bearish investors to sell at the higher perceived investment value, the stock returns react more negatively to the higher post-reverse split price level. In both forward and reverse split cases, investors react to high numerosity.

The "Global Financial Crisis" (GFC) has had a significant impact on the auditing profession, audit firms, and their clients. This paper replicates and extends prior studies that have investigated auditor going-concern reporting in the wake of audit failures (e.g., Feldmann and Read, 2010) and economic catastrophe (e.g., Geiger et al., 2014) by examining audit opinions issued by Big 4 and non-Big 4 audit firms to 305 U.S. prebankruptcy companies from 2008-2014. This paper uses logistic regression models to examine whether the likelihood of issuing a GCO was influenced by the GFC and, if so, whether such influence persisted in the periods that followed the GFC, and whether reporting behavior and persistence differed by audit firm size. The authors find that auditors behaved more conservatively during the GFC by issuing higher levels of going-concern opinions and this behavior persisted in the two years immediately following. The eventual waning in conservatism that occurs after the two-year period beyond the GFC is primarily associated with Big 4 audit firms; the reporting behavior of non-Big 4 firms did not significantly differ across time periods.

Universities are under fire for their allocation of the significant revenues generated from their highest-profile sports: football and men’s basketball. The criticism stems from the allocation of funding, where most revenue is used to pay salaries to coaches and athletics administrators instead of benefiting the participating studentathletes. The family travel allowance is one small appeasement in addressing such criticisms. While this travel benefit is a generous gesture, there are potential income tax consequences. This article reviews the potential taxation of the travel allowance program. The article concludes with a sample university policy for the provision of travel stipends and a recommendation for an Internal Revenue Service ruling regarding the taxability of this benefit.

As of April, 2012, only 168 U.S. institutions had attained and maintained AACSB accounting accreditation. Our objective was to determine why more U.S. institutions have chosen not to pursue AACSB accounting accreditation by identifying accreditation-related issues that are perceived to reduce an institution’s interest in seeking and/or ability to attain it. Surveys were returned by 103 of the 303 accounting program administrators at U.S. institutions with AACSB business (but not accounting) accreditation. The 86 respondents from units not pursing accounting accreditation neither agreed nor disagreed attainment of accounting accreditation would be valued by their institution’s internal constituencies or would enhance their unit’s reputation. Further, these respondents generally perceive their unit meets AACSB accounting pre-conditions and would have the ability to meet most accounting accreditation standards if they chose to pursue accounting accreditation. The issues of most significance are resource-related – securing the necessary resources to achieve their mission and action items and to meet AACSB standards on faculty sufficiency. Overall, the respondents’ lack of interest in accounting accreditation reportedly has less to do with the inability to meet accreditation standards and more to do with a lack of perceived value in accounting accreditation to warrant commitment of necessary resources.

INTRODUCTION The American Assembly of Collegiate Schools of Business (now the Association to Advance Collegiate Schools of Business International; hereafter, the AACSB) approved the establishment of an accounting accreditation program in 1978. Accreditation standards were adopted in 1980 and accreditation of collegiate accounting programs began with the accreditation of eighteen accounting programs in 1982 (Gaharan et al., 2007). The idea of accounting accreditation was well-received initially. In fact 84 percent of the accounting chairs responding to a survey expressed intent to seek accounting accreditation (Brown and Balke, 1983). As of April, 2011, however, only 175 institutions (29 percent of the 607 AACSB business accredited institutions) have attained and maintained accounting accreditation; one hundred sixty-six of these institutions are located in the United States. While the AACSB does not disclose the names or number of schools that earned accounting accreditation but have since chosen not to (or who have been unable to) maintain it, it appears that those numbers are quite small.1 Once an institution achieves accounting accreditation, it typically maintains that accreditation. Why? The objective of this paper is to identify the perceived institutional benefits of accounting accreditation through a survey of administrators at schools that are AACSB accounting accredited and to determine whether these perceived benefits differ across these institutions. THE DEVELOPMENT OF ACCREDITATION STANDARDS FOR ACCOUNTING PROGRAMS (2) MacKenzie (1964) notes that accreditation in education serves two primary purposes: 1) to assist the public in identifying quality institutions by certifying institutions (or programs within institutions) that meet formal minimum standards; and 2) to raise the overall quality of education through the requirement of minimum standards for excellence. The AACSB adopted formal accounting accreditation standards in 1980 (Langenderfer, 1987) and eighteen accounting programs were initially accredited in 1982 (Gaharan et al., 2007). In 1991, the AACSB substantially revised its business and accounting standards, perhaps in response to critics who believed the original standards were too prescriptive and thereby limited innovation and experimentation and discouraged the development of new programs (Bailey and Bentz, 1991). These revised standards, which are mission-based, acknowledge the diversity among existing business and accounting programs and allow institutions more flexibility in achieving their missions. Schools are now evaluated relative to their stated missions (Kren et al., 1993; McKenna et al., 1995). (3) The institution's mission is to guide its decisions, including its allocation of resources. Each institution determines the relative emphasis to be placed on faculty teaching and intellectual contributions and the types of intellectual contributions (including publications) that are to be emphasized. Many academicians (including deans at both accredited and non-accredited schools) believed that the mission-based approach would lead to an increased number of accredited institutions, particularly schools that emphasize teaching over research (Yunker, 1998; Jantzen, 2000). Relative to accounting, the AACSB followed in April, 2000, with a new, more flexible set of accounting accreditation standards that provided accounting units with further discretion to accomplish their missions and meet the needs of their markets (Sinning and Dykxhoorn, 2001). The standards have since been revised in 2004, 2005, 2007, 2008, 2009, and 2012. (4) Some of the more notable revisions include the use of formal strategic planning in the accounting unit, modification of the content requirements for accounting program mission statements, requirement of data on accounting student placement and the career success of program graduates, and mandating the establishment of accounting program learning goals and a direct assessment program, among others. …

ABSTRACT The in-charge accountant (ICA) for the Central Florida Emphysema Foundation (CFEF) audit engagement is left to wrap up the audit while the audit manager is away on vacation and the audit partner unexpectedly leaves for an out-of-state family funeral. Only one outstanding issue remains—accounting for a $5,000,000 cash bequest that CFEF received in the mail shortly after year-end. What is the appropriate accounting? After working through the issue, the ICA ends up on the opposite side of the fence from the client and even an audit partner from an associated firm. What should the ICA do? This instructional case, based on a real-life experience, provides students the opportunity to gain a better understanding of an auditor's professional responsibilities through examination of the issues that arise in the audit of a not-for-profit entity. The case focuses students on important attributes one needs to be a successful CPA—ethics and integrity, perseverance, sound judgment, and decision-making and professional skepticism. Applying their knowledge of GAAP, auditing standards and the American Institute of Certified Public Accountants' [AICPA] (2010) Code of Professional Conduct, students will gain a better understanding of the types of situations that arise in practice and will confront the personal and professional choices that auditors must make.

isk Assessment Requirement 1 During the planning process, an auditor is required to obtain an understanding of the entity to e audited and its environment, including internal control, in order to assess the business risk aced by the entity being audited AU 314 or GAGAS 4.03 . Based solely on what you’ve learned bout the VBSD budget process in Part I of the case, identify and explain three case-specific ractices that should be considered by the auditor when assessing risk and designing audit proceures.

ABSTRACT: In August 2005, Violet Bay taxpayers were surprised to learn that their school system had amassed a $7 million deficit for the 2004–2005 budget year, despite previous assurances of a surplus. Ultimately, the actual deficit was found to be $12.1 million. A special grand jury investigation uncovered numerous internal control problems that contributed to the deficit.This instructional case provides students the opportunity to gain a better understanding of the importance of internal control, particularly a strong control environment, through examination of the problems encountered by an actual governmental entity, renamed the Violet Bay School District. It also gives students some practical experience with tasks such as gaining an understanding of an entity and identifying its business risks, evaluation of internal control using the five components of the Committee of Sponsoring Organizations (COSO) framework, identification of fraud indicators, and consideration of the likelihood of fraud occurrence. The case also provides exposure to ethical issues.

In the United States (U.S.) in the eighteenth and early nineteenth centuries, current accounting practice was rooted in the seaport cities (Previts & Merino, 1998]. During this period of mercantile capitalism, trade from U.S. seaports with the British Empire, France, and other countries was undertaken in slow sea-going vessels. Trading ventures of this time required a great deal of capital to support the long-term nature of the enterprises and was generally conducted by several merchants pooling their capital, or with vessels freighting for more than one merchant per voyage (Costa, 1992; Previts 8 Merino 1998). Such complex business processes conducted over an extended period of time required a means of control and communication of business activities to satisfy all parties to the venture and maintain continued partner relationships. Thus, a necessary condition for seaport merchants undertaking such ventures was the maintenance of detailed record keeping in double entry accounting with accurate calculations of profit and loss (Previts & Merino, 1998). Double entry accounting was simply a tool to keep the businessman informed of his and his partners' gross profit margin, and solvency (Lee, 1975). Aspiring businessmen of this time learned the much required double entry accounting in one of two ways: through the study of accounting textbooks of the period, or through rigorous apprenticeships in merchant counting houses (Previts & Merino, 1998; Previts & Sheldahl, 1977).If Previts and Merino (1998) are correct regarding the importance of double entry accounting and reporting to the U.S. seaboard merchants of the 18th and 19th centuries, an examination of the account books of a seaport trading merchant of that time should show detailed record keeping and calculations of profit and loss, as well as subsequent reporting of such information to all parties to the venture. Of even more interest, would be the account books of a seaport merchant who dealt first in small business transactions and eventually undertook more complicated trading ventures. Such a career path to a successful early trading career was undertaken by John Myers of Norfolk, Virginia, beginning in 1800 when he was twelve years old. An examination of his account books from 1800 to 1804 shows an evolution over time from the recording of simple financial transactions in double entry format with no distinction between personal and business affairs, to the detailed accounting and reporting for increasingly complex business dealings with his trading partners. Although his record keeping shows that Myers did not advance the practice of double entry accounting, his use of such a system allowed him to determine his profit and loss on his various ventures, and repeat or expand those business transactions that were successful. Thus double entry accounting allowed a twelve year old to become a prosperous merchant during an era of unrest in global trade for the U.S. Additionally, Myers' account books give us insight into the society and unsettled economic period that prevailed in Norfolk at that time and allow us to learn more about the world in which the accounting records were created (Vollmers & Bay, 2001).This article will first offer a brief description of the Federalist period of U.S. history and the Myers family business in Norfolk, Virginia, as well as a review of John Myers' business career and his accounting training. This is followed by details of the young Myers' actual accounting entries to his books of record and his reporting to his trading partners. Finally, conclusions as to Myers' development over time as an accountant and businessman, as well as what his accounts reflect of Norfolk society and economy at the time, will be presented.The U.S. Federalist Period and the Myers' Family BusinessThe establishment of the Myers family business in Norfolk, Virginia, came at a time when the fledgling U.S. was establishing both its internal federal authority and foreign relations with world powers. …

The strong market for new accounting faculty coupled with the significant costs of recruiting faculty necessitates an understanding of the preferences of job candidates by employer institutions. Candidates for entry-level positions could also benefit from an understanding of the past experiences of their peers. This study explores the initial job selections of new accounting faculty. A survey of 196 individuals who accepted an entry-level accounting faculty position during 1996 or 1997 resulted in one hundred seventeen usable responses. Thirty-eight of the 54 variables in the survey were rated somewhat or important. Generally, respondents at teaching-oriented schools and schools without doctoral programs regarded personal variables as more important, while respondents at research-oriented schools and schools with doctoral programs placed more importance on research-related variables and graduate education. Factor analyses indicated that respondents sought adequate research resources, low service expectations, and good benefits from a school located in an area which would afford them quality of life outside of work. Contrary to prior research, compensation variables were not included in any of the reported factors. Regardless of affiliation and consistent with prior research, the typical faculty work load included a significant research component and research effectiveness was perceived as the most important criteria for promotion and tenure.

INTRODUCTION College professors, like most other professionals, are highly mobile (Lichter 1982). Several factors could potentially contribute to an accounting professor's decision to change institutions. These factors include an imbalance in the supply of and demand for accounting academics (Schultz 1989), salary compression (Jacobs and Herring 1987; Schultz 1989), and the failure to receive tenure (Schultz 1989; Schultz, et al. 1989). Experienced accounting professors contemplating re-entry into the job market could benefit by better understanding the variables considered by employers in the search and hiring process. The primary purpose of this study was to determine those variables that are most important. To do this, a two page survey was developed to solicit information from employer institutions that had recently undertaken a search. The survey contained three sections, the most important of which listed 39 variables that may be important to the hiring decision. Subjects were asked to rate the relative importance of each variable to their institution's search using a five point importance scale. MOTIVATION FOR STUDY The mobility of college professors can be attributable to their loyalty to their disciplines (as opposed to their employers) and the portability of their teaching and research skills (Brown 1967). Several factors could potentially contribute to an accounting professor's decision to move: an imbalance in the supply of and demand for accounting academics (Schultz 1989), salary compression (Jacobs and Herring 1987; Schultz 1989), the failure to receive tenure (Schultz 1989; Schultz, et al. 1989), and nonwork (personal) issues (Holland and Arrington 1987). In recent years, the supply of new doctorates in accounting has declined dramatically. In fact, the number of doctoral degrees awarded in accounting fell 38 percent from 199 degrees in 1992 to 124 degrees in 1998 (Hasselback 2000). This decline, coupled with increasing market demand due to position backlog, the creation of new programs, turnover, and retirements, has resulted in a shortage of qualified accounting professors (AACSB 1998b). For example, based upon a survey of its members, the American Assembly of Collegiate Schools of Business (AACSB) found that for the 1997-98 academic year there were 1.7 openings per accounting doctoral graduate. A total of 250 positions remained unfilled that year, a vacancy rate of 7.5 percent (AACSB 1998a). If accounting programs cannot meet their needs by hiring new graduates, they may have little choice but to lure away experienced professors from other institutions with better offers (AACSB 1998b). The heated market for new doctorates has pushed starting salaries ever higher and has made the reality of salary compression even harsher for experienced faculty. On average, new assistant professors hired in 1998 were paid $1,800 (2.6 percent) more than experienced assistants; those with new doctorates in accounting were paid, on average, $73,000 (AACSB 1999). As a reference point, the average associate and full professor earned $73,800 and $90,400, respectively, in 1998. Certainly, accounting faculty who have fallen victim to significant salary compression and have maintained the portability of their skills have incentive to change institutions. Some accounting faculty have little choice but to change institutions when they are denied tenure or when they perceive their chances for tenure as unlikely. Schultz, et al. (1989) noted that success rates for those applying for tenure significantly declined between the early 1960s and the mid-1980s; this downward trend was expected to continue into the 1990s. Salary and tenure issues are not the only reasons many faculty have chosen to move. Holland and Arrington (1987) found that family matters were the second most important variable in the decisions of accounting professors to relocate. Research opportunities and support, the reputation and quality of the new institution, and geography and quality of life were also important factors in the relocation decision (Holland and Arrington 1987). …

According to the 1996-97 AACSB membership directory, only 122 of the 326 (37 percent) institutions with accredited business schools also held accounting accreditation. The objective of the research reported in this paper was to determine why so few accounting programs are accredited. Surveys were mailed to the accounting program administrator at all 326 accredited institutions. One hundred sixty-one usable responses (49 percent) were received. Responses indicated major differences in the attitudes of administrators of accredited and nonaccredited accounting programs regarding accounting accreditation. Generally, administrators of accredited programs perceived significantly more value in accounting accreditation, while administrators of nonaccredited programs viewed accounting accreditation as a costly process. Results point to a possible decline in the interest level in accounting accreditation by nonaccredited programs. Perhaps the AACSB needs to increase its effort to promote the benefits of accounting accreditation to this group.

Extensive changes in the healthcare environment prompted the AICPA to issue a revised guide to auditing and accounting for healthcare entities. This guide's revisions brought significant changes to how healthcare organizations report financial items regarding revenue, expenses, bad debt, and charity care. This article studies how providers have implemented the required reporting changes and attempts to gauge the effects of this implementation on provider business-office procedures, internal financial reporting, and costs.

A survey was conducted by authors Bitter and Cassidy to assess hospital providers' and auditors' perceptions of the reporting requirements of the new Audits of Providers of Health Care Services guide published by the American Institute of Certified Public Accountants. Responses indicated that there is still much dissent in the healthcare community as to what is useful information and what the effects of the new guide will be on hospital providers, auditors, and users.