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A common cliché found in annual reports is "our employees are our most important, valuable asset." While many companies claim human capital is an important asset and source of valuable earnings, there is nary a human asset found in financial statements. This research paper investigates the usefulness and importance of voluntary human capital disclosures. The 2 X 2 X 2 experiment manipulates firm financial performance, non-GAAP voluntary disclosures, and disclosure attestation to identify the extent to which human capital disclosures influence investor decision-making related to assessments of management credibility and firm value. The research described in this dissertation also investigates the interactive effects of auditor attestation on voluntary disclosure. The primary hypothesis examines whether firms providing strong human capital disclosures will have higher credibility ratings and stock price associations than firms not providing such disclosures. I find that when presented with human capital metrics, investors' assessments of credibility and firm stock price are attenuated by human capital disclosures, especially during periods of strong financial performance. Results also suggest investors key in on both non-financial and financial human capital metrics. Based on cognitive processing time, analyses indicate investors spend more time processing strong human capital disclosures. Another important hypothesis examines if firms receiving attestation services over voluntary human capital disclosures will have higher credibility ratings than firms not receiving such services. I find some evidence investors cognitively acknowledge the presence of auditor attestation reports when they are presented, and both credibility and stock price assessments are impacted by attestation services. Overall, the original research described here makes a contribution to the existing literature by providing unique insight as to how human capital information is viewed by investors. Current reporting standards focus on financial assets, physical assets, and technological/intellectual property. This can result in significant transparency issues when publicly traded firms fail to adequately disclose human capital risks. Organizations undoubtedly have substantial unreported human capital benefits and risks, which can have a potentially significant market valuation impact. The research conducted and reported in this paper illuminates the potential benefits of human capital disclosures to both internal and external firm stakeholders. / Ph. D.

The purpose of this study is to investigate how the effects of principles vs. rules based accounting standards and a potential change in the audit reporting model will affect investors' perceptions of management's reporting credibility.  The Securities and Exchange Commission is currently considering the adoption of International Financial Reporting Standards, which is considered to be a set of principles based accounting standards.  Whereas, U.S. Generally Accepted Accounting Principles are considered rules based.  Additionally, the Public Company Accounting Oversight Board is considering a possible change to the existing audit reporting model.  The audit reporting change currently under consideration would require the use of additional emphasis of matter paragraphs within the audit report to discuss areas of higher risk in the financial statements.  A sample of 196 nonprofessional investors completed an on-line 2 X 2 between subjects experiment that manipulated accounting standard type and level of auditor reporting.  Participants assessed direct and indirect measures of reporting credibility, obtained the experimental manipulations, and provided revised credibility assessments.  Changes in credibility served as the dependent variable.  The results suggest that expanded auditor reporting resulted in lower perceptions of management\'s reporting credibility. Additionally, the effects of expanded auditor reporting appear stronger under rules based accounting standards.  No main effects, however, of accounting standard type were observed.  These results contribute to the existing literature on accounting standard type, the information content of audit reports, and reporting credibility. / Ph. D.

The auditor’s report has been criticised for being uninformative at least since the late nineteenth century. Despite persistent requests for detailed information in order to facilitate users’ decision-making processes, auditors have only recently started to provide entity-specific information in their reports. Against this background, two research questions are raised: (1) What were the driving forces behind the evolution of the auditor’s report? (2) How can dissatisfaction with and misperceptions of audit reporting be reduced in order to support financial statement users’ decision-making processes? As the object of study, the Swedish auditor’s report is chosen since it has, up to the present day, deviated from reports in other jurisdictions and thus enables an extension of knowledge in the field of audit reporting. The first part of this dissertation contributes to previous auditing history and auditing profession research by answering the first research question through an analysis of approximately 1,800 historical Swedish auditor’s reports and numerous related documents. Applying a critical-theory perspective, the research findings suggest that during the course of history, auditors were able to adopt an auditor’s rather than a user’s perspective despite arguing in the interest of users. The second part of the dissertation contributes to previous audit reporting and expectation gap research by answering the second research question through a vignette experiment with Swedish financial statement users. The research findings indicate that dissatisfaction with the current auditor’s report can be reduced through additional entity-specific information concerning the auditor’s independence, the audit process and the audit findings, and less general information about the auditor’s responsibilities. Overall, this dissertation connects past events concerning the auditor’s report to current challenges and indicates possible future developments. / The auditor’s report is the financial auditor’s primary means of communication with users of financial statements. It has been criticised for being an uninformative document at least since the late nineteenth century. Persistent requests for change in order to facilitate users’ decision-making processes include detailed information about the audited financial statements, the conducted audits and the auditors. Despite these requests, auditors have only recently started to provide some entity-specific information in their reports. This dissertation contributes to the topical issue of audit reporting in relation to users’ needs through two studies. The first study retraces the historical evolution of the auditor’s report in order to explain the driving forces behind this evolution and the reasons why users have had to accept uninformative reports for such a long time. The second study examines ways to reduce dissatisfaction with and misperceptions of audit reporting and evaluates the current auditor’s report with regard to financial statement users’ decision-making processes. Overall, the findings of this dissertation cast doubt on the past and current willingness of auditors to deliver reports that are aligned with users’ needs to make informed decisions.

Text in Afrikaans / Hierdie studie is onderneem om aan te dui hoe die verslagleweringsfunksie van die ouditeur in openbare praktyk be1nvloed word deur die voortdurende veranderings in onder andere, gemeenskapstrukture en gemeenskapsdoelwitte. Gedurende die afgelope aantal jare het die gebruiker van die ouditeursversl ag herhaaldelik druk op die ouditprofessie geplaas om beter kommunikasiemiddels tot stand te bring. Die ouditprofessie het gehoor hier aan gegee en een van die reaksies op hierdie versoek was die uitreiking van 'n voorgeskrewe nuwe verlengde vorm van die ouditeursverslag. In hierdie studie word die proses van ontwikkeling van die verlengde vorm van die ouditeursverslag deurgevolg. Spesifieke verwysing na die verslagleweringsbeleide wat tans in sekere toonaangewende lande gevolg word, word gedoen, naamlik: die Verenigde State van Amerika, Suid-Afrika en die Verenigde Koninkryk. Om te verseker dat die ouditprofessie altyd gehoor gee aan die behoeftes van die gebruiker van die ouditeursverslag en sodoende 'n professie met 'n visie sal bly, word aanbeveel dat volgehoue navorsing op die gebied van ouditverslaglewering sal bly voortgaan. / This study was undertaken to indicate how continua 1 changes in, inter alia, community structures and goals have influenced the reporting function of the auditor in public practice. In recent years users of the auditor's report have applied continual pressure on the profession to improve its communication tools. One of the responses to this demand has been the issuing of the newly expanded long format auditor's report. In this study the development process of the new long format auditor's report has been researched and described with specific reference to the reporting practices in some of the leading countries in the field viz; the United States of America,South Africa and the United Kingdom. Continuing research within the domain of audit reporting is recommended to ensure that the profession deals with reporting problems as they occur, thus retaining the visionary status of the profession. / Auditing / M. Com. (Auditing)

Text in Afrikaans / Hierdie studie is onderneem om aan te dui hoe die verslagleweringsfunksie van die ouditeur in openbare praktyk be1nvloed word deur die voortdurende veranderings in onder andere, gemeenskapstrukture en gemeenskapsdoelwitte. Gedurende die afgelope aantal jare het die gebruiker van die ouditeursversl ag herhaaldelik druk op die ouditprofessie geplaas om beter kommunikasiemiddels tot stand te bring. Die ouditprofessie het gehoor hier aan gegee en een van die reaksies op hierdie versoek was die uitreiking van 'n voorgeskrewe nuwe verlengde vorm van die ouditeursverslag. In hierdie studie word die proses van ontwikkeling van die verlengde vorm van die ouditeursverslag deurgevolg. Spesifieke verwysing na die verslagleweringsbeleide wat tans in sekere toonaangewende lande gevolg word, word gedoen, naamlik: die Verenigde State van Amerika, Suid-Afrika en die Verenigde Koninkryk. Om te verseker dat die ouditprofessie altyd gehoor gee aan die behoeftes van die gebruiker van die ouditeursverslag en sodoende 'n professie met 'n visie sal bly, word aanbeveel dat volgehoue navorsing op die gebied van ouditverslaglewering sal bly voortgaan. / This study was undertaken to indicate how continua 1 changes in, inter alia, community structures and goals have influenced the reporting function of the auditor in public practice. In recent years users of the auditor's report have applied continual pressure on the profession to improve its communication tools. One of the responses to this demand has been the issuing of the newly expanded long format auditor's report. In this study the development process of the new long format auditor's report has been researched and described with specific reference to the reporting practices in some of the leading countries in the field viz; the United States of America,South Africa and the United Kingdom. Continuing research within the domain of audit reporting is recommended to ensure that the profession deals with reporting problems as they occur, thus retaining the visionary status of the profession. / Auditing / M. Com. (Auditing)

Auditors play an important role in the reliability of financial statements. Many investors and other financial information users rely on their opinion. During the financial crisis, auditors were critised since they did not warn the markets about financially distressed companies. In our thesis, we examine whether auditors change their behaviour during a financial crisis. Using our collected data for joint stock companies in the Czech Republic, we focus on frequency of modified and going concern opinions, amount of audit and non-audit fees charged by auditors, and audit reporting lag. Our audit fees model showed that there were significantly lower audit fees after the crisis than during the crisis years. The results also suggest that both Big 4 and non-Big 4 auditors increased their frequency of issuing modified opinions (most of which were going concern opinions) during the crisis period. In our logit going concern models for the individual years we observed change of the auditors' behaviour during the crisis years 2008-2010. We have also found out that Big 4 auditors increased their audit reporting lag in 2008 but our overall results suggest that the audit reporting lag was shorter during the crisis.