This dissertation examines how the growth of corporate social responsibility (CSR) has led to the development of new public policy in the European Union. While many political scientists remain skeptical of the efficacy of CSR---questioning, for example, why companies would choose to self-regulate in any meaningful way given their profit motive---my research provides evidence for a more optimistic perspective. Looking in particular at the case of corporate non-financial (i.e. social and environmental) reporting, the dissertation illustrates the ways in which civil society organizations have used voluntary standards, not to replace government, but to drag it into policy areas that have been neglected or ignored. Though most thinking about CSR puts the firm at the center of analysis, this project demonstrates that the firm is better understood as the target of other organizations that seek to push the CSR agenda forward. These organizations play a critical role in both expanding the regulatory space and changing societal expectations for good corporate behavior. While voluntary standards are often insufficient to reach desired social and environmental outcomes, my work suggests that their most significant impact on society and the environment actually occurs via their influence on public policy---as what is voluntary becomes expected, and what is expected becomes mandatory. The project begins with the observation that the rise in voluntary corporate non-financial reporting (NFR) in several European countries was followed by the enactment of new legislation making such practices mandatory. Postulating a causal relationship between this increase in private regulation and the introduction of new state regulation, the dissertation proceeds to test this claim using a mixed-method research design. The first empirical chapter traces the process by which private regulation leads to a change public policy. Drawing on extensive fieldwork in Europe, this chapter illustrates the critical role that voluntary standards played both in establishing the NFR regulatory space and in building the coalitions necessary for enacting new public policy. The next chapter addresses the possibility of reverse causation by examining the determinants of firms' NFR practices. Using a multilevel data set comprising 2,000 of Europe's largest listed companies, the results indicate that it is firm-level factors such as revenue and sector that primarily drive voluntary reporting; national-level factors play only a supporting role. The third empirical chapter uses the same multilevel data set to examine the relationship between voluntary NFR and the development of NFR legislation at the national level. The results suggest that the popularity of voluntary standards represents a necessary, though not sufficient, condition for the enactment of mandatory legislation in most cases. The final empirical chapter examines the politics behind the European Union's 2014 directive on NFR, using public consultation data to demonstrate how the preferences of business, nonprofit, and public sector organizations across Europe are rooted in national policy legacies. / 2020-02-14T00:00:00Z

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The third general standard of fieldwork requires auditors to maintain a skeptical mindset with regards to the collection and critical assessment of audit evidence. While professional skepticism is frequently referenced by professional standards, a lack of precision in defining the concept presumably leads to variation in how skepticism is exercised in practice. Drawing on theories from the fields of psychology, economics and organizational justice, this dissertation considers different perspectives of what constitutes sufficient professional skepticism and examines how those perspectives differ between audit practitioners and regulators. First, I consider competing perspectives of professional skepticism – neutral versus presumptive doubt – and whether asking auditors to adopt alternative perspectives of skepticism may have implications for audit efficiency and effectiveness. While, too little skepticism may endanger audit effectiveness and lead to audit failure or enforcement action, too much skepticism may arguably lead to unnecessary costs and inefficiency. Second, I consider whether the nature of the auditor-client relationship threatens an auditor’s ability to maintain an attitude of professional skepticism. For example, theoretical perspectives from the fields of psychology and economics suggest that auditors may, consciously or unconsciously, be less skeptical of clients with whom they have developed close, positive working relationships or financial dependencies. More specifically, I consider whether skeptical behavior is impeded by management who display low-risk attitudes towards fraud or by client’s who are considered to be highly important to the profitability of the local office. Finally, I examine how professional skepticism is defined from a regulator’s perspective. When a public company is accused of fraudulent financial reporting, regulators may determine iii that the audit performed on the fraudulent financial statements was deficient. Prior research has suggested that in such cases, insufficient skepticism is often a leading cause of alleged audit failure. Within a fairness theory framework, this study examines enforcement actions against auditors between 1999 and 2009, and identifies certain factors that are associated with a citation for a lack of professional skepticism. Overall, results suggest that regulators approach the issue by determining whether auditors should have been more skeptical. Factors found to affect this determination include whether the auditor was perceived as having been aware of an elevated risk of fraud or whether the client was accused of having provided the auditor with false or misleading information during the course of their investigation.

The literature on International Diversification suggests that investors and analysts value foreign earnings differently than domestic earnings. Prior studies also show an overall "valuation discount" for firms with foreign operations. To my knowledge, no study has empirically tested and found there to be differences in earnings quality for these firms. This study investigates differences in the quality of earnings for U.S. firms with foreign operations using a direct measure (discretionary accruals) and an indirect measure (investor perception of earnings). I also consider the impact of audit quality on each measure of earnings quality. In the first part of my dissertation I find firms with foreign operations report lower discretionary accruals than firms with only domestic operations. This indicates that auditors, similar to investors and analysts, report more conservatively for firms with foreign operations. My results show that audit quality further reduces the absolute value of reported accruals, and I find a higher level of reported "income decreasing" accruals for these firms. In the second section of my dissertation I consider the impact of audit quality on investor perception of earnings. Similar to earlier papers I find that foreign earnings changes are more highly associated with changes in firm value than domestic earnings changes, and this larger earnings response is attributed to negative changes in foreign earnings. I also find that audit quality improves investor perception of foreign earnings for firms with foreign operations. While there are ample studies demonstrating that firms with foreign operations are valued differently than firms with purely domestic operations, my study is the first to provide empirical evidence about how audit quality impacts financial reporting, the quality of earnings, and investor perception of earnings for firms with foreign operations. / Business Administration/Accounting

While the European Financial Reporting Advisory Group (EFRAG) considers European national standard-setters (NSSs) as close partners that play a vital role in its legitimacy, empirical evidence on EFRAG’s consultation processes and the involvement of NSSs therein remains scarce. We use a multi-issue/multi-period approach to investigate the formal participation in EFRAG’s consultation processes. By examining 2,102 comment letters submitted to EFRAG in the 2002–2015 period, we find that NSSs typically outweigh other stakeholder groups in terms of level of participation across stages of the consultation process and project topics. Although NSSs’ level of participation is rather stable over time, it significantly varies across European countries. We also provide a recent classification of European NSSs and show that NSSs’ level of participation varies by their institutional status and is the highest for private NSSs. Our findings have implications for aspects of the legitimacy of both EFRAG and NSSs and shed light on the role of intermediaries in international accounting standard-setting.

Annual university rankings produced by mainstream sources, such as U.S. News and World Report, are very popular and viewed as important by a variety of university stakeholders. Consequently, universities expend a great deal of effort in an attempt to ensure they appear in the best possible light. One major component of these ranking systems is the Carnegie Classification of Institutions of Higher Education, which is partly based on the research expenditures reported by the university. This system provides incentives for administrators at institutions of higher education to make strategic accounting choices, with respect to the classification of research expenditures, to improve the prestige of the university. I first measure the amount of accounting discretion within a university's classification of research expenditures and then test whether discretionary research expenditures impact the prestige of a university. Results indicate that discretionary research expenditures are positively associated with university prestige. Specifically, universities within my sample that have positive discretionary research expenditures have an increased probability of subsequently being classified as a Doctoral University with moderate to high research activity by 5% and 7% respectively. In addition, universities within my sample that had positive discretionary research expenditures experienced increases in their ranking of federal funding received relative to other universities by an average of 20.4 positions. These results are consistent with the concept that universities can make certain discretionary accounting choices which can help improve the prestige of the institution with the goal of obtaining additional sources of funding. / Ph. D. / Annual university rankings produced by mainstream sources, such as U.S. News and World Report, are very popular and viewed as important by a variety of university stakeholders. Consequently, universities expend a great deal of effort in an attempt to ensure they appear in the best possible light. One major component of these ranking systems is the Carnegie Classification of Institutions of Higher Education, which is partly based on the research expenditures reported by the university. This system provides incentives for administrators at institutions of higher education to make strategic accounting choices, with respect to the reporting of research expenditures, to improve the prestige of the university. I first measure the amount of accounting choice (i.e. accounting discretion) within a university’s report of research expenditures and then test whether accounting discretion impacts the prestige of a university. Results indicate that accounting discretion is positively associated with university prestige. I also find a positive association between university accounting discretion and subsequent increases in federal funding received relative to other universities. These results are consistent with the concept that universities can make certain accounting choices which can help improve the prestige of the institution with the goal of obtaining additional sources of funding.

This study investigates whether a relationship exists between fraudulent financial reporting and a variety of corporate governance attributes. Numerous high profile accounting scandals perpetuated over recent years have brought prominence to the corporate governance structure employed by US public companies. Many of these scandals involved manipulation of the financial reporting process by high level managers. It is therefore thought that a lack of effective oversight provided by the governing bodies engaged to monitor the actions of management may be at the heart of the problem. A review of prior research is used to identify the attributes of corporate governance relevant for inclusion in this study and to provide support for the posing of twenty directional hypotheses. The selected corporate governance attributes are classified into four broad categories depicting Audit Committee Functionality, Board of Director Composition, Ownership Structure, and External Auditor Factors. A matched pair research design is utilised to determine whether significant differences exist between the corporate governance attributes employed by fraud and non-fraud companies. A sample of 76 fraud companies, identified through an examination of Accounting and Auditing Enforcement Releases issued by the Securities Exchange Commission and drawn from a total of 223 companies examined, are tested along with an industry-size matched sample of non-fraud companies. The results of univariate paired t-tests and a conditional logistic regression equation find that statistically significant relationships do exist between a number of corporate governance attributes and fraudulent financial reporting. Specifically, the study finds that the percentage of independent directors on a company's board, the existence of a nominating committee, and the engaging of a Big6 auditor are negatively related to the incidence of fraud. Whereas, the average number of directorships held by audit committee members, the duality of the CEO and Chairman of the Board positions, and the percentage of company ownership held by outside blockholders are positively related to the incidence of fraudulent financial reporting.

Helmut-Schmidt-Universiẗat, Diss. u.d.T.: Stute, Andreas: Konvergenzpotenziale der Rechnungslegung nach IFRS--Hamburg, 2006. / Literaturverz. S. 453 - 479.

Universiẗat, Diss. u.d.T.: Wohlgemuth, Frank: Aussagefähigkeit der IFRS für die Bilanzanalyse aus Sicht der zwischenbetrieblichen Vergleichbarkeit--Saarbrücken, 2006.

Zugl.: Erlangen, Nürnberg, Univ., Diss., 2009