PROGRAM INTERNATIONAL SYMPOSIUM ON AUDIT RESEARCH 2009 Friday, June 26 8.00 - 9.00 am Registration 9.00 - 9.15 am Opening and words of welcome 9.15 - 11.00 am Plenary Session: (Convergence of) International Auditing Regulation Chair: Steven Maijoor (Maastricht University/The Netherlands Authority of Financial Markets) Arnold Schilder (International Auditing and Assurance Standards Board) Pierre Delsaux (European Commission) Peter Eimers (Partner, PricewaterhouseCoopers) 11.00 - 11.30 am Break 11.30 - 12.45 pm Plenary Session: Audit Markets Chair: Bob Roussey, University of Southern California INTERNAL AUDIT OUTSOURCING AND THE RISK OF MISLEADING OR FRAUDULENT FINANCIAL REPORTING: DID SARBANES-OXLEY GET IT WRONG? Douglas F. Prawitt, Brigham Young University; Nathan Y. Sharp, Texas A&M University; David A. Wood, Brigham Young University/Indiana University AUDITORS AND THE INTERNET IPO ‘BUBBLE’ Andrew J. Leone, University of Miami; Sarah Rice, University of Connecticut; Joseph P. Weber, Massachusetts Institute of Technology; Michael Willenborg, University of Connecticut Discussant: Ann Vanstraelen (Maastricht University) 12.45 - 2.00 pm Lunch 2.00 – 3.45 pm Plenary Session: Measurement of Audit Quality Chair: Roger Simnett (University of New South Wales) Speakers: Martin Baumann (Public Company Accounting Oversight Board) Jere Francis (University of Missouri) Paul George (Financial Reporting Council) 3.45 - 4.15 pm Break 4.15 - 5.45 pm Concurrent Sessions Session 1: Auditor Reporting Behavior, Insurance and Liability Chair: David Hay (University of Auckland) INTERNATIONAL CONSISTENCY IN AUDIT REPORTING BEHAVIOUR: EVIDENCE FROM GOING CONCERN MODIFICATIONS Per Christen Trønnes, Elizabeth Carson, Roger Simnett, University of New South Wales AN EMPIRICAL EXAMINATION OF AUDITOR LIABILITY CAP COMPANIES James H. Irving, College of William and Mary; Jeff L. Payne, University of Kentucky; Paul L. Walker, University of Virginia HOW DO AUDITORS VIEW MANAGERS’ DISCLOSURE STRATEGY? THE EFFECT OF EARNINGS GUIDANCE ON AUDIT FEES Gopal V. Krishnan, Lehigh University; Mikhail Pevzner, Partha Sengupta, George Mason University Session 2: Audit Judgment and Decision Making Chair: Ken Trotman (University of New South Wales) CASCADING CONTRAST EFFECTS DURING AUDITOR RISK ASSESSMENTS: A SENSEMAKING DIAGNOSIS AND REMEDIAL INTERVENTION Natalia Kotchetova University of Waterloo; Ed O’Donnell, University of Kansas; Alan Webb, University of Waterloo COGNITIVE EFFECTS OF DECOMPOSITION ON FRAUD-RISK ASSESSMENTS Michael Favere-Marchesi, Simon Fraser University DISCLOSING CONFLICTS OF INTEREST – DOES EXPERIENCE AND REPUTATION MATTER? Christopher Koch, University of Mannheim; Carsten Schmidt, University of Mannheim/National Research Centre on Decision-Making and Economic Modeling Session 3: Workshop – New Perspectives on Continuous Assurance Chair: Eddy Vaassen (Maastricht University) and Hans Verkruijsse (Ernst & Young) Michael Alles, Rutgers University – KPMG Continuous Assurance project Rod Brennan, Siemens – Continuous Assurance at Siemens Yong Bum Kim, Rutgers University – Insurance Company Project Miklos Vasarhelyi, Rutgers University – Unibanco Transitory Account project 7.30 pm Dinner at Château Neercanne (Buses leave Crown Plaza Hotel at 7.00 pm) Saturday, June 27 8.30 - 9.20 am Round Table Session Table 1: Audit Judgment Chair: Hun-Tong Tan (Nanyang Technological University) MODERATED-MEDIATION EFFECT OF INDIVIDUAL PSYCHOLOGICAL DIFFERENCES ON AUDIT TASK PERFORMANCE: FROM THE PERSPECTIVE OF SOCIAL COGNITIVE THEORY Zuraidah Mohd Sanusi, Universiti Teknologi MARA; Takiah Mohd Iskandar, Universiti Kebangsaan Malaysia; Norman Mohd Saleh, Universiti Kebangsaan Malaysia ENHANCING AUDITORS’ JUDGMENT THROUGH MOTIVATIONAL FACTORS Takiah Iskandar, Universiti Kebangsaan Malaysia; Ria Nelly Sari, Universitas Riau; Zuraidah Mohd Sanusi, Universiti Teknologi; Rita Anugerah, Universitas Riau AUDITOR SWITCHING IN AN INCREASINGLY COMPETITIVE AUDIT MARKET Mohammad Bagherpour; Petroleum University of Technology; Gary S. Monroe, University of New South Wales; Greg Shailer, The Australian National University Table 2: Sarbanes-Oxley Act Chair: Claus Holm (Aarhus Business School) COSTS OF COMPLYING WITH THE SARBANES-OXLEY ACT Michael W. Maher, University of California, Davis; Dan Weiss, Tel Aviv University ARE COMPANIES THAT REPORT MATERIAL WEAKNESSES IN INTERNAL CONTROL MORE LIKELY TO RESTATE THEIR FINANCIAL STATEMENTS? Pascal A. Bizarro, Bowling Green State University; Charles D. Boudreaux, Nicholls State University; Andy Garcia, Bowling Green State University DO POST-RESTATEMENT FIRMS CARE ABOUT FINANCIAL CREDIBILITY? EVIDENCE FROM THE PRE- AND POST-SOX ERAS Ken Y. Chen; National Taiwan University; Randal J. Elder, Syracuse University; Shengmin Hung, National Taiwan University Table 3: Audit Pricing, Production and Audit Quality Chair: Caren Schelleman (Maastricht University) AN EMPIRICAL INVESTIGATION OF THE AUDIT REPORT LAG: THE EFFECT OF NON-AUDIT SERVICES Angela Walker, David Hay, University of Auckland AUDIT PRICING AND COST STRATEGIES OF JAPANESE BIG 3 FIRMS Hironori Fukukawa, Hitotsubashi University AUDIT QUALITY AND THE PARTNER EFFECT: EVIDENCE FROM EUROPEAN LISTED COMPANIES Joost P. van Buuren, Nyenrode Business Universiteit AN EMPIRICAL INVESTIGATION OF AUDITOR INDEPENDENCE AND ACCOUNTING CONSERVATISM: FURTHER EVIDENCE FROM TAIWAN MARKET-BASED INCENTIVES Yi-Hsing Liao, Chung Yuan Christian University 9.20 – 9.30 am Break 9.30 - 11.00 am Concurrent Sessions Session 1: Audit Judgment and Decision Making Chair: Ted Mock (University of California) CUE COMBINATION IN CONTROL RISK JUDGMENTS Jonas Gaudernack, Norwegian School of Economics and Business Administration THE IMPACT OF THE SARBANES OXLEY ACT ON THE FINANCIAL REPORTING PROCESS: EXPERIENCES OF DIRECTORS Jeffrey Cohen, Boston College; Colleen Hayes, The Australian National University; Ganesh Krishnamoorthy, Northeastern University; Gary S. Monroe, University of New South Wales; Arnie Wright, Northeastern University THE UNQUALIFIED AUDITORS’ REPORT: A STUDY OF USER PERCEPTIONS, EFFECTS ON USER DECISIONS AND DECISION PROCESSES, AND DIRECTIONS FOR FURTHER RESEARCH Theodore J. Mock, University of California, Riverside and Maastricht University; Jerry L. Turner, University of Memphis; Glen L. Gray, California State University at Northridge, Paul J. Coram, University of Melbourne Session 2: Audit Fees Chair: Sally Wright (University of Massachusetts) MUDDYING THE WATER: THE IMPACT OF CORPORATE TAX AVOIDANCE ON AUDITOR REMUNERATION Michael P. Donohoe, University of Florida; W. Robert Knechel, University of Florida/Maastricht University SECTION 404 AUDIT COSTS FOR SMALL COMPANIES: THE BENEFIT OF WAITING R. Mithu Dey, Rochester Institute of Technology; Mary W. Sullivan, George Washington University THE INSURANCE HYPOTHESIS: THE CASE OF KPMG’S AUDIT CLIENTS Darryl Brown, Illinois State University; Susan Shu, Boston College; Greg Trompeter, University of Central Florida 11.00 - 11.30 am Break 11.30 - 1.00 pm Concurrent Sessions Session 1: Audit Quality Chair: Harold Hassink (Maastricht University) IFRS GOODWILL IMPAIRMENT TEST AND EARNINGS MANAGEMENT: THE INFLUENCE OF AUDIT QUALITY AND THE INSTITUTIONAL ENVIRONMENT Katrien Van de Poel, Universiteit Antwerpen; Steven Maijoor, Maastricht University; Ann Vanstraelen, Maastricht University/Universiteit Antwerpen CAN INDIVIDUAL CPA SANCTION IMPROVE AUDIT QUALITY OF THE FIRM? Chien-Heng Jennifer Chang, National Chengchi University; Ling-Tai Lynette Chou, National Chengchi University AUDIT QUALITY, EARNINGS QUALITY & COST OF EQUITY CAPITAL Yi Lang, University of New South Wales; Don Stokes, Monash University; Stephen Taylor, University of Technology, Sydney; Leon Wong, University of New South Wales Session 2: Audit Market Competition and Industry Specialization Chair: Terence Ng (Nanyang Technological University) AUDIT MARKET COMPETITION AND AUDIT QUALITY Sanjay Kallapur, Indian School of Business, Gachibowli; Srinivasan Sankaraguruswamy, National University of Singapore; Yoonseok Zang, Singapore Management University INDUSTRY SPECIALIZATION AS A MEANS TO SOFTEN PRICE COMPETITION IN THE AUDIT MARKET Wieteke Numan, Tilburg University; Marleen Willekens, Katholieke Universiteit Leuven OFFICE-LEVEL VERSUS FIRM-WIDE INDUSTRY SPECIALIZATION AND AUDITOR OVERSIGHT Stephan Hollander, Tilburg University 1.00 - 2.15 pm Lunch 2.15 – 3.30 pm Plenary Session: Regulation and Audit Quality: Insights from Europe Chair: Roger Meuwissen (Maastricht University) THE IMPACT OF SOX ON EARNINGS QUALITY OUTSIDE THE U.S.: EVIDENCE FROM BELGIAN SUBSIDIARIES OF U.S. LISTED COMPANIES Wouter Dutillieux, Marleen Willekens, Katholieke Universiteit Leuven AUDITOR TENURE AND AUDITOR CHANGE: DOES MANDATORY AUDITOR ROTATION REALLY IMPROVE AUDIT QUALITY? Mara Cameran, Annalisa Prencipe, Università Bocconi; Marco Trombetta, Instituto de Empresa Business School Discussant: Robert Knechel (University of Florida) 3.30 – 4.00 pm Closing and invitation to ISAR 2010