Audit Knowledge and Accounting Conservatism: A Case of Executives’ Vocational Learning and Application

Bin Li; Muze Peng; Yingkui Zhang

doi:10.12973/eurasia.2017.01043a

Full Text (PDF)

Bin Li ¹ ^* , Muze Peng ¹, Yingkui Zhang ¹

More Detail

¹ School of Economics and Management, Beijing University of Chemical Technology, Chaoyang District, Beijing 100029, P.R. China^* Corresponding Author

Abstract

This study examines the relation of audit knowledge and accounting conservatism based on the case of executives’ vocational learning and application. The empirical results reveal the evidence of a negative relation between executives’ audit knowledge and accounting conservatism. Further analysis indicates that the impact of executives’ audit knowledge on accounting conservatism is only robust in companies without CEO duality. The results imply that companies with executives who have audit knowledge may adopt aggressive accounting policy and reduce the accounting conservatism of financial reports.

Keywords

audit knowledge
accounting conservatism
CEO duality

License

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Article Type: Research Article

EURASIA J Math Sci Tech Ed, 2017, Volume 13, Issue 9, 6101-6112

https://doi.org/10.12973/eurasia.2017.01043a

Publication date: 23 Aug 2017

Article Views: 2128

Article Downloads: 883

Open Access References How to cite this article

References

Ahmed, A. S., & Duellman, S. (2007). Accounting conservativeness and board of director’s characteristics: an empirical analysis. Journal of Accounting and Economics, 43(2), 411-437.
Ahmed, A. S., & Duellman, S. (2013). Managerial overconfidence and accounting conservatism. Journal of Accounting Research, 51(1), 1-30.
Anderson, R. C., & Reeb, D. M. (2003). Founding—family ownership and firm performance: evidence from the S＆P 500. Journal of Finance, 58(3), 1301-1328.
Ball, R., Kothari, S. P., & Robin, A. (2000). The effect of international institutional factors on properties on accounting earnings. Journal of Accounting and Economics, 29(1), 1-51.
Ball, R. (2001). Infrastructure requirements for an economically efficient system of public financial reporting and disclosure. Brookings-Wharton Papers on Financial Services, 127-169.
Basu, S. (1997). The conservatism principle and the asymmetric timeliness of earnings. Journal of Accounting and Economics, 24(1). 3-37.
Chen, C. C., Jones, K. T., & Moreland, K. (2014). Differences in Learning Styles. CPA Journal, 84(8), 46-51.
Dietrich, J. R., Muller, K. A., & Rieldl, E. J. (2007). Asymmetric timeliness tests of accounting conservatism. Review of Accounting Studies, 12(1), 95-124.
Dowdell, T. D., & Krishnan, J. (2004). Former audit firm personnel as CFOs: Effect on earnings management. Canadian Accounting Perspectives, 3(1), 117-142.
Duellman, S. (2006). Evidence on the role of accounting conservatism and corporate governance. North Dakota: North Dakota State University.
Francis, B. B., Hasan, I., Park, J. C., & Wu, Q. (2015). Gender differences in financial reporting decision making: evidence from accounting conservatism. Contemporary Accounting Research, 32(3),1285-1318.
Geiger, M. A., North, D. S., & O’Connell, B. T. (2005). The auditor-to-client revolving door and earnings management. Journal of Accounting, Auditing and Finance, 20(1), 1-26.
Geiger, M. A., & North, D. S. (2006). Does hiring a new CFO change things-an investigation of changes in discretionary accruals. The Accounting Review, 81(4), 781-809.
Geiger, M. A., Lennox, C., & North, D. S. (2008). The hiring of accounting and finance officers from audit firms: how did the market react? Review of Accounting Studies, 13(1), 55-86.
Givoly, D., & Hayn, C. (2000). The changing time-series properties of earnings, cash flows and accruals: Has financial reporting become more conservative? Journal of Accounting and Economics, 29(3), 287-320.
Givoly, D., Hayn, C. K., & Natarajan, A. (2007). Measuring reporting conservatism. The Accounting Review, 82(1), 65-106.
Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2),193-206.
Hannes, K., Raes, E., Vangenechten, K., Heyvaert, M., & Dochy, F. (2013). Experiences from employees with team learning in a vocational learning or work setting: A systematic review of qualitative evidence. Educational Research Review, 10, 116-132.
Hsiung, B. (2013). Guanxi: personal connections in Chinese society. Journal of Bioeconomics, 15(1), 17-24.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.
LaFond, R., & Watts, R. L. (2008). The information role of conservatism. The Accounting Review, 83(2), 447-478.
LaFond, R., & Roychowdhury, S. (2008). Managerial ownership and accounting conservatism. Journal of Accounting Research, 46(1), 101-135.
Lennox, C. (2005). Audit quality and executive officers’ affiliations with CPA firms. Journal of Accounting and Economics, 39(2), 201-231.
Lennox, C., Wu, X., & Zhang T. (2016). The effect of audit adjustments on earnings quality: evidence from China. Journal of Accounting and Economics, 61(2-3), 545-562.
Li, B., Han, F., Liu, J. (2017). KM Theory Applied in Accounting and Statistics Education: Case on the Cost of Debt. Eurasia Journal of Mathematics, Science and Technology Education, 13(8), 4847-4856. doi:10.12973/eurasia.2017.00968a.
Naiker, V., & Sharma, D. S. (2009). Former audit partners on the audit committee and internal control deficiencies. The Accounting Review, 84(2), 559-587.
Nonaka, I., & Takeuchi, H. (1995). The knowledge-creating company. New York: Oxford University Press.
Nonaka, I. (1994). A dynamic theory of organizational knowledge creation. Organization Science, 5(1), 14-37.
Phornprapha, S. (2015). People Passion programme: Implementing an innovative workplace learning culture through professional development-the case of KPMG Thailand. International Review of Education, 61(6), 795-814.
Roychowdhury, S., & Watts, R. L. (2007). Asymmetric timeliness of earnings, market-to-book and conservatism in financial reporting. Journal of Accounting and Economics, 44(1), 2-31.
Różewski, P., Jankowski, J., Bródka, P., & Michalski, R. (2015). Knowledge workers’ collaborative learning behavior modeling in an organizational social network. Computers in Human Behavior, 51, 1248-1260.
Ryan, S. G. (2006). Identifying conditional conservatism. European Accounting Review, 15(4), 511-525.
Villalonga, B., & Amit, R. (2006). How do family ownership, control and management affect firm value? Journal of Financial Economics, 80(2), 385-417.
Watts, R. L. (2003). Conservatism in accounting part I: explanation and implication. Accounting Horizons, 17(3), 207-221.
Watts, R. L., & Zimmerman, J. L. (1978). Towards a positive theory of the determination of accounting standards. The Accounting Review, 53(1), 112-134.
Watts, R. L., & Zimmerman, J. L. (1990). Positive accounting theory: A ten year perspective. The Accounting Review, 65(1), 131-156.
Wang, T. S. (2013). Design and assessment of joyful mobile navigation systems based on TAM and integrating learning models applied on ecological teaching activity. Eurasia Journal of Mathematics, Science and Technology Education, 9(2), 191-200.
Wu, Y. W., Lin, Y. A., Wen, M. H., Perng, Y. H., & Hsu, I. T. (2016). Design, analysis and user acceptance of architectural design education in learning system based on knowledge management theory. Eurasia Journal of Mathematics, Science and Technology Education, 12(11), 2835-2849.
Zhang, J. (2008). The contracting benefits of accounting conservatism to lenders and borrowers. Journal of Accounting and Economics, 45(1), 27-54.

How to cite this article

APA

Li, B., Peng, M., & Zhang, Y. (2017). Audit Knowledge and Accounting Conservatism: A Case of Executives’ Vocational Learning and Application. Eurasia Journal of Mathematics, Science and Technology Education, 13(9), 6101-6112. https://doi.org/10.12973/eurasia.2017.01043a

Vancouver

Li B, Peng M, Zhang Y. Audit Knowledge and Accounting Conservatism: A Case of Executives’ Vocational Learning and Application. EURASIA J Math Sci Tech Ed. 2017;13(9):6101-12. https://doi.org/10.12973/eurasia.2017.01043a

AMA

Li B, Peng M, Zhang Y. Audit Knowledge and Accounting Conservatism: A Case of Executives’ Vocational Learning and Application. EURASIA J Math Sci Tech Ed. 2017;13(9), 6101-6112. https://doi.org/10.12973/eurasia.2017.01043a

Chicago

Li, Bin, Muze Peng, and Yingkui Zhang. "Audit Knowledge and Accounting Conservatism: A Case of Executives’ Vocational Learning and Application". Eurasia Journal of Mathematics, Science and Technology Education 2017 13 no. 9 (2017): 6101-6112. https://doi.org/10.12973/eurasia.2017.01043a

Harvard

Li, B., Peng, M., and Zhang, Y. (2017). Audit Knowledge and Accounting Conservatism: A Case of Executives’ Vocational Learning and Application. Eurasia Journal of Mathematics, Science and Technology Education, 13(9), pp. 6101-6112. https://doi.org/10.12973/eurasia.2017.01043a

MLA

Li, Bin et al. "Audit Knowledge and Accounting Conservatism: A Case of Executives’ Vocational Learning and Application". Eurasia Journal of Mathematics, Science and Technology Education, vol. 13, no. 9, 2017, pp. 6101-6112. https://doi.org/10.12973/eurasia.2017.01043a