Barbara Apostolou

Accounting education literature review (1997–1999)

Abstract By reviewing a subset ot the accounting education literature published during the period 1997–1999, this paper updates literature reviews by Rebele, Apostolou, Buckless, Hassell, Paquette, and Stout [Rebele, J.E., Apostolou, B.A., Buckless, F.A., Hassell, J.M., Paquette, L.R., & Stout, D.E. (1998a). Accounting education literature review (1991–1997), part I: curriculum and instructional approaches. Journal of Accounting Education, 16(1), 1–51.] [Rebele, J.E., Apostolou, B.A., Buckless, F.A., Hassell, J.M., Paquette, L.R., & Stout, D.E. (1998b). Accounting education literature review (1991–1997), part II: students, educational technology, assessment, and faculty issues. Journal of Accounting Education, 16(2), 179–245.]; Rebele, Stout, and Hassell [Rebele, J.E., Stout, D.E., & Hassell, J.M. (1991). A review of empirical research in accounting education: 1985–1991. Journal of Accounting Education, 9(2), 167–231.]; and Rebele and Tiller [Rebele, J.E., & Tiller, M.G. (1986). Empirical research in accounting education: a review and evaluation. In A. C. Bishop, E. K. St. Pierre & R. L. Benke (Eds.), Research in accounting education (pp. 1–54). Harrisonburg, VA: Center for Research in Accounting Education, James Madison University]. We review published articles related to the topics of assessment, curriculum and instructional approaches, educational technology, faculty issues, and students from the following five journals: Journal of Accounting Education, Issues in Accounting Education, Accounting Education, The Accounting Educators’ Journal, and Advances in Accounting Education. A large number of accounting educators have contributed to the literature between 1997 and 1999, with over 390 different authors cited in the body of the text (30 authors published two articles, 11 published three, and one author published four articles). More than 120 individuals are cited as authors of cases and instructional resources (seven authors published two cases and one published three). Recommendations for research are offered at the end of each major section. An appendix identifies instructional cases and educational resources published during the 1997–1999 period by journal and topic.

The sensitivity of the analytic hierarchy process to alternative scale and cue presentations

Abstract The Analytic Hierarchy Process (AHP) has gained prominence in the accounting literature as a method to model the decisions of experts. Also, the AHP is used to help individuals structure decisions. AHP researchers have several choices when constructing AHP instruments that elicit judgments from participants; however, little guidance is available regarding the ‘best’ choice. In particular, the AHP response scale can be numerical, verbal, or graphical. Paired comparisons can be presented in a random or nonrandom format, or in a top-down or bottom-up order. This paper reports the results of three related experiments investigating whether differences in the scale used or the format order of paired comparisons yields significant differences in the AHP models. The results offer some evidence that the scale used is associated with different AHP models. Also, some evidence is provided that the random versus nonrandom format of the paired-comparison presentation is associated with different AHP models. However, the results for the scale and format effects are not evident across all experiments.

An empirical examination of the sensitivity of the analytic hierarchy process to departures from recommended consistency ratios

We use the Analytic Hierarchy Process to examine the judgments of 126 professional internal auditors regarding the importance of 14 factors (called red flags) that may signal the potential for financial fraud within a business organization. The red flags are separated into three categories: management characteristics, firm characteristics, and industry characteristics. The professional internal auditors rated management characteristics as the most important category of characteristics, with five specific characteristics having local weights of 0.117-0.283. Additionally, and perhaps more importantly, we examine whether the global weights for the 14 red flags are different for subsamples of 61 responses with individual consistency ratios of @? 0.10, and 65 responses with consistency ratios of > 0.10. The results indicate that the global weights of the two subsamples are not significantly different. This finding provides preliminary evidence that researchers may be able to use responses with consistency ratios of > 0.10 without affecting the overall findings.

Heroes as a Context for Teaching Ethics

Abstract Various external pressures from accrediting and regulatory bodies emphasize the importance of teaching ethics in business and accounting curricula. Traditional approaches to teaching ethics in accounting include philosophy-based approaches with case studies, critiques of unethical behavior, and study of the AICPA Code of Professional Conduct (1992). In the present study, a method that makes ethical behavior salient to the students is described. The study of ethics is introduced with an assignment that requires each student to identify his or her personal hero. The hero then serves as a personal model for ethical behavior in the formal study of professional ethics. Evidence suggests that heroes may be proxies for an individuals personal value system, externalizing a moral code that can be referred to time and again. Although presented here in an accounting context, the heroes approach is transferable to all business disciplines.

The Effects of Senior Internal Auditor Behaviour on Staff Performance and Satisfaction

Abstract The increasing importance of the internal audit function in the USA is evidenced by the attention focused on this function by professional standard setting bodies (Institute of Internal Auditors, 1989; American Institute of Certified Public Accountants, 1991) and an investigatory commission (National Commission on Fraudulent Financial Reporting, 1987). Previous research in both accounting (Jiambalvo and Pratt, 1982; Pratt and Jiambalvo, 1981) and organisational behaviour (see Yukl, 1989 for a review) has identified specific leader behaviours that result in improved performance and satisfaction. Using a recently developed taxonomy unavailable at the time these previous studies were conducted, this study explores the effect of leader (senior internal auditor) behaviours on subunit (internal audit team) performance and subordinate (internal audit staff) satisfaction. The results of this study indicate that audit efficiency is influenced by both task behaviours (e.g. administering discipline) and rel...

A Framework for the Pedagogy of Accounting Ethics

Faculty tasked with revising the accounting curriculum to incorporate an ethics component may benefit from the experiences reported in the literature. We construct and describe a framework for the pedagogy of accounting ethics based upon extant literature. Our purpose is to present the cumulative contributions to the literature in a fashion that is helpful to educators considering the inclusion or modification of ethics instruction in the accounting curriculum. The framework also serves as a way to motivate additional contributions to the literature with the goal of continuous refinements.

Journal Lists and Steps to Develop Them

Abstract Association to Advance Collegiate Schools of Business (AACSB) member schools often compare their faculties’ research records to journal lists of their “peer and aspirational” programs. They often survey faculty and administrators’ perceptions of journal quality; number of Social Sciences Citation Index downloads; or “count” the number of faculty publications – but rarely analyze accounting programs’ actual journal quality lists. To examine this issue, we use a survey of national accounting programs. We identify a set of quality-classified journal lists by sampling 38 programs nationwide, varying by mission (e.g., urban or research), degrees granted (e.g., doctoral degrees in accounting), and national ranking (e.g., classified as a Top 75 Research Program) – from which we derive 1,436 data points that classify 359 journals that appear on these 38 programs’ journal lists. We also describe a case study that an accounting program used to revise its old journal list. We also find that while programs generally use generally accepted “bright lines” among the top three categories (A+, A, A−), they tailor their listings from the wide variety of B or C classified journals to create their own sets of acceptable journals in these categories. The study provides guidance and data for accounting programs who wish to develop or revise their own journal lists. While many studies have examined journal rankings, this is the first study to document the use of journal lists by accounting programs with a wide array of missions.

An Examination of the Effect of Regulatory Actions on Client Retention

Research into the significance of auditor credibility shows that firms distinguish the services of a more credible auditor. Further, demand for levels of auditor credibility is shown to vary across firms purchasing audit services. This study extends the line of enquiry regarding the effect of auditor credibility by examining the reaction of client firms to changes in their auditors credibility. Also, the firm characteristics associated with a reaction to a change in credibility are examined. The results suggest that clients of the Big Eight firms react differently than clients of smaller audit firms to the change in credibility.

MANAGEMENT FRAUD RISK FACTORS: AN EXAMINATION OF THE SELF-INSIGHT OF AND CONSENSUS AMONG FORENSIC EXPERTS

Over the past two years, fraudulent financial reporting has become a major concern of both the Securities and Exchange Commission and investors. These concerns have been spurred by evidence that several high-profile companies such as Enron, Tyco, WorldCom, and HealthSouth have published false and/or misleading financial reports. Statement on Auditing Standards (SAS) No. 82 specifies that auditors have a responsibility to assess the likelihood of management fraud and identifies specific risk factors that should be considered when making that assessment. Apostolou et al. (2001b) examined how internal and external auditors rate the relative importance of these factors. This study extends Apostolou et al. (2001b) by examining how forensic experts at four Big 5 professional service firms assess the factors specified in SAS No. 82. These assessments produced two different models of relative importance: (a) a statistical model (produced by the Analytic Hierarchy Process); and (b) a subjective model (based on subjects’ assessment of the relative weights). These models are then used to assess the self-insight of and the degree of agreement among the forensic experts. The results indicate that forensic experts have a moderately high degree of self-insight. A moderate to high degree of consensus among experts’ judgments about the relative importance of fraud risk factors was noted.

Reliance on Internal Audit Departments

Statement on Auditing Standards No. 9 (SAS 9) discusses the role of a client′s internal audit department (IAD) in the independent auditor′s examination. Despite the benefits of reliance on the client′s IAD to both the auditor and client, evidence indicates that SAS 9 has not been effectively implemented in practice. This article illustrates the use of the Analytic Hierarchy Process to develop a judgement aid for determining the overall reliance to be placed on a client′s IAD. The judgement aid illustrated may represent an initial step towards effectively implementing auditing standards requiring a great deal of subjective judgement in practice.