Thomas E. Vermeer

A new approach to improving and evaluating student workplace writing skills

Over the last twenty years, many studies have examined the impact of structured writing programs on improving accounting students’ writing skills. In this chapter, we extend this research by using writing assignments that are representative of the workplace writing experiences that students encounter in their professional careers, by developing an evaluation instrument to assess the effectiveness of structured writing programs, and by using business advisory board members to evaluate improvement in students’ writing. Our results suggest that our new approach to designing writing assignments representative of workplace writing helps students improve their writing skills. Our business advisory board members’ ratings indicate that the overall quality of the students’ writing improved over two semesters of completing a series of workplace writing assignments. Specifically, our structured writing program improved students’ business writing skills in the areas of organization (paragraph unity, layout, and conclusion) and style and tone (conciseness and word choice). Students also improved in their ability to explain technical aspects of accounting work and in certain aspects of spelling, punctuation, and grammar. The results and tools provided in this study should assist other programs in either implementing or improving a structured writing program.

Do CEO/CFO Certifications Provide a Signal of Credible Financial Reporting?

Over the last thirty years, numerous parties have discussed whether CEOs and CFOs should certify the appropriateness of their financial statements. Despite the interest in this issue, there is limited empirical research on whether a voluntary disclosure system for CEO\CFO certifications provides a signal of the credibility of financial reporting. In this study, I examine whether a voluntary disclosure system for CEO\CFO certifications provides a signal of the credibility of their financial reporting. I use the level of earnings management as the measure of the level of credible financial reporting. I find that firms that include a voluntary CEO\CFO certification on the appropriateness of the financial statements are less likely to practice income increasing earnings management. Section 302 of the Sarbanes-Oxley Act requires that CEOs and CFOs certify the appropriateness of their financial statements. The findings of this study suggest that Section 302 may provide value by enhancing the credibility of those companies that did not provide certifications under a voluntary system.

Going-concern modified audit opinions for non-profit organizations

Non-profit organizations constitute an important share of the U.S. economy, and recent audit failures and GAO findings highlight the importance of auditor reporting decisions in this sector. In this study, we examine going-concern modified audit opinions for non-profit organizations. Using audit opinion data for 3,567 non-profits exhibiting some signs of financial stress, we find that non-profits are more likely to receive a goingconcern modified opinion if they are smaller, are in worse financial condition, expend less on program-related activities, and have more internal control related audit findings. Our analysis of the subsequent resolution of the going-concern uncertainties suggest that only 27 percent of the non-profits receiving an initial going-concern modified audit opinion filed for dissolution in the subsequent four fiscal years. Our findings fill a gap in an important area that has received little research attention, and provide a useful benchmark for non-profits and their auditors.

The diligence of audit committees in the healthcare sector

Problems with governance at non-profit (NP) healthcare organizations have recently led to legislative scrutiny of their audit committee practices. Using data from a survey of chief financial officers of NP healthcare organizations and from the GuideStar database, we examine audit committee interactions with external auditors for a sample of 69 NP healthcare organizations. We find that 71% of the audit committees in our sample meet privately with the external auditor and the mean number of such meetings 1.9. Our results also suggest that audit committee interaction with the external auditor varies in response to resource dependencies, existence of debt, audit quality, audit tenure, and organizational size. These findings suggest that NP healthcare organizations respond to monitoring demands by adopting suitable audit committee related interactions.