Click on the grey bars below to view the concurrent education and research presentation sessions for Friday, June 2 and Saturday, June 3.
Sessions are subject to change.
Authors: Hong Fan*, Russell Fralich
This study seeks to differentiate the impact of CEO ties to two Chinese government institutions - the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC) - on CEO compensation in Chinese listed firms. Using archival data from the largest 200 state-owned enterprises and top 200 private-owned public-traded firms in China between 2003 and 2014, we found that compensation is higher for CEOs with NPC memberships, but CPPCC memberships had no effect. Outside board member ties to the NPC reduced the overpayment associated with CEO NPC membership.
Authors: Mark C. Anderson, Yan Ma*, Won-Yong Oh, Rong Zhao
We investigate how the compensation structure of the top management team (TMT) affects the firm’s competitive effectiveness under different strategies. We delineate the TMT compensation structure along two dimensions -the size of the CEO pay slice and the degree of pay dispersion among the CEO’s top team. Using Miles and Snow’s strategic typology, we find that the relationship between CEO pay slice and competitive effectiveness is more positive for firms following the Prospector strategy than for Analyzers. We also find that higher pay dispersion among the CEO’s top team is more harmful for both Prospectors and Defenders than for Analyzers.
Authors: Lisa Baillargeon*, Patrice Gélinas
This paper explores Canadian market data on CEO perquisites gathered by a large consulting firm over the period from 1971 to 2008. Perquisites are one of the least documented total compensation components in the academic literature on executive pay. Scant existing literature may be due to the relatively recent and limited corporate disclosures on CEO perquisites, as well as to the comparatively modest monetary value of perquisites relative to other total CEO compensation components. In this paper, we document a significant evolution in CEO perquisites practices over the period. Consistent with a nascent body of literature, this paper supports empirically hypotheses arguing that CEO perquisites do not uniquely occur as a result of an agency problem. Our results suggest that perquisites can also serve a legitimate, value-creating, business purpose for the benefit of shareholders.
Authors: Abhilash Sreekumar Nair, Suresh S. Kalagnanam*
Our study examines whether secondary stakeholders perceive the nonmarket insurance effect potentially arising out of a company’s CSR activities in the face of integrity-based negative events. We hypothesize a negative relationship between the net-negative sentiment score and investments in CSR, and between the sentiment score and several firm characteristics. Our results report a positive relationship between CSR outlays and (net) negative sentiment score, which contradicts the hypothesized inverse relationship and therefore the presence of nonmarket insurance effect. This suggests that CSR does not have the potential to offset the negative reputation accrued as a result of integrity-based negative events.
This session is generously sponsored by
the Stephen A. Jarislowsky Chair in Corporate Governance held by Michel Magnan, John Molson School of Business, Concordia University
the Stephen A. Jarislowsky Chair in Governance held by Claude Francoeur, HEC Montréal
Authors: Lisa Goh, Yue Li*, Feng Tang
This study examines whether firms committed to sustainability choose to abandon quarterly financial reporting voluntarily following the reporting regime change in Europe in 2013. We argue that corporate commitment to sustainability symbolizes management disapproval of short-termism. As such, firms with strong commitment to CSR would reduce financial reporting frequency to deter short-term oriented investors. Our results show that firms with superior CSR performance are more likely to abandon the quarterly Interim Management Statement (IMS) voluntarily. The findings in this study suggest that CSR performance symbolizes a firm’s long-term investments and management orientation towards sustainability affects firms’ financial reporting frequency decision.
Author: Dongyoung Lee
This study examines whether US-listed firms headquartered in tax havens engage more or less in corporate social responsibility activities. We find that corporate social performance is relatively lower for firms with tax haven headquarters than otherwise similar firms. A poor relationship with community stakeholders is also the main driver of the negative association between corporate social performance and the presence of headquarters in offshore tax havens. The findings show that when corporations contribute little to society in the form of taxes, they also largely forgo the opportunity to make social contributions to the larger community, despite the potentially greater availability of economic resources from offshore tax savings.
Authors: Alexander S. Edwards*, Adrian Kubata
This paper explains the previously documented decreasing trend in ETRs (Dyreng et al. 2016) assuming a linear tax function, where taxes paid are regressed on pre-tax income. A linear tax function distinguishes between average ETRs and the marginal propensity to tax (MPT); i.e., the slope coefficient on income. The intercept captures taxes paid effects that are independent of current income. Because ETRs and the MPT are ‘mechanically’ related, average ETRs will decline and converge towards the MPT when there is a positive intercept and growth in mean income. We provide evidence this is descriptive in the U.S. over the last 25 years.
Authors: Mark C. Anderson, Harun Rashid*, Hussein A. Warsame
We investigate how dividend payout policy is related to effective tax rates (ETRs), book-tax difference (BTD), unrecognized tax benefits (UTBs), and consequences of tax avoidance such as audit settlement (AS) and interests and penalties (IPs) imposed by the IRS. We find that dividend policy has significant positive (negative) relation with BTD (BOOK-ETR), and UTBs, indicating that it may induce managers to carry out a risky tax strategy. We also find dividend payout is positively associated with both AS and IPs arising from tax audits conducted by the IRS suggesting that some portions of the dividend induced UTBs are not sustained.
Authors: Jonathan Farrar*, Marina Rennie, Linda Throne
Distributive fairness and procedural fairness are believed to influence individuals’ compliance with authorities (Tyler 1990, 2006), including tax authorities (Wenzel 2002). Neither the tax literature nor the broader fairness literature have provided clear empirical evidence concerning the extent to which these dimensions interrelate in influencing taxpayers’ compliance-related assessments. Understanding this interplay is important for authorities, since the degree to which compliance-enhancing strategies can be synchronized using fairness depends on the relationship between these fairness dimensions. Accordingly, we conduct an experiment to explore the relationship between distributive fairness and procedural fairness, and their impact on tax compliance and legitimacy, using 389 adult American taxpayers. Collectively, our results suggest that distributive fairness and procedural fairness have independent, non-interactive influences on taxpayers’ compliance intentions. We also find that legitimacy mediates the relation between each type of fairness and compliance. Implications for tax policy makers and fairness researchers are discussed.
Authors: Chia-Chun Hsieh*, Kirill E. Novoselov, Xiaoquan (Michael) Zhang
This paper investigates the deliberative aspect of conference calls, which provide a public forum where corporate insiders and skeptically disposed experts (financial analysts) exchange opinions over a broadband communication channel. Building on the disclosure literature in economics and the deliberation literature in public policy, we predict that unusually high levels of deliberation, which we proxy by the number of analyst questions or manager-analyst exchanges over the course of the call, should be indicative of unexpected problems and thus should result in abnormally low short- and medium-term stock returns and abnormally high stock return volatility. Our empirical results are consistent with the theoretical predictions.
Authors: Ole-Kristian Hope*, Yi Li, Qiliang Liu, Han Wu
This paper studies China’s newspaper censorship of firm-level negative news, how government incentives and structures affect the censorship, and the impact of censorship on firms’ information environment. Censorship is difficult to study because the censored news is unobservable. We are the first to investigate an exact channel of censorship (i.e., newspapers) by making use of a rare setting in which many companies were involved in similar tunneling scandals and investigating newspapers’ differential tendencies of reporting on the scandals. We show that the censorship authorities restrict the dissemination of tunneling news on state-owned enterprises and firms with a greater number of employees. We also find that provincial-level publicity departments suppress or delay negative news on in-province firms, possibly driven by their incentives of local protectionism, while they moderately monitor negative news on out-of-province firms. Moreover, the tunneling news leads to negative market reactions and greater trading volumes, indicating that the news that survives the censorship has information content.
Authors: Jeffrey L. Callen, Mariem Khalifa, Samir Trabelsi*, Agnes Cheng
In this study, we examine whether managers of bankrupt firms are more conditionally conservative in their financial reporting relative to non-bankrupt firms. We also investigate the drivers of the cross-sectional difference in conditional conservatism among bankrupt and non-bankrupt firms. Using switching regression models and various measures of conditional conservatism, our results reveal bankrupt firms as more timely in recognizing bad news versus good news compared to non-bankrupt firms. Furthermore, the higher level of conditional conservatism in bankrupt firms is mainly driven by their higher levels of leverage and tax-reduction incentives. The cross-sectional analyses show these results largely hold for more leveraged firms and firms with higher tax costs. These results suggest that managers of bankrupt firms' tendency to be more conservative can stem from the agency problem between lenders and managers and from tax-decreasing motivations. Taken together, our study suggests that conservative accounting has a dark side as it does not benefit firms approaching bankruptcy.
Authors: Charles Shi, Inder Khurana, Chenkai Ni*
Using a comprehensive sample of 14,029 IPOs from 37 countries over a period of 1995 to 2014, we document that IPOs audited by Big 4 auditors are significantly less underpriced than those audited by non-Big 4 auditors. More importantly, we show that the Big 4 effect on IPO underpricing is driven by IPOs in countries with weak investor protection regimes. Our findings support the argument that global reputation concerns drive Big 4 auditors to provide a higher level of audit quality, and the differential audit quality matters most in the IPO markets where investors are least protected.
Authors: Jaeyoon Yu, Byungjin Kwak, Myung Seok Park,Yoonseok Zang*
We examine whether CEO/CFO outside directorships and resulting network ties to auditors affect audits. The network ties arise when the CEO/CFO of a firm (home firm) serves as an outside director of another firm that hires an auditor (connected auditor). Using a sample of firms that switch auditors over 2003-2012, we find that home firms are more likely to appoint connected auditors and that audit quality at home firms significantly declines after hiring connected auditors. The negative effect of hiring connected auditors is more pronounced when the connection is via the same auditor office or audit committee membership.
Authors: Baolei Qi, Ping Zhang*
This study examines the validity of the conclusions on individual auditor quality estimated using four audit-outcome based measures. Since the true quality of an auditor is not directly observed, the validity of an estimation conclusion on an auditor quality cannot be tested by using the true quality as a reference. In this paper, we test the validity of the conclusions obtained from four audit quality estimation models by using the conclusions as each other’s references. Our empirical evidence suggests that the four models do not provide coherent identifications of individual auditors’ quality.
Authors: Wally Smieliauskas*, Russell Craig, Joel Amernic
This paper analyzes the accounting reasoning of two expert accounting witnesses at the 2006 trial of Enron executives who testified that the financial reporting of Enron conformed fully with US generally accepted accounting principles [GAAP]. We analyze the experts' evidence using argumentation theory to highlight important issues in the reasoning process underlying financial reporting as support for our critique of the IASB's proposed 2015 Conceptual Framework. We make two recommendations. First, that a CF should be allowed to override any detailed standard whenever that standard results in untruthful/unethical reporting. This effectively means that the CF should be installed at the top of any GAAP hierarchy as the dominant item guiding standard setting and professional practice. Second, that the concept of "faithful representation' should invoke the concept of "verifiably acceptable levels of accounting risk' in order to incorporate the notion of truthfulness of forecasts in accounting estimates.
Authors: Michel Magnan, TieMei Li*, Yaqi Shi
This study investigates whether cross-listing in the U.S. markets plays an important role in enhancing the financial reporting quality of offshore firms. We employ a sample of firms registering subsidiaries in offshore financial centers (OFCs) during the period 2002-2013 and find that offshore firms cross listing in the U.S. exhibit a lower absolute value of abnormal accruals, higher accrual quality and more persistent earnings patterns compared to offshore firms not-cross-listing in the U.S., thus supporting the bonding hypothesis. However, the positive association between cross listing and financial reporting quality is negatively moderated by the legal institutions of the OFCs where offshore firms operate their subsidiaries. This finding suggests that to better detect opportunistic earnings management by foreign firms, regulators and investors should enhance their monitoring efforts for firms with opaque and complicated structures that emanate from countries where their subsidiaries are located.
Authors: Divya Anantharaman, Li He*
This study examines how regulatory oversight affects firms’ internal control weakness disclosures. Our results indicate that the SEC’s comment letters addressing internal control disclosure deficiencies increase the target firm’s propensity to disclose material weaknesses in internal controls in the subsequent fiscal period. This regulatory scrutiny only affects firms that do not presently disclose material weaknesses. Comment letters addressing other financial statement issues do not appear to have such effect. We also provide some evidence that internal control-related comment letters have a spillover effect on the internal control weakness disclosures of peer firms that do not receive 10-K comment letters.
Authors: Tri Nguyen*, Chau Duong, Suneetha Narendran
Most widely-used models to detect earnings management rely on firms' characteristics, but they fail to consider the profile of top managers. Since CEOs have overall responsibility for firms' performance, they could influence statements presenting the financial performance, financial position and cash flows of their firms. Based on empirical evidence, this research constructs a composite score – PSCORE - to signal the presence of earnings management, using data collected from the curriculum vitae of CEOs. PSCORE has nine factors which cover financial expertise, reputation, internal power and age of CEOs. We find PSCORE is positively correlated with discretionary accruals, abnormal cash flows, production costs, and discretionary expenditures, and deviations of the first digits of figures reported in financial statements from what are expected by Benford's Law. Associations between PSCORE and other established proxies remain statistically significant after controlling for key determinants of earnings management such as equity issuance and firm characteristics. The findings have implications for practitioners, especially external auditors and boards of directors.
Authors: Hui Chen, Evgeny Petrov*
Stock price often provides firms with new information, which can be used in subsequent real decisions. We find that the manager overstates his report more in the presence of such feedback effect, but this misreporting brings forth both positive price and real effects for the firm. Intuitively, overstating the report encourages information production in the market because (a) it renders accounting reports less reliable and (b) investors expect higher trading profits from larger capital investment. The new incremental information improves investment efficiency when it is revealed to the firm manager through trading and used in the firm's subsequent investment decisions.
Author: Albert Kwame Mensah
Mapping reported PPE impairment amounts (i.e. write-downs and reversals) to only valid directions in legitimate triggers specified under benchmark impairment rules (IAS 36 and SFAS #144), I investigate whether managers' impairment decisions are justified. Finding evidence of nonconformity to rules, I quantify this as ORAI (i.e. opportunistic reporting of asset impairment) and document that target beating, smoothing, small profits, and other managerial intents drive ORAI while governance mechanisms mitigate it. I find evidence of "earnings management (EM) planning' in jurisdictions allowing both write-downs and reversals such that the write-down tool achieves downward EM in period t but is followed in future periods by upward EM achieved via the reversal tool. I consider this as incremental contribution to literature, but a more novel contribution which this study brings is the linking of managers' reversals decisions to impairment rules to detect impairment rules deviators.
Details of the panel discussion are forthcoming.
The participation of scholars in this panel discussion is generously supported by
The Corporate Reporting Chair, ESG UQÀM, held by Denis Cormier
The goal of the Corporate Reporting Chair is to contribute to the development of fundamental and applied research on all matters pertaining to the quality of financial and non-financial information disclosed by organizations and its relevance to stakeholders.
Presenter: Penny Kinnear
Instructors already incorporate a number of effective teaching strategies in their classrooms. This participatory session will focus on identifying those strategies and leveraging them to support professional language development among multilingual students. This includes strategies for moving students from “everyday” expressions to the discipline-specific professional language of accounting in both oral and written modes.
Authors: Rui Ge*, Nicholas Seybert, Feida Zhang
This paper investigates the impact of investor sentiment on conditional accounting conservatism. We find that companies recognize economic losses more (less) timely in earnings during periods of high (low) investor sentiment. Further, the sentiment-conservatism relationship is stronger for firms with greater sentiment-price sensitivity, which confirms that investor sentiment drives the fluctuation in accounting conservatism observed in the paper. We also show that high investor sentiment increases the probability of subsequent lawsuits, and that the sentiment-conservatism association is stronger for companies with higher litigation risk, suggesting that litigation plays an important role in the sentiment-conservatism relationship. Overall, our results suggest that companies report earnings more conservatively in response to high investor sentiment so as to mitigate negative future outcomes resulting from sentiment.
Authors: Andrew M. Bauer*, Xiaohua Fang, Jeffrey A. Pittman
We analyze whether tough tax enforcement generates a positive externality by lowering information asymmetry stemming from managers' bad news hoarding activities evident in stock price crash risk. Supporting this prediction, we find a negative relation between the threat of an IRS audit and stock price crash risk. Our strong, robust evidence is consistent with recent theory that outside investors learn more about firms when corporate tax enforcement is stricter. In evidence consistent with another prediction, we find that the role that IRS audit rates play in constraining crash risk intensifies when firms experience worse agency conflicts stemming from CEO characteristics. Overall, our research implies that external monitoring by tax authorities protects shareholders against managers suppressing negative firm-specific information that engenders stock price crash risk, particularly when CEOs have a wider scope and stronger incentives to hoard bad news.
Authors: Jae B. Kim*, Jonathan Sang-Wook Nam
In this study, we examine whether the adoption of SFAS 158 has any effect on the mispricing of the funding status of pension plans. We find that the overvaluation of firms with severely underfunded pension plans, as reported by Franzoni and Marin (2006), is no longer observed in the years after the adoption of SFAS 158. In addition, we find that the mitigating effect of SFAS 158 adoption on the mispricing of the funding status of pension plans is more pronounced for firms with a larger amount of off-balance-sheet disclosed pension liabilities. Overall, our results suggest that SFAS 158 has a positive effect on investors' valuation of the funding status of pension plans, particularly due to the requirement for previously disclosed pension liabilities to be recognized on the balance sheet.
Authors: Ulrich Menzefricke, Wally Smieliauskas*
In this archival study we report three main findings related to auditability of pension accounting estimates. 1. The financial note disclosures of ranges of estimated returns are miscalibrated and provide low credibility of including either the actual or expected returns. 2. The estimated returns are unreliable estimates of the firms’ actual ten-year averages. 3. In some years, the estimated returns have significant risk of material misstatement arising from the uncertainty in the estimation process over the short run. The combination of these findings indicates that the estimates and estimation processes related to estimated returns in pension accounting are not auditable.
Authors: Ibrahim Aly*, Manmohan Rai Kapoor
This study takes an empirical look at the three-way comparison of different learning environments (online, flipped, and in-class) for an Introductory Managerial Accounting course. Learning outcomes were measured using scores from assignments, examinations, and overall class performance. The results showed students registered in the online section outperformed those attending the flipped and traditional lecture classes. The findings suggest that Flipped-class and online learning pedagogies are more than a mere change in the delivery mode. To be successful, they need intense preparation. The heart of the Flipped Classroom is student engagement, including responsibility for self-learning. No pedagogical approach, of course, fits all students alike. Students should not, therefore, be in any doubt about what to expect before registering for the class. Since the acquisition of critical reasoning skills is not a single-step process but a continuum, future researchers need to focus on senior students with exposure to these pedagogical approaches from the beginning of their university studies.
Authors: Sid C. Bundy, Partha S. Mohapatra, Matthew Thomas Sooy*, Dan N. Stone
What contributes to graduating PhD student research output and initial placement quality in the market for North American new accountancy faculty? Analysis of data from the 2012, 2013, 2014 Accounting PhD Rookie Recruiting and Research Camp suggests candidates' graduating pedigree is emphasized conditionally among candidates with no "A" quality research output, but not among candidates with "A" research output. Graduates of private universities are less likely to produce "A" research output during their PhD program, but private school candidates without "A" research output place better than similar candidates from public universities. Lastly, North American candidates place higher than do their international counterparts. Given only about 20 percent of graduates have published research, whereas all candidates have pedigree, graduating pedigree may proxy for long-term research output potential. The presented evidence suggests the market for new accounting faculty evidences both aristocratic (pedigree-based) and meritocratic (productivity-based) influences on accounting scholars' first jobs.
Authors: Wenxi Yan*, Eduardo Schiehll
This study examines the board role as a potential missing link, and investigates the moderating effect of board attributes on the board role/firm performance relationship. Based on hand-collected board meeting report data of 1054 Chinese listed firms, we classify board activities into control and service role. We find that the control role positively influences firm market performance (Tobin’s Q). This association is stronger with greater proportion of outside directors on board. The service role is negatively related to Tobin’s Q, but positively associated with the firm operational performance (sales growth). This association becomes stronger when boards comprise high functional diversity.
Authors: Amina Ehab Sobhy, Ehab K. A. Mohamed, Mostaq M. Hussain*
The objective of this paper is to examine the relationship between corporate governance and Bank performance in Asia. The study is based on two hundred and twenty six banks from the period of 2009-2013. The results reveal that ROA is positively affected by director ownership, bank size, bank type, and leverage; however there is negative relationship between ROA and audit committee and board independence. ROE is positively affected by director ownership while negatively affected by audit committee, board independence, ownership concentration and duality. NIM is negatively affected by remuneration committee, while positively affected by board activism and duality.
Authors: Mark C. Anderson, Rajiv D. Banker, Dmitri Byzalov, Soonchul Hyun*
An important challenge in management accounting is linking innovation activities to financial performance. There are two main concerns. One is that innovation activities affect financial performance through many intermediate stages. The other is that the value creation process of innovation depends on organizational context and strategy. We address these concerns by tracing the paths from innovation activities to financial performance at the establishment level. We document that improvements in productivity, quality and customer satisfaction are intermediate stages linking product and process innovation to financial performance. In more detailed analysis, we demonstrate how the paths differ across strategic positions.
Author: Jimmy Yu*
2003 to 2014 for the US airline industry to investigate how asymmetry in airline firms’ cost behavior is associated with firm-specific business competitive strategies: service differentiation or cost leadership. Using revenue passenger miles as an activity-based cost driver for non-fuel operating costs, I document that cost behavior of full service carriers (FSCs) is sticky but cost behavior of low cost carriers (LCCs) is not sticky. In separate analyses, I also test for stickiness of non-monetary measures of resources utilized instead of dollar-value operating costs. I find that both the number of employees and the number of flights are sticky with respect to RPMs for FSCs but are not sticky for LCCs.
Authors: Songsheng Chen, Qingqing Liu, Tao Ma, Li Yao*
We find that during the pre-audit period, analysts’ earnings forecast errors are positively correlated with earnings adjustments required by auditors, suggesting that analysts do not fully account for managers’ attempts in aggressive accounting practices that are subsequently corrected by auditors. This positive association in the pre-audit period is less pronounced for firms with a larger concentration of analysts from top brokers and for firms with higher institutional ownership, suggesting that the presence of institutional investors and larger brokerage houses improves analysts’ ability in anticipating aggressive accounting practices.
Authors: Artyom Durnev, Claudine Mangen*
We explore the association between a company's investment and the tone of its peers' MD&A disclosures; we ask whether the direction and the strength of this association is affected by product market competition. We find that the direction of the association can differ according to whether the investing company and its disclosing peers have positive or negative interdependencies. The strength of the association varies with product market fundamentals: we document that the association is stronger when entry costs are lower, the product market is larger, and products are stronger complements or weaker substitutes. Our results regarding investment generally carry over to investment efficiency.
Authors: Hyun A. Hong, Ji Woo Ryou, Anup Srivastava*
A lender's incentive to monitor a client's activities declines after receiving insurance on its loan via a credit default swap (CDS). The client can then shift from safe to risky assets, inducing a wealth transfer from lenders to shareholders. We do not find support for this proposition, on average, arguably because of managers' risk aversion. However, for firms with managers whose wealth increases convexly with firm assets, we find different results. Firm's investment and financing policies significantly change following CDS trading. We find shifts from safe to risky assets and increases in dividend payouts.
Authors: Ling Chu, Robert Mathieu, Chima Mbagwu, Bruce J. McConomy*
We examine an indirect cost of pollution and related environmental liabilities by assessing Asset Retirement Obligations (AROs) from a loan pricing and credit rating perspective. Using a sample of 485 U.S. companies that disclosed AROs for the period from 2001 to 2013, we find that AROs are not priced by banks but do affect companies’ credit ratings. A possible explanation for this finding is that the obligations are seen as long term and are generally not settled before the maturity of typical bank loans. However, AROs have an inverse relationship to credit ratings. We also discuss potential policy implications.
Presenters: Glenn Skrubbeltrang, Brock University; Kristen Vanderkooy, Digital Solutions Manager, Wiley
Presenters: Marta Samokishyn and Sandy Hervieux, St. Paul University
The extended English version of this session is presented as an Education Workshop on Thursday June 1. Please see the Professional Development Day schedule for details of the English session.
Millennials are fast-paced learners, who prefer multitasking and want to be “connected” anytime and anywhere. Many of us struggle to find a variety of teaching tools and methods that will maximize their engagement.In this workshop, we explore different beliefs about classroom behaviours and learning preferences of millennials.Through this hands-on workshop, you will:
Participants will require a laptop for this session.
Come experience innovative accounting activities created and presented by our award winning educators!
1st Place: External Audit Simulation: "A Different Audit Every Time" by Stephen L. Bergstrom, MBA, CPA, CMA, Accounting Faculty, School of Business, SAIT Polytechnic
Imagine being able to create an interactive, semester-long project that's more than just a case study but, is a hands-on simulation of an external audit that allows for every student to be using different data. Also imagine that this will only take you minutes to create using Excel. Sound too good to be true? It's not! Come find out how you too can create and begin using this innovative activity in your audit course.
2nd Place: Advanced Management Accounting Sustainability Case Presentation by Steve Janz, CPA, CGA, MBA,Accounting Faculty, School of Business, SAIT Polytechnic
Find out how this practical, results-oriented innovation in teaching goes beyond theory and elevates a student's understanding and sense of accomplishment in dealing with the real world problem of balancing financial wealth with environmental sustainability. Find out how to take experiential learning to the next level by providing your students with an opportunity to research, explore, and apply advanced management accounting knowledge to existing and unresolved corporate sustainability challenges.
Authors: Alan J. Richardson*, Andrei Sandu
We examine the evolution of policies, programs and products at a voluntary association - the Canadian Academic Accounting Association (CAAA) - between 1976 and 2015 to understand the tension between community and market institutional logics. We focus on the role of diffuse agency in managing institutional tensions and identify how the CAAA created institutional hybrids that blended market-oriented products with its core community building mission of advancing Canadian academic accounting education and research. The de facto "social enterprise" structure of the CAAA that has emerged to manage these conflicting institutional logics leaves a series of tensions that have not been resolved.
Authors: Sina Bahramirad*, Ron Baker
We study the accountability of a local public-sector organization to its' citizens. The single case study presented here was conducted on a local municipality in Ontario, Canada over an 18-month period. Within the course of conducting this study, implementation and execution of a reform towards "enhancing" government efficiency and accountability were in process. This initiative, known as Open Government, involved a framework with principles of Innovation, Participation, Transparency, and Accountability. This implies the provision of more information with easy accessibility to the citizens, which is supposed to make the government "more transparent and accountable" to the citizens. The case identifies that traditional forms of accountability are being augmented by forms of horizontal accountability in which the possibility of reward or punishment is indirectly enacted. Such forms enable the traditional forms of accountability to function.
Authors: Hubert de La Bruslerie, Julien Le Maux*
The purpose of the paper is to propose an original proprietary proxy of a firm's litigation risk. We extend the scope of litigation risk outside of the conflicts with shareholders and the domain of security litigation. We demonstrate that the source of the risk of litigation can be found in the firm's policies and in its management's operational or strategic decisions, even if a sector conditioning effect exists. Based on a sample of 1051 M&A transactions between 2000 and 2013, we provide evidence that the level of litigation risk, at the acquirer's level, has a positive and significant impact on the takeover premium. We also provide evidence that a significant relationship exists between the acquirer's litigation risk and the means of payment.
Authors: Jingyu Yang*, Yangxin Yu, Liu Zheng
Prior literature suggests that stock-based compensation is a double-edged sword, encouraging managers to exert productive effort but also inducing them to manipulate financial reporting. Exploiting exogenous reduction in litigation threat by the 1999 ruling of the Ninth Circuit Court of Appeals, we examine how the weakened litigation environment affects CEO' compensation design. Consistent with the theoretical prediction that the concerns for misreporting prevent companies from providing more powerful incentive pay that is otherwise optimal, we find that firms headquartered in Ninth Circuit states decrease CEOs' equity portfolio vega after the ruling. We also show that the reduction is more pronounced for firms with higher litigation risk and firms with lower institutional ownership.
Authors: Mahfuz R. Chy*, Barbara Su
We examine whether and how auditor litigation risk affects debt contracting using state-level staggered shocks to auditor legal liability. We argue that a firm's accounting information becomes more contractible following an increase in auditor litigation risk because higher auditor legal liability better incentivizes auditors to provide unbiased opinions on the firm condition. Further, higher auditor litigation risk for audit failures is more likely to better align the interests of debtholders and auditors because auditors and creditors both have asymmetric payoff structures. Based on these arguments, we predict and find that an increase in auditor litigation risk leads to (1) an increase in the use of accounting-based covenants in bank loan contracts, and (2) firms' better access to private lending market. Our findings inform the policy debate on the appropriate level of auditor legal liability.
Authors: Feng Chen*, Jere R. Francis, Yu Hou
A surprisingly large number of companies change their audit engagement office within the same audit firm. This study investigates whether such companies engage in audit opinion shopping behavior. Adopting the empirical framework in Lennox (2000), we examine this issue using the U.S. data over 2000-2015. Our findings suggest that companies successfully improve going concern audit opinions through audit office switch decisions. Moreover, the above-mentioned empirical finding is stronger when opinion shopping involves larger audit offices, industry specialist offices, and offices in the same metropolitan areas. To investigate the nature of opinion shopping, we find that successful opinion shoppers tend to choose audit offices with low Type I errors, and they exhibit higher earnings quality than non-opinion shoppers. Overall, our evidence suggests same-firm office-switching behavior is driven by the client's desire for better audits and more accurate audit opinions.
Authors: Lan Guo, Kun Huo*, Theresa Libby
We conduct an experiment where two subordinate employees compete in a tournament and a superior employee benefits from their effort contributions. The two subordinates can collude by providing a low level of effort, which increases their own payoffs at the cost of the superior. We manipulate horizontal pay dispersion (i.e., the ex-ante fixed wage gap between the subordinates) and vertical pay dispersion (i.e., the ex-ante fixed wage gap between the subordinates and their superior). We find that both horizontal and vertical pay dispersion reduce the collusion success rate and increases reneging on collusive agreements among subordinates.
Author: Susanna Gallani
Organizations often introduce temporary incentive programs with a view of establishing long lasting behaviors. In this study, I explore whether and how organizational behavior modifications introduced via temporary incentive programs persist beyond the incentive period. I compare the persistence of behavior modifications between subjects rewarded with a monetary award and subjects that are exposed uniquely to peer pressure. Using hand hygiene performance data from a California hospital, I find that monetary incentives are associated with greater performance improvements during the incentive period, but are relatively short lived, while implicit incentives facilitate a longer persistence of the organizational behavior modification.
Authors: Ole-Kristian Hope*, Heng Yue, Qinlin Zhong
China’s “Rule 18” was issued to prohibit government and party officials from serving as directors for listed firms. The regulation led to a large number of politically connected directors' resigning from their roles. We find that, compared to propensity-score-matched control firms, the accounting quality of firms with politically connected directors increases after Rule 18, and that the effect is stronger for non-SOE firms than for SOE firms. We further examine potential channels and find that connected firms have better access to preferential financing and are under lax regulations, which reduce firms’ incentives to provide transparent information.
Authors: Claire Deng*, Kiridaran Kanagaretnam, Zejiang Zhou
This paper explores the influence of geographic proximity of independent directors on reducing listed firms’ fraudulent and noncompliant practices. Through the analyses of A-share listed firms in China between 2007 and 2013, we find that local independent directors reduce both the frequency and magnitude of the misconduct in listed firms. Furthermore, we find that political connections of independent directors reduce the effect of local independent directors’ monitoring function, whereas the higher ratio of female independent directors enhances the monitoring effect.
Authors: Chia-Chun Hsieh*, Shing-Jen Wu
This paper investigates whether the disclosure and external assurance of Corporate Social Responsibility (CSR) reports enhances earnings informativeness. We hypothesize that voluntary CSR reports provide investors with more current and future information about a firm’s prospects, leading to higher stock returns. Using a sample of Taiwanese firms during 2005 and 2012, we show that firms that disclose CSR reports indeed show higher future earnings response coefficients (FERC). However, assurance on CSR report do not enhance the positive relationship between CSR disclosure and FERC, implying that investors do not value the information regarding CSR assurance.
Authors: Charles P. Cullinan, Lois S. Mahoney, Linda Thorne*
This article explores managers' tendency to invest in CSR from a quiet life perspective by comparing CSR investment between dual- and single-class firms and examining the degree to which managerial entrenchment in dual-class firms is associated with firms' investment in CSR. Dual-class ownership generally confers greater voting control on insiders; consequently, managers are insulated from external monitoring. We found that dual-class firms invest less in CSR than their single-class counterparts and that dual-class firms' investment in CSR decreases with the level of managerial entrenchment. Our findings are consistent with the quiet life hypothesis that suggests that firms invest in CSR in response to pressure from public shareholders, and that, in the absence of external pressure, managers prefer to avoid decisions involving risk, which includes avoiding investing in CSR.
Authors: Dennis Y. Chung, Karel Hrazdil*, Jiri Novak, Nattavut Suwanyangyuan
Using a comprehensive sample of actively traded US companies, we analyze how the quantity of information in corporate disclosures affects the efficiency with which investors incorporate newly arriving information into stock prices. Specifically, we consider both numerical and textual levels of detail provided in 10-K disclosures: (1) disaggregation (numerical) quantity (DQ) that captures the "fineness' of accounting line items in 10-K filings and (2) textual quantity (TQ) that captures the amount of "soft' or narrative information in annual reports, and document that both DQ and TQ are associated with reduced information asymmetry, lower cost of immediacy, higher trading activity, and an overall improvement in the efficiency of information price discovery. Collectively, our results provide empirical support for the benefits of detailed corporate disclosure, whether numerical or textual.
Author: Helen Hurwitz
This study investigates whether investor sentiment is associated with behavioral bias in management forecasts of annual earnings that are generally issued fairly early. I find that management forecast optimism increases with investor sentiment and it is more pronounced for firms with high uncertainty. Furthermore, I provide evidence this sentiment-related forecast bias is more likely to be unintentional. I also find that management forecast optimism is negatively related to firms’ future returns and the negative relation between investor sentiment and future returns disappears after controlling for management forecast bias, suggesting that biased management earnings expectations contribute to sentiment-driven stock misvaluation.
Presenter: Anna Czegledi, Conestoga College
This interactive educational session will focus on how to introduce real company financial data to enhance students learning experience for Advanced Financial Accounting and Advanced Finance classes and reduce the gap between accounting education and practice.
By the end of the session, attendees will have new practical ideas to include into their teaching to help students to develop their ability to analyze data and see “the big picture”. There will be an opportunity for participants to share ideas during a roundtable discussion.
Presenter: Denis Gendron, UQAM
The internal control field goes along with several other disciplines such as governance, management control, risk management and accounting. In the academic world, it is often approached as a governance sub-discipline and it is regularly taught as a component of the external audit.
This session will address questions such as: What is the influence of the internal control teacher’s profile on his/her teaching? How can we increase the links between teaching internal control and management accounting? Should internal control be taught separately from external audit and governance, or integrated into it? After a brief presentation, participants will discuss the above questions.
Presenter: Irene Wiecek, Rotman School of Management
Accounting standards continue to evolve and we all do our best to keep on top of everything. Irene will highlight the top 10 things you need to know in terms of recent changes to IFRS and ASPE. She will look at practical ways to incorporate these changes into the curriculum as well as some fun things to get students excited about embracing the constantly evolving IFRS/ASPE landscape. It is not about adding more to your curriculum but more about repositioning. In all the minutiae – there are some basics. Let’s get together and talk!
Authors: Michel Magnan, Yaqi Shi, Haiping Wang*
Using U.S. banking holding company data between 2007 and 2014, this study examines the association between fair value accounting and the cost of debt, and the impact of auditor industry expertise on this association. Results suggest that greater use of fair value accounting measurement in the financial statements is generally associated with a higher cost of debt, which supports the argument that fair value accounting is subject to lower reliability. Findings further show that Level 2 and Level 3 fair value inputs are related with a higher cost of debt, indicating that the lack of reliability is primarily driven by Levels 2 and 3 estimates. In addition, we do not find that auditor industry expertise improves the decision usefulness of fair value accounting information.
Author: Lucas Mahieux
This paper investigates the optimal accounting treatment of an illiquid financial asset in an agency model. The value of the asset can be measured using noisy observable market inputs (Level 2) and unobservable inputs (Level 3). Interestingly, Level 3 reporting is only used when the insiders' private information is good information on top of observable inputs to give them incentives to behave. I study the optimal fair value accounting standards in an equilibrium with multiple firms and externalities. Level 2 reporting increases comparability of financial statements compared to Level 3 reporting but may lead to inefficient contagion effects. This is an important tradeoff for standard setters and prudential regulators. Finally, manipulation of the insiders' private information and insiders' litigation/reputation risks for mispricing reduce the use of Level 3 reporting in equilibrium.
Author: Stephani A. Mason
We examine the relation between disclosure compliance with the 2008 amendment to IFRS 7 and several monitoring characteristics such as auditor specialization, analyst following, and institutional investors using a sample from the S&P 1200 of firms from 32 developed countries. We hypothesize that specialist auditors, analysts, and institutional investors do not constrain disclosure non-compliance. Additionally, we examine the relationship between disclosure compliance and fair value exposure and find that greater exposure results in greater disclosure compliance. Our results show that reporting practices continue to differ systematically across countries despite the use of a common accounting standard.
Authors: Paul André*, Fani Kalogirou
We investigate the impact of countrywide adoption of IFRS on the liquidity of domestic versus international firms. We consider two competing forces affecting liquidity from IFRS adoption: enhanced comparability of firms within industries and less tailoring of financial reporting to meet local investor needs. For Canada, we find that liquidity increased for non-US international firms but decreased for Canadian domestic firms, consistent with trade-offs between international comparability and localization. We also compare liquidity before and after IFRS adoption for domestic and international firms listed in Canada with liquidity before and after IFRS adoption for firms listed in Australia and U.K.
Authors: Paul A. Griffin, Hyun A. Hong*, Ivalina Kalcheva, Jeong-Bon Kim
This paper finds that the introduction of mandatory IFRS and other concurrent regulatory changes reduce the return predictability of equity short selling. This reduction in return predictability is particularly evident for shifts in the demand and supply of shorting in the months before a negative earnings announcement. Consistent with the Miller (1977) theory of stock price overvaluation, we find that the reduction in return predictability of shorting around the adoption of mandatory IFRS relates to narrowed differences of opinion among investors and laxer short selling constraints after the mandate.
Authors: Shahid Ali Khan*, Mark C. Anderson, Hussein A. Warsame, Michael Wright
Authors: Weili Ge, Dawn Matsumoto, Emily Jing Wang*, Jenny Li Zhang
We examine the stock market consequences of restatements for U.S. listed foreign firms. We find that, among firms that engage in irregularities, foreign firms experience significantly more negative market reactions following restatement announcements than U.S. firms. Moreover, we find that the market reactions are more negative for foreign firms from countries with greater differences in accounting standards from the U.S., countries with weaker auditing and accounting enforcement environments, and countries with weaker rule of law traditions. Finally, we provide evidence of a geographic contagion effect as non-restating firms from the same country also experience significant stock price declines following restatements.
Authors: Jian Kang, Catalin Starica*
How do earnings attributes affect investors expectations about future earnings reflected in market prices? We separate the contribution of current earnings to price setting through a valuation incorporating expectations informed only by the current value of earnings. Its pricing error measures the extent to which expectations are shaped by information other than current earnings. We estimate the association between this pricing error and eleven earnings quality constructs commonly used in the empirical literature using a sample of US non-financial firms over the period 1971-2014. We find that, above all, quality earnings vary little (are sustainable) and are predictive of future earnings.
Authors: Ashish Sood, Anup Srivastava*, Birendra K. Mishra
Firms regularly face a dilemma - whether to extract profits from the past investments or to invest further in value creation. Prior research calls this tradeoff strategic emphasis, and examines it by subtracting R&D expenses from advertising expenses. This investigation appears incomplete for three reasons. First, more than 75% of listed firms report no R&D and advertising expenses. Second, R&D expenses are often strategically underreported. And third, an increasing proportion of resources are invested on customer relations, human resource capabilities, and organizational capital. We address these limitations by more comprehensive identification of value appropriating and creating activities from SG&A expenses. We then propose a new measure of organizational emphasis to complement strategic emphasis. We find that unexpected shifts from value creation to value appropriation decreases a firm's market value, contrary to prior research finding. Yet, firms are better off harvesting value in periods of unusually good performance. The stock market's response to shifts in firm strategies differs based on the firm's economic circumstance and investment opportunity set.
Author: Nattavut Suwanyangyuan
This paper extends earlier research on the determinants of audit fees by introducing more refined measures of reporting complexity as important determinants of audit fees. Specifically, I measure reporting complexity using both the net 10-K document file size and the disaggregation quality of accounting data to capture textual and numerical levels of information in annual reports, respectively. I document that both reporting attributes are positively associated with higher audit fees, suggesting that more efforts are needed to audit longer and more detailed 10-K reports. More importantly, I show that of the big 4 accounting firms, PwC not only charges higher audit fees, but also audits firms with longer and more detailed disclosures in 10-K reports. Collectively, these results indicate that the unique influence of PwC audits not only affects the pricing of the audit services but also the extent of information to be disclosed in the financial reports.
Authors: Angélique Malo*, Anne Fortin, Sylvie Héroux
Using the 4I conceptual framework for organizational learning (Crossan et al., 1999) (intuiting, interpreting, integrating and institutionalizing), we analyze how assurance standards updates introduced in Canada in the 2000s were taken into account in the organizational processes of small- and medium-sized accounting firms. Interviews with 33 accounting firms reveal that these entities use organizational processes to monitor standards updates and analyze them in light of the needs of the firm to determine the changes to make to the firm’s routines. Assurance standards updates published in the 2000s required new procedures, new work tools and structural changes. These changes drove up the price of auditing, resulting in audits being changed to review engagements, with the banks’ approval.
Authors: Ahrum Choi, Jeong-Bon Kim, Jay Junghun Lee*, Jong Chool Park
This paper investigates whether and how external governance from the takeover market affects audit fees. We hypothesize and find that audit fees decrease significantly after the passage of international M&A laws because the external governance strengthened by the takeover law reduces the agency risk perceived by shareholders. We also find that the disciplinary effect of M&A laws is more pronounced in countries with stronger investor protection and for the clients with lower audit risk and the clients of Big 4 auditors. Our findings contribute to the literature by enhancing our understanding about auditors’ assessment of clients’ risk and auditor-client contracting.
Author: Evgeny Petrov
I study the impact of informed trading on voluntary disclosure. If disclosure is costly, then informed trading reduces disclosure. Since traders can discover favorable information about the firm, additional disclosure of the information is not necessary. If managerial information is valuable for the firm, then informed trading increases disclosure. Since traders can discover unfavorable information about the firm, the manager with such information has less incentives to pool with uninformed managers and discloses to show that he is informed. Additionally, informed trading can have a positive/negative real effect by crowding in/out information production in the firm.
Authors: Kai Chen, Darren Henderson*, Christine I. Wiedman
We examine changes in voluntary disclosure of balance sheet and cash flow (BS/CF) information in earnings releases around restatement announcements. These disclosures are relevant to restatements since they help investors assess accruals and reporting quality when information uncertainty is high. Using 2,029 restatements, we find that BS/CF disclosures drop significantly following restatement announcements. The drop is most evident for severe restatements and for firms with high ex-ante litigation risk. Furthermore, we find that earnings response coefficients (ERCs) are significantly lower following restatement announcements only for firms where disclosure decreased, suggesting that reduced disclosures partially explain the noted post-restatement ERC drop.
Authors: Xu Jiang, Baohua Xin*
Discretion pervades the accounting rules. We explicitly model accounting discretion and earnings management in a disclosure setting to study the interaction between management’s voluntary disclosure and the subsequent mandatory disclosure of value-relevant information. We show that, in equilibrium, allowing the manager to have some discretion over the mandatory financial reports may enhance the informativeness of the more-timely voluntary disclosure – it enables investors to better assess the quality of the management and the future prospects of the firm in a more timely manner. Thus there may be a hidden benefit of granting some limited discretion in firms’ mandatory reports.
Authors: Irene M. Gordon*, Jamal A. Nazari
The 2002 Sarbanes-Oxley Act (SOX) was meant to bring legitimacy back to stock markets and to improve the ethics of corporate executives and auditors. The passage of fifteen years provides an opportunity to consider this legislation's effect on academic research. In this paper we examine the SOX based academic business ethics literature. Our paper contributes broadly to the academic business field as compared to previous more discipline specific papers. We supplement the academic literature by examining the scope of SOX topics and detail how reliant business ethics research is on SOX. We identify trends in this literature over the preceding 15 years and provide evidence of the broad theoretical frameworks to better understand the breadth and depth of theories used in this body of research. We use our results to pinpoint potential under-researched SOX related topics in the business ethics literature that may provide future research opportunities.
Authors: Michael J Wynes*, Pamela R. Murphy
In this study, we examine how offering an apology for fraud influences investors negative affect, trading behavior, and legal behavior. We compare the efficacy of apology against two other communication strategies: blaming a third-party for the fraud (scapegoating), or offering “no comment.” We provide evidence that how organizations respond to an accounting fraud significantly influences investors’ negative affect and retaliatory behavior but has minimal effect on their investment behavior. Conversely, we show that organizational responses to embezzlement fraud only influences trading behavior. These results have implications for individuals charged with repairing an organization's relationship with investors during a crisis.
Authors: Paulina Arroyo*, Nadia Smaili
The following study has three objectives. First, we draw a snapshot of the evolution of whistleblowing research. Second, we review the concept of whistleblowing from a regulatory perspective through the examination of whistleblowing regulations in five countries. Finally, we examine whether the way in which both perspectives view whistleblowing has evolved at the same pace and whether these changes have implications for progress in the study of whistleblowing. Our analysis shows that Near and Miceli’s (1985) definition of whistleblowing is incomplete and narrow by today’s standards, not to mention out of step with regulators’ needs.
Authors: Ole-Kristian Hope, Jingjing Wang*
Prior literature finds mixed evidence on how firm-level information asymmetry changes after accounting big baths. While big baths can improve the information environment and reduce information asymmetry, big baths can also degrade the information environment and obscure operating performance. In this study, we examine the role of management ethics. Specifically, we investigate whether managers’ truthfulness (or conversely, deceptiveness) affects how investors perceive big baths. Using linguistic analysis on earnings conference calls and employing a difference-in-differences research design with propensity-score matching, we find that information asymmetry is significantly higher following big baths taken by deceptive CEOs, compared with big baths taken by less deceptive CEOs.
Authors: Tota Panggabean, Yasheng Chen, Johnny Jermias*
We use an eye-tracking device to measure information search behavior of individuals while evaluating Balanced Scorecard data. We showed that participants who were involved in the initial implementation of BSC were motivated to search for information in a more directive way, compared to those who were not involved in the implementation. We also showed that individuals who receive a dissenting opinion access a wider range of information by employing a sequential search. We discovered that individuals who employed a directive search were more likely to rate the new strategy as a success than those who employed a sequential search.
Authors: Feng Chen, Xingqiang Du, Shaojuan Lai, Mary L. Z. Ma*
From the sociolinguistic perspective, this study examines whether honorific and actual-name appellations that Chinese auditors use to address clients in audit reports, connote differential financial misstatement risk. Specifically, we hypothesize that auditors’ use of honorifics signals their inferior social status relative to their clients, thereby leading to compromised auditor independence and higher financial misstatement risk. We find significantly higher likelihoods of and significantly larger magnitudes of financial misstatements for companies addressed by honorifics than for their counterparts addressed by actual names. Moreover, compared to auditors’ consistent honorific usage, discretionary honorific usage has an accentuated positive association with misstatements. We further show that the positive association between honorific usage and client misstatement risk is weaker when the audit firm is one of Top 10 accounting firms in China, an industry specialist, formed as a partnership, or resides in a more concentrated audit market. This study contributes to the sociolinguistics literature in accounting, and provides evidence supporting the reform proposed by the International Auditing and Assurance Standards Board (IAASB) to enhance the usefulness of audit reporting.
Presenter: Nancy Michaud, UQAR
This session will be presented in French.
This education session focuses on the use of interest-oriented teaching strategies and aims to share innovative ideas to teach audit at the undergraduate level. These include multimedia tools developed by a team of teachers in line with the relatively new concept of the "flipped classroom". In this context, students must study theoretical concepts outside of class time. Then, the teacher can use classroom time to implement other instructional strategies that enhance student involvement in the classroom.
Another strategy presented focuses on the use of a pedagogical training firm to carry out a partial audit simulation. This last strategy allows students to realize, in a concrete way, a part of the auditor work.
This session addresses the use of practical situations created by the teacher to develop students' competencies with different audit concepts, and presents tips and tricks for operationalizing the teaching of these strategies.
Presenter: Lisa Jack, University of Portsmouth, UK; President, British Accounting and Finance Association
Presenters: Lori Weatherbie and Kathy Letourneau, CPA Canada
In this session, CPAC Board of Examiners staff will speak to candidate performance on the Common Final Examination (CFE) and PEP staff will speak to what it is doing to address those weaknesses.
CPAC staff will use the CFE report to guide the discussion and elaborate on the specific strengths and weaknesses discussed in the report, and use some examples to illustrate/further support the discussion. Evaluation staff will also discuss some of the “pitfalls” we see in the candidates’ writing techniques and strategies, and make suggestions as to how this high-stakes examination should be approached. PEP staff will discuss the changes that have been made in the Core and Elective modules, in both online learning materials and face-to-face workshop activities to strengthen candidates' performance of the CFE.
Authors: Mark P. Kim, Spencer Pierce, Ira Yeung*
We investigate whether firms releasing their annual earnings at an unexpected delay engage in more last-minute earnings manipulation. We use firms’ changes in effective tax rate (ETR) between the third and fourth quarter to capture last-chance earnings management. We find that unexpected delays in announcements are associated with larger last-minute tax accrual adjustments which increase income. This association is strongest for announcement delayers beating consensus analyst forecasts. Our results provide the first empirical evidence supporting the theory of Trueman (1990). Our results suggest that news quality, in addition to news content, predictably covaries with unexpected delays in annual earnings announcements.
Authors: Joseph P. Faello*, Seungjae Shin, Ajeet Jain
A tension exists in the research of goodwill impairment losses. On the one hand, researchers find goodwill impairment losses improve earnings’ predictability of cash flows and stock returns. On the other hand, goodwill impairment losses have been linked to opportunistic management behavior. This study fills a gap in the literature by examining firms’ goodwill impairment losses during a period of economic prosperity. Results do not support the informative role of goodwill accounting and suggest firms use goodwill write-offs as part of a broader earnings management strategy.
Authors: Like Jiang, Michel Magnan, Lixin (Nancy) Su, Shafu Zhang*
Authors: Dongning Yu*, Soonchul Hyun, Mark C. Anderson
A signal used in fundamental analysis may have different implications for future earnings under different circumstances. We use firm life cycle as a conditioning variable for fundamental analysis, and investigate how implications of fundamental signals in evaluating firm performance vary according to life cycle stage. Using a sample of 81,613 firm-year observations from 1989 to 2014, we find that fundamental signals based on accounts receivable, capital expenditure, labor force, inventory, SG&A costs, and gross margin, are differentially informative about firm value across life-cycle stages. Our findings provide insights about the use of accounting data in evaluating firms.
Author: Kaleab Y. Mamo
This study examines the effect of financial reporting transparency for securitization on banks’ lending decisions. I hypothesize that transparency affects bank lending decisions through its effect on bank stakeholders’ ability to monitor and discipline bank risk-taking. Using loan-level data from the Home Mortgage Disclosure Act database and FASB securitization accounting pronouncements as transparency shocks, I find that securitizing banks originate riskier mortgages following accounting pronouncements that allow more opacity and less risky mortgages following pronouncements that enhance transparency. Moreover, I show that manager-shareholder alignment, regulatory constraints, and market discipline moderate the effect of transparency on bank lending decisions.
Author: Luc Desrousseaux
Does the presence of activist hedge funds influence their target firms towards more aggressive reporting choices? The monitoring role of these sophisticated shareholders is currently at the center of a heated debate amongst academics and practitioners. Using a unique proprietary shareholder activist database and several earnings quality proxies on a sample of US-listed firms, this paper sheds light on this debate. Our results corroborate public perceptions regarding their short-term stance. We find evidence that activist hedge funds influence financial reporting practices of their investees towards more reporting aggressiveness, thereby providing no support for their claimed monitoring benefits.
Authors: Hyun A. Hong*, Jeong-Bon Kim, Steven R. Matsunaga, Cheong Yi
In this study we investigate how business group affiliation affects tax avoidance in a global setting. The business group structure should facilitate tax avoidance by allowing the ultimate owner to transfer resources and income across group firms. However, such activities are likely to incur nontax costs. In this paper we identify three potential non-tax costs (minority shareholder protection, agency costs, and political costs) that are likely to differ across two key characteristics—a country’s market development and legal origin. We find that, compared with standalone firms, business group firms exhibit greater tax avoidance in countries with developed economies or code law systems, where the nontax costs are lower and lower tax avoidance in countries with emerging economies or common law systems, where the nontax costs are higher. Our results provide insights into the business group ownership structure and the impact of a country’s legal origin and economic development on corporate tax avoidance.
Authors: Mark C. Anderson, Sina Rahiminejed*, Harun Rashid, Hussein A. Warsame
We examine the empirical association between customer satisfaction and tax avoidance. Customer satisfaction is a valuable intangible asset for most firms. On the other hand, tax avoidance is considered a socially undesirable corporate practice, which may harm firm reputation. Therefore, we argue that firms that focus on satisfying customers will avoid engaging in excessively risky tax policies. Using American Customer Satisfaction Index score (ACSI) as a measure of customer satisfaction, we find that customer satisfaction has a negative association with uncertain tax benefits (UTB). This finding is supported by a positive relation with cash effective tax rate and a negative relation with interests and penalties imposed by the Internal Revenue Service (IRS) upon tax audit. Taken together, we conclude that firms that are more concerned about customer satisfaction and reputation have a higher likelihood of avoiding tax aggressive activities.
Authors: Amna Chalwati*, Elizabeth Demers, Samir Trabelsi
This study examines the association between shareholder governance, real earnings management and IPO failure. Using a sample of 7,244 IPOs firms that went public over the period of 1993-2015, we document that real earnings management is positively associated with IPO failure which suggests that in the presence of deteriorating firm performance and to avoid the risk to meet their financial obligations managers engage in real activities management. In addition, we find that weak shareholders governance is positively associated with IPO failure. Taken together, these results suggest that poor governance structures in failed firms open the door for the manipulation of real activities and increase the operational risk. Our findings are of greatest interest to potential investors, but also to others stakeholders that would be affiliated with a firm going public – an auditor, an underwriter, the lawyers who consult with the firm, employees or executives who might consider joining that firm.
Authors: Hangsoo Kyung, Albert Tsang*
We examine the effect of divergence in the sentiments of a firm’s media coverage resulted from interpretation of corporate news, on properties of analyst earnings forecasts. Our results reveal that the level of a firm’s MSD is associated with higher analyst forecast accuracy and less optimistic forecast bias after controlling for the level of media coverage. Overall, our findings support the argument that better analysts’ information processing due to divergent media sentiment has a positive effect on analyst forecast properties. Thus, our study provides new insights into the mechanism by which the media affect market participants.
Authors: Cristina Bailey, Steve Buchheit*, Kevin Kim
We investigate how presentation modality (text vs. video) and executive gender influence investor’s perceptions of management competence and the future performance potential of that manager’s company. Consistent with recent labor market research (Shroeder and Epley 2015), seeing and hearing (rather than reading) identical information from a CEO improves the competence assessment of the CEO; however, this result is largely gender dependent. We find modest evidence that the male-advantage is reduced in a ‘feminine’ industry (e.g., retail clothing). Having a male (but not female) CEO on video is also associated with improved future company performance assessments.
Authors: Bruce Lagrange*, Chantal Viger
The purpose of this study is to determine whether emotional intelligence (EI) is a moderating variable in loan officers’ information processing. To answer the research question, an experimental investigation was conducted and participants’ judgments and decisions were examined in light of three methods of disclosing contingencies. Participants indicated their judgments and decisions in regard to the following four variables: the overall risk rating, the overall trend rating, the loan granting decision and the interest rate decision. Three different types of disclosure of contingencies were used as independent manipulated variables. Results regarding the impact of EI as a moderating variable, whether in relation to disclosure method and loan officers’ judgments or the relationship between their judgments and decisions, do not indicate that loan officers’ EI has a significant moderating effect on these relationships.
Authors: Leslie Berger*, Theresa Libby, Alan Webb
We examine the effects of tournament horizon and percentage of winners on social comparisons and performance in a multi-period setting. We predict that because relative performance feedback is more meaningful in grand tournaments compared to repeated tournaments, individuals will engage more in social comparisons. By engaging more in social comparisons, we also predict performance will be higher in grand versus repeated tournaments. Finally, we predict that repeated tournaments will be more effective at sustaining effort when the percentage of winners is high, but grand tournaments will be more effective when the percentage of winners is low. Results support all of our predictions.
The Residual Earnings model has informed the capital market research over the last twenty years. To empirically employ it, researchers commonly make extra assumptions about how future RE can be related to and predicted by today's observed numbers. In this article we show how the RE valuation relation can be estimated without a priori assumptions on how observable data projects future earnings. The linkage between informative current values and expectations of future abnormal earnings is consistently inferred from the data. By letting the data speak we eliminate the risk of misspecifying the mechanism of expectation formation through unfitting assumptions.
Authors: Wolfgang Schultze*, Christina Manthei-Geh
Literature suggests that individuals have endogenous preferences for accounting conservatism due to intrinsic loss aversion. This paper provides first experimental insights on individuals’ endogenous preferences for conservative compared to neutral accounting. Preliminary findings suggest that in a judgment context based on innate loss aversion, individuals value conservatism more highly than neutrality. In a choice setting, we investigate individuals’ explicit preferences. We find evidence that individuals do not consciously prefer conservatism when presented with both options. The results imply that a disregard of endogenous preferences for conservatism can have detrimental economic consequences, such as a lower willingness to invest.
Authors: B. Louise Hayes*, Efrim Boritz
Using machine learning, we classify the audit experience, finance experience and accounting education of chief financial officers (CFOs) of S&P 1500 companies for the period 2006-2015. We find that companies with CFOs with audit (finance) experience have a lower (greater) likelihood of restatement relative to companies with CFOs without audit (finance) experience and that an accounting education without audit experience is not associated with the likelihood of restatement. This study develops an automated, labour-saving, transparent, replicable, and scalable text analytics approach to classifying CFOs based on machine learning that can be used in future research.
Authors: Philip Beaulieu*, B. Louise Hayes, Lev M. Timoshenko
We investigate the relationship between changes in accounting estimates and subsequent restatements. Depending on the reason for an estimate change, this relationship can be either negative (changes made in response to new developments or management obtaining new information) or positive (changes made with an objective of managing earnings or changes that are not reliably estimated and poorly audited). We hypothesize and find a positive relationship between changes in estimates and restatements, except for small loss companies, where it is negative. A prediction that a change in estimate(s) is associated with an increased likelihood of subsequent intentional restatement is marginally supported.
Authors: Sung S. Kwon*, H. Semih Yildrim
This article investigates the value-relevance of earnings and financial analysts' fundamental signals identified by prior research. We document four primary findings. First, consistent with claims in the accounting literature, the value-relevance of "bottom line' earnings has declined over time. Second, the combined value-relevance of earnings and financial analysts' fundamental signals has also declined over time. Prior studies in this line of research generated mixed evidence. In other words, some previous studies support an increase and some others find a decrease in the value-relevance of book values of net assets (common equity) over time. This study focuses on financial analysts' fundamental signals, not book values of net assets, and the change in the degree of the value-relevance of those signals over time. Third, we find a negative correlation between firms' excess returns and regulations such as SOX and Dodd-Frank, which is consistent with some prior studies' claims that the implementation costs of the regulations may exceed their benefits to shareholders of the corporations affected by the regulations. Finally, we also report the levels of opportunistic earnings management, reflected in some of those fundamental signals, have declined after these regulations.
Authors: Conor Brown, John Harry Evans, Donald V. Moser, Adam Presslee*
We identify differences in performance measurement precision between jobs as an important, yet previously unidentified, source of pay dispersion. We use two experiments to examine the effect of such performance measurement induced pay dispersion and of its subsequent reduction on lower-paid employees’ effort. In Experiment 1, we find that such pay dispersion decreases lower-paid employees’ effort by decreasing their perceived pay fairness. In Experiment 2, we find that reducing such pay dispersion increases lower-paid employees’ effort by increasing their perceived pay fairness. Implications for practice and theory are discussed.
Authors: Georgios Farfaras*, Ivan Stetsyuk
We use an agency model with moral hazard and adverse selection to study the effect of a mentor's ability on the compensation of his mentees. An agent who is trained by a mentor of higher ability receives valuable experience that increases not only his productivity but also his output sensitivity to effort. In the model's equilibrium, the greater productivity translates into higher total compensation, and the greater output sensitivity of effort leads to stronger incentives. We test these predictions by using data from college football coaches and we find strong empirical support for the hypotheses. Football coaches who have previously worked as assistants to head coaches of superior ability are on average more productive. We find that a 1 percent increase in mentor's performance (our proxy for mentor's ability) increases head coach's total compensation by $7,800. Finally, head coaches who had better mentors received on average stronger incentives in the form of bonus payments, a result that is consistent with the model's predictions.
Authors: Mandy M. Cheng, Tami Dinh, Wolfgang Schultze, Maria Assel*
We examine the impact of deferred bonus payments and clawbacks on managers’ self-interest in two experiments. Consistent with construal level theory, we find that bonus deferral increases managers’ willingness to make a bonus-decreasing investment by encouraging managers to place greater importance on advancing their company’s long-term interests and on improving their reputation within the company. The second experiment examines the combined effect of bonus deferrals and clawbacks on managers’ willingness to exert personally costly effort to advance their company’s interests. Our study contributes to the debate on effective managerial compensation.
Presenters: Shauna Roch, Penny Parker
This session explores the use of educational technologies, and best practices in teaching and learning through the application of the Technology Integration Matrix. Participants will be introduced to the matrix which provides a framework for defining, and evaluating technology integration to enhance learning. Participants will explore the characteristics of meaningful learning environments, and levels of technology adaption and apply them to their own teaching practices. Attendees will also participate in an active discussion on how matrix progression can be achieved to foster student ownership in learning. Practical examples will be explored. This session is designed for those teaching in technology enabled or online courses. Please come prepared with a mobile device to collaboratively share in the experience.
Presenter: Stephen Bergstrom, SAIT
One of the easiest ways for students to cheat on exams or assignments is by copying answers from their friends or neighbors. An obvious solution to the problem is to give each student a unique assessment, with different questions or parameters than their classmates; but who has the time to create so many different copies of an exam or assignment? This session will demonstrate how you can use some simple functions in Microsoft Excel (such as RAND() and RANDBETWEEN() ) to randomly generate different assessments (and answer keys to go with them!) with relatively little long-term effort.
Presenter: Steve Janz, SAIT
The Process of Learning Model (POLM) provides a step-by-step guide to develop and integrate peer instruction, flipped classroom, flipped assessment, collaborative learning and experiential learning within your classroom environment. Participants will discuss the influence of Constructivist Learning Theory in student learning; identify metacognitive enhancing strategies for student pre-class work and post-class engagement.
Authors: Jean-François Henri*, Marc J. F. Wouters
Evidence for the relationship between management control (MC) practices and innovation is somewhat mixed, notably because of the typical conceptualization of innovation in the management accounting literature and the insufficient attention devoted to the type of information provided by MC practices. This exploratory study investigates to what extent the coexistence of MC practices providing a mix of information for decision-making supports or impedes successful innovation. More specifically, we investigate whether the diversity of nonfinancial performance indicators and the sophistication of costing information specifically and jointly contribute to successful product innovation, and whether strategy influences those effects. Survey data collected from a large sample of manufacturing firms show that although MC practices can explicitly support successful product innovation, their coexistence in providing a mix of information for decision-making can hamper that success, particularly for organizations for which product innovation acts as the key strategic driver.
Authors: Jimmy Smith, Ian Burt*, Michael Gentile
The unstable financial landscape of intercollegiate athletics is an issue that institutions struggle with. Athletic administrators are not clear about the financial issues in intercollegiate athletics and the athletic accounting practices of their institutions. Given that Lawrence, Gabriel and Tuttle (2010) and Lawrence (2013) offer a solution by mandating the use of ABC, it is unknown what administrators think about this. Therefore, the purpose of this study is to ask administrators their perspectives on NCAA accounting practices. Specifically whether or not they use ABC to help understand costs and to determine why they do or do not use ABC. Our results demonstrate that most athletic departments don’t use ABC mainly because they don’t see the need for the detailed information ABC provides. This paper provides an overview of what athletic departments are doing to understand costs and it refutes prior research claims that ABC would be useful to athletic departments.
Author: Anup Srivastava
This study examines the construct validity of commonly used measures of real activity manipulation (RAM) and evaluates their relative merits. Portions of selling, general, and administrative expenses (SG&A), research and development (R&D), and production costs that cannot be explained by current revenues, but differ from industry peers, are considered measures of RAM. A significant amount of R&D and SG&A outlays, however, are made in expectation of future, not current, revenues. Hence the unmatched parts of R&D and SG&A could represent a firm's unique competitive strategy, achieved via intangible investments, but they might be misinterpreted as RAM.
Authors: Naqi Sayed*, Camillo Lento
Performance measurement is important for strategy development, mission achievement, and shareholder value creation. Environmental consulting firms are becoming increasingly important to society, but, tend to face significant challenges in measuring performance due to the intangible and complex nature of the services they provide. This study utilizes the Balanced Scorecard Perspectives and a DEMATEL methodology to identify and understand the key performance indicators of environmental consulting firms in order to develop a strategy map. Our study shows that Learning and Growth is a dominant cause factor for environmental consulting firms, with Internal Process also playing an important role.
Authors: Stephanie F. Cheng*, Ole-Kristian Hope, Danqi Hu
This paper provides initial evidence on the impact of entry costs on service fees in the audit industry, using a quasi-experimental setting, where the recent staggered passage of mergers of three Canadian accounting bodies has relaxed the licensing restriction to enter the public-accounting industry. Using difference-in-differences tests with fixed effects for client firms, audit firms, and provinces, we find that the approval of the merger reduces both audit fees and non-audit fees, and the reduction in fees is mediated when other barriers than obtaining a license to enter the industry exist, but amplified when clients have greater bargaining power.
Authors: Maryam Firoozi*, Michel Magnan
In recent years, legislative and regulatory authorities in several countries have devolved several responsibilities to audit committees and their members, especially in terms of negotiations with a firm`s auditors (e.g., SOX, Section 301). In this paper, we investigate how audit committee members' geographical residence affects audit fees. The location of audit committee members is important, since recent regulatory reforms such as SOX and board diversity initiatives have caused companies to nominate board and audit committee members from different geographical areas to meet regulatory requirements. In addition, globalization and improvements in technology have made it easier for firms to nominate non-local directors. Our results show that firms with more local audit committee members pay lower audit fees. There are at least two possible explanations for our findings; from the supply side, auditors may assign a lower risk to companies with more local audit committee members. From the demand side, local audit committee members may have more negotiation power than non-locals over audit coverage and audit fees due to access to soft information. Our results are robust to endogeneity and alternative explanations.
Authors: Leah Baer, Yonca Ertimur*, Jingjing Zhang
We examine the director labor market outcomes for executives who are allegedly involved in governance failures ("tainted" executives), firms' decision to appoint tainted executives as outside directors, and investors' perception of these decisions. Using securities class action lawsuits as our proxy for governance failures, we find that tainted executives involved in high-severity (low-severity) lawsuits are more likely to lose (gain) a directorship than non-tainted executives. Smaller, younger firms and firms that likely benefit from the executives' industry knowledge are more likely to appoint tainted executives. Thus, while some tainted executives experience negative director labor market consequences, others are able to obtain outside directorships, albeit in less reputable firms, either because they bring advisory skills that these firms value or because they are perceived to be friendly to management. The market reaction to the appointment of tainted executives is, on average, negative.
Author: Sa-Pyung Sean Shin
This paper examines the interplay between takeover defenses and shareholder activism. Using a comprehensive sample of shareholder activism events between 2006 and 2014, I find a differential impact of takeover defense measures on the likelihood of being targeted for activism; a dual-class structure or a staggered board deters activism, whereas firms with a poison pill in place are more likely to become targets. Activists are more likely to demand removal of takeover defense measures and/or sale of the target firm if the firm has a staggered board or a poison pill in place, suggesting that when takeover defenses block the market for corporate control, activists promote changes through their interventions. I also find that target firms with takeover defenses are more likely to remove those defenses and more likely to be acquired following activism, which suggests that activism can act as an antidote to takeover defenses. Finally, while many target firms adopt a poison pill in response to activist approaches, I do not find evidence that it makes for an effective defense.
Should an audit firm provide non-audit services (NAS) to its audit clients? Without using the classic argument of knowledge spillovers, the paper shows that it can be optimal for the investors of a firm to let the auditor provide NAS. This is a consequence of an incentive externality: the possibility of providing NAS ex post increases the auditor's ex ante incentives to exert audit effort. Despite this externality, the provision of NAS may optimally decrease audit quality. The paper studies the negative impact of this decrease in audit quality when two firms in the same industry rely on peers' financial statements. Contingent audit fees on unfavorable audit opinions may reduce this negative informational externality. Using a dynamic framework, the paper shows that, because of reputation effects, the auditor provides more NAS and audit quality is lower in booms than in recessions.
Authors: Ana Cristina Marques*, Ana Calado Pinto
In this article we study the determinants of (i) audit services' public procurement criteria, and (ii) the audit fees of Portuguese municipalities. Our dataset is unique, resulting from merging new survey data with data that is not usually publicly available. We find that the majority of municipalities acquire auditing services based upon the lowest price selection criterion. However, this practice is less frequent in municipalities with higher public procurement sophistication and with higher political competition. Our analysis of the audit fees charged indicate these are higher in municipalities with more sophisticated procurement processes, higher political competition, and more citizens' interest. Audit fess are also lower in municipalities with an internal auditing office.
Author: Carol Pomare
This paper aims at discussing the reliability of financial reporting for financial instruments within a context of financial institutions in North America. Critical steps are identified in line with three areas: (i) making financial reporting a risk management tool relevant within a context of market frictions and associated volatility of corporate performance for financial institutions in North America; (ii) identifying negative exemplars of major crisis for financial institutions in North America; and (iii) institutionalizing these negative exemplars by embedding financial instrument into standards setting within a context of market frictions and associated volatility of corporate performance.
Authors: Christian P. R. Pietsch*, William F. Messier
This study experimentally examines the effects of time pressure on nonprofessional investors’ belief revisions and short-term investment decisions. We find that investors experienced significant time pressure simply by asking them to make a decision as fast as possible even when the time available to make the decision is equal to the time usually required to make such a decision. Investors who experienced greater time pressure had greater motivation but also more stress. Time pressure and the resulting motivation and stress had a significant effect on investors’ stock price judgments and investment decisions. Significantly more participants in the low time pressure condition decided to invest in the company’s stock short-term, compared to participants under relatively higher time pressure. We identify several variables (e.g., risk attitude, education, and gender) affecting investors’ experienced time pressure, motivation, stress, and stock price judgments and investment decisions.
Authors: Ron Baker*, Morina Rennie
Net debt (liabilities minus financial assets) is a measure of fiscal sustainability that has been reported in Canada's public accounts since the country's earliest days. It created (and continues to create) a particular visibility of the "effectiveness" of Canada's financial management and of the country's financial position at a particular point in time, but also impacts future political policy. We examine this visibility in relation to key underlying economic and political occurrences that shaped, and were shaped by, this indicator. This study shows how this financial measure changed and was sustained over time, and influenced by the political context in which it was situated. We see evidence that the net debt measure is losing prominence with the changeover to full accrual accounting.
Authors: Walid Ben-Amar*, Qiu Chen, Shujun Ding, Quon Tony
We examine and find that governments use accounting information, more specifically program and administrative ratios, differently in the two stages of their funding decisions to nonprofit organizations. In the first stage where governments screen organizations to be funded, nonprofit organizations with higher administrative ratios are more likely to be selected for funding. However, in the second stage where governments allocate money among selected organizations, both accounting ratios do not play a significant role in determining the value of the funding granted. We further find that governments react negatively to low quality accounting ratios in their funding decisions.
Presenter: Sarah Keys, CPA Canada
A changing climate gives rise to a variety of organizational issues including operational, financial and strategic planning concerns. Professional accountants have a critical role to play in how organizations respond in managing risk and opportunity and creating a more resilient organization.
This session will show accountants how to recognize risks and opportunities of climate change and how their CPA competencies are relevant in responding to climate change. The seminar will be interactive. It will include a mix of large and small group discussion and case study work.
The course draws on material from a multi-year initiative sponsored by CPA Canada and Natural Resources Canada and managed by the Network for Business Sustainability.
Presenter: Susan Rae Hurley, NAIT
This workshop will appeal to those who have considered using lecture capturing software but are not necessarily comfortable in its implementation and/or application. The focus will be on the use of Echo 360 as an authoring tool, student access platform and classroom analytics tool, with the primary purpose of communicating advantages and disadvantages of this learning model.
Julie Robson, CPA, CA, CPA (Illinois)Robert Harding Teaching Fellow, Tax Professor, Associate Director Master of Accounting Program
School of Accounting and Finance, University of Waterloo
Nathalie Johnstone, FCPA, FCAUniversity of Saskatchewan
Noreen Irvine, BSc, CMCHaskayne School of Business, University of Calgary
Sue Deakin, MAcc, CPA, CA
Fanshawe College, Lawrence Kinlin School of Business
Students are increasingly using technology for all aspects of their lives. How do we harness that digital familiarity to keep them engaged in the classroom, while saving you valuable preparation time? Is it possible to make teaching tax fun? Join this session to see how!
In this session, our panel will discuss tips and techniques that have worked for them – from first year tax and accounting courses, to post-graduate courses. Techniques are in line with the CPA Canada emphasis on skills such as: reading and interpreting legislation; conducting tax research; and undertaking in-depth problem analysis through case studies. For each, you’ll learn practical methods to try in your own classroom, and variations for different skill levels.
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