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DOCTORAL SEMINAR IN AUDITING RESEARCH
ACC 6973 (SEC 002 / CRN 13368)
FALL 2008
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CLASS DAY/TIME: Thursday / 2 pm to 4:45 pm
ROOM NO: BB 4.02.02
INSTRUCTOR: Dr. Sharad Asthana
OFFICE: BB 4.05.26
OFFICE HOURS: Tuesday 10-11 am or by appointment
PHONE: 210-458-5232
EMAIL:
URL: www.sasthana.com
COURSE PREREQUISITES: Doctoral classification and approval of instructor.
COURSE OBJECTIVE
This course is a survey of recent empirical research in auditing. The primary purpose of this course is to introduce a significant number of the research questions and methods in empirical research in auditing. The assigned readings, classroom discussions, term-paper, and final exam are designed for that purpose.
class format
Each week, we will focus our discussion on four papers. For each assigned paper, one student will serve as the discussant and prepare a 4-5 page written summary. This student will begin class discussion by summarizing the paper and placing it in context. A copy of the summary will be given by the discussant to all the students and the instructor at the beginning of the presentation and will serve as a reference during the discussion. The written summary will include the following:
· Research question and its importance
· Research method (model, sample, statistical analysis)
· Results
· Critique
· Incremental contribution (related to closely related papers)
· Possible extensions
All other students are also expected to read the assigned papers carefully and to participate in the discussion. Each student (other that the discussant) will prepare a written question or comment on each assigned paper. The question or comment must fit on one typed page (double-spaced) and be distributed to the discussant a day before class to give him/her time to prepare a reply. The written question or comment will be given to me at the start of the class. The discussant should try to respond to the question or comment to the best of his/her ability.
Discussants are assigned papers as follows:
Henri è 1A, 2C, 5B, 5D, 7A.
Linxiao è 1B, 2D, 4A, 5C, 7B.
Rachana è 1C, 3A, 4B, 6D, 7C.
April è 1D, 3B, 4C, 6A, 7D.
Kelly è 2A, 3C, 4D, 6B.
Kerry è 2B, 3D, 5A, 6C.
term paper Proposal
I want every Ph.D. student in accounting to gain some appreciation for the complexity of designing an empirical project, the questions that arise in data collection, the sensitivity of results to choice of statistical techniques, and the difficulty of communicating technical material accurately and efficiently. The term-paper is designed to accomplish those objectives.
Each student will identify three research ideas related to three different session topics of her/his choice that could be developed into empirical papers and will submit a written proposal (one-page per idea) by October 9. The Instructor will pick one idea for the student to work on. The in-depth proposal on the chosen topic should be written as if it will be submitted to a top research journal. This proposal should be approximately 15 pages in length, inclusive of references, tables, figures, and appendices. The proposal will be due on December 2. The suggested format follows:
I. Introduction and significance of the problem
A statement of research question which address a specific problem. (1 page)
II. Background and theory development
A brief review of the theory relevant to the proposed research, including appropriate cites to related work. A set of hypotheses based on the relevant background and theory should be presented. (5 pages)
III. Methodology
A description of the proposed research, including a description of the research methods, variables, sample, etc. (6 pages)
IV. Assumptions and limitations
An explanation of the limiting assumptions and potential validity threats (1 page)
V. References
A list of research cited (2 pages)
Final Exam
A closed-book final examination based on the papers covered in class will be held on October 16th, 2008. This exam is designed to provide a good exposure to the type of questions you may see on the Comprehensive exam.
GRADING: The final letter grade for each student will be determined on the basis of his/her performances on all the following activities:
· Written summary by the discussant 20%
· Written question/comments 10%
· Participation in the class discussion 10%
· Term paper 25%
· Final Exam 35%
· Semester Total 100%
Additional Information:
1. Extra credit will never be allowed on an individual basis. Don't ask.
2. Academic Misconduct will not be tolerated in any form. Students are individually responsible for understanding what constitutes academic misconduct. The student code of conduct and judicial procedures are published online at http://www.utsa.edu/osja/index.cfm. Evidence indicating academic misconduct will be turned over to Student Judicial Affairs for investigation and appropriate action. Students are bound by the UTSA Honor Pledge:
"On my honor, as a student of the University of Texas at San Antonio, I will uphold the highest standards of academic integrity and personal accountability for the advancement of the dignity and the reputation of our university and myself."
3. Appropriate academic accommodation will be made for any student registered through the Office of Disability Services. Please note only the Office of Disability Services (210-458-4157) may issue instructions for academic accommodations.
4. A grade of "IN" (incomplete) is given only to students who have satisfactorily completed a minimum of 75% of the work in the class, and who have extreme extenuating circumstances at the end of semester. Students receiving a grade of "IN" may only complete the unfinished course requirements. This is the University policy.
5. Late submissions of assignments are not allowed.
6.Makeup exams will only be allowed under very extreme circumstances, at the discretion of the instructor.
Note: I reserve the right to change the contents of the syllabus. However, any changes will be announced.
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TIME TABLE
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SESSION 1: AUDIT FEE (AUGUST 28, 2008)
1A. Simunic, D. A. 1980. The pricing of audit services: Theory and evidence. Journal of Accounting Research (18/1): 161-190.
1B. Whisenant, S., S. Sankaraguruswamy, and K. Raghunandan. 2003. Evidence on the joint determination of audit and non-audit fees. Journal of Accounting Research (41/4): 721-744.
1C. Larcker, D. and S. Richardson. 2004. Fees paid to audit firms, accrual choices, and corporate governance. Journal of Accounting Research. 42(3): 625-658.
1D. Ghosh, A., and S. Lustgarten. 2006. Pricing of initial audit engagements by large and small audit firms. Contemporary Accounting Research 23 (2): 333-368.
SESSION 2: AUDIT QUALITY (SEPTEMBER 4, 2008)
2A. Frankel, R.M., M.F. Johnson, and K.K. Nelson. 2002. The relation between auditors’ fees for nonaudit services and earnings quality. The Accounting Review 77 (Supplement): 71-105.
2B. Chung, H., and S. Kallapur. 2003. Client importance, nonaudit services, and abnormal accruals. The Accounting Review 78(4): 931-956.
2C. Higgs, J. L., and T. R. Skantz. 2006. Audit and nonaudit fees and the market’s reaction to earnings announcements. Auditing: A Journal of Practice and Theory (25/1): 1-26.
2D. Asthana, S., and J. Boone. 2008. Abnormal audit fee and audit quality. Working Paper, University of Texas at San Antonio.
SESSION 3: AUDITOR EXPERTISE (SEPTEMBER 11)
3A. Krishnan, G. V. 2003. Does big 6 auditor Industry expertise constrain earnings management? Accounting Horizons (Supplement): 1-16.
3B. Balsam, S., J. Krishnan, and J. S. Yang. 2003. Auditor industry specialization and earnings quality. Auditing: A Journal of Practice and Theory (22/2): 71-97.
3C. Casterella, J. R. Francis, B. L. Lewis, and P. L. Walker. 2004. Auditor industry specialization, client bargaining power, and audit pricing. Auditing: A Journal of Practice and Theory (23/1): 123-140.
3D. Knechel, W. R., V. Naiker, and G. Pacheco. 2007. Does industry specialization matter? Evidence from market reaction to auditor switches Auditing: A Journal of Practice and Theory (26/1): 19-45.
SESSION 4: AUDITOR INDEPENDENCE (SEPTEMBER 18, 2008)
4A. Ashbaugh, H., R. LaFond, and B. Mayhew. 2003. Do nonaudit services compromise auditor independence? Further evidence. The Accounting Review 78(3): 611-639.
4B. Ruddock, C., S. J. Taylor, and S. L. Taylor. 2006. Nonaudit services and earnings conservatism: Is auditor independence impaired? Contemporary Accounting Research (23/3): 701-746.
4C. Zhang, Y., J. Zhou, and N. Zhou. 2007. Audit committee quality, auditor independence, and internal control weaknesses. Journal of Accounting and Public Policy (26): 300-327.
4D. Gul, F. A., B. L. Jaggi, and G. V. Krishnan. 2007. Auditor independence: Evidence on the joint effect of auditor tenure and nonaudit fees. Auditing: A Journal of Practice and Theory (26/2): 117-142.
SESSION 5: Auditor reputation (SEPTEMBER 25, 2008)
5A. Wilson, T. E., and R. A. Grimlund. 1990. An examination of the importance of an auditor’s reputation. Auditing: A Journal of Practice and Theory (9/2): 43-59.
5B. Chaney, P.K., and K.L. Philipich. 2002. Shredded reputation: The cost of audit failure. Journal of Accounting Research 40 (September): 1221-1245.
5C. Krishnamurthy, S., J. Z. Zhou, and N. Z. Zhou. 2006. Auditor reputation, auditor independence, and the stock-market impact of Anderson’s indictment on its clients. Contemporary Accounting Research (23/2): 465-490.
5D. Asthana, S., S. Balsam, and J. Krishnan. 2008. Audit firm reputation, auditor switches, and client stock price reactions: The Andersen experience. Working Paper University of Texas at San Antonio.
SESSION 6: AUDITOR TENURE (OCTOBER 2, 2008)
6A. Johnson, V. E., I. K. Khurana, and J. K. Reynolds. 2002. Audit firm tenure and the quality of financial reports. Contemporary Accounting Research (19/4): 637-660.
6B. Carey, P., and R. Simnett. 2006. Audit partner tenure and audit quality. The Accounting Review (81/3): 653-676.
6C. Kealey, B. T., H. Y. Lee, and M. T. Stein. 2007. The association between audit-firm tenure and audit fees paid to successor auditors: Evidence from Arthur Anderson. Auditing: A Journal of Practice and Theory (26/2): 95-116.
6D. Jenkins, D. S., and U. Velury. 2008. Does auditor tenure influence the reporting of conservative earnings? Journal of Accounting and Public Policy (27): 115-132.
SESSION 7: AUDIT DELAY (OCTOBER 9, 2008)
7A. Ashton, R. H., J. J. Willingham, and R. K. Elliott. 1987. An empirical analysis of audit delay, Journal of Accounting Research (Autumn): 275-292.
7B. Ashton, R. H., P. R. Graul, and J. D. Newton. 1989. Audit delay and the timeliness of corporate reporting, Contemporary Accounting Research (Spring): 657-673.
7C. Ettredge, M. L., L. Siu, and C. Li. 2006. The impact of SOX section 404 internal control quality assessment on audit delay in the SOX era. Auditing: A Journal of Practice and Theory (November): 1-23.
7D. Asthana, S. 2008. Abnormal audit delay, earnings quality, and firm value. Working Paper, University of Texas at San Antonio.
SESSION 8: FINAL EXAM (OCTOBER 16, 2008)
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