Walton College Researchers Present Study at American Accounting Association Meeting
Researchers at the Sam M. Walton College of Business at the University of Arkansas presented their study at the annual meeting of the American Accounting Association that indicates audit firms' reputations suffer when they disclose weakness in corporate clients' accounting.
Stephen P. Rowe, assistant professor in the Department of Accounting, and Elizabeth Cowle, a Walton College Ph.D. student in accounting, presented "Don't Make Me Look Bad: How the Audit Market Penalizes Auditors for Doing Their Job" during the association's annual meeting in San Francisco.
Rowe and Cowle wrote: "The issuance of an ICMW (a flag indicating material weaknesses in companies' internal controls) should neither impair the issuing auditor's reputation, nor deter clients from selecting auditors with a history of issuing ICMWs." Yet, "auditors who issue an ICMW are perceived as less attractive in the audit market," which therefore "disincentivizes auditors from disclosing internal-control information that could make their clients look bad."
At Walton College, Rowe teaches intermediate accounting and does research in auditing. He has a Ph.D. from the University of Illinois at Urbana-Champaign, a master's degree from Loyola University Chicago and a bachelor's degree from Covenant College.
Flagging material weaknesses in companies' internal controls over financial reporting is a responsibility mandated by the Sarbanes-Oxley act of 2002. "Sarbanes-Oxley represented the principal legislative response to a severe crisis not only for the accounting profession but for the free-market system," Rowe said. "While some studies have found SOX to be of value, the issue, as this study suggests, is far from settled. To anyone who believes in the free-market system, this needs to be concerning."
The paper was among hundreds of scholarly studies presented at the association's annual meeting, which attracted some 4,000 scholars and practitioners to San Francisco on Aug. 9-14. The AAA is a worldwide organization devoted to excellence in accounting education, research, and practice.
David Speer, senior director of communications
Sam M. Walton College of Business
In the new episode of Short Talks From the Hill, Kristen Gibson explains how soap destroys respiratory viruses such as coronavirus and offers tips for handling potentially contaminated surfaces.
Eric Essen, instructional designer in Walton College's Graduate School of Business, has been named employee of the fourth quarter by the Sam M. Walton College of Business.
Dunn, the manager of technology services, was recognized for his exceptional leadership and hard work during the dual crises of extensive flood damage at Global Campus and COVID-19.
A new book, The Science of College: Navigating the First Year and Beyond, written by a team of U of A researchers, professors and higher education professionals, explores what it means to be a college student and young adult in today's society.
The SKY Club presents 'Overcoming feelings of loneliness' by guest speaker Nina Sanyal, who will talk about overcoming loneliness during an online session at 7 p.m Wednesday, Aug. 5.