The objectivity of accountants' litigation support judgments
Article Abstract:
The objectivity of accountants when acting as a litigation adviser and expert witness in legal cases is investigated. This study aims to find out if their professional objectivity will be contaminated by the potential conflicts of interest common in litigation support judgments. The Defining Issues Test is used as a psychometer of the ethical reasoning of 207 litigation specialists and auditors from two firms in the northeastern section of the US. The test assesses client advocacy on a damage valuation experiment that varies the legal position of the client. Results indicate that domain-specific experience paired with ethical reasoning reduces the level of bias in litigation support judgments. Implications and recommendations for further studies are discussed.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1995
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The audit risk model, business risk and audit-planning decisions
Article Abstract:
The conditions under which the audit risk model does and does not represent audit-planning decisions were determined. In an experiment, audit partners and executives evaluated one of two cases where a material misstatement was found. The auditors evaluated the elements of the audit risk model and the business risk, and offered suggestions for the audit investment and free. When the probability for error was high, the audit risk model dominated business risk in the explanation of the audit investment, and the fee did not have a risk premium. When the probability for an irregularity was high, business risk dominated the audit risk model in the explanation of the audit investment and the fee contained a risk premium.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1999
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Managing annual accounting reports to avoid state taxes: an analysis of property-casualty insurers
Article Abstract:
The hypothesis that property casualty insurance companies allocate premiums from multistate policies in their annual accounting reports to minimize total state taxes was investigated. Company-level data gathered from the publicly available, statutory reports filed with each state government were employed. Reported premiums at the insurer-state level, scaled by incurred losses, were regressed on state tax measures. In agreement with tax-motivated income shifting, it was observed that the premium-loss ratio is declining in state tax rates. The negative correlation is greatest for insurance companies specializing in multistate lines of business.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1999
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