@article{andiola_brazel_downey_schaefer_2024, title={Coaching Today's auditors: What causes reviewers to adopt a more developmental approach?}, volume={112}, ISSN={["1873-6289"]}, DOI={10.1016/j.aos.2024.101548}, abstractNote={Audit workpaper review is a quality control mechanism intended to detect preparer errors and professionally develop preparers. In this study, we experimentally investigate two factors that theory predicts affect the degree to which audit reviewers adopt a developmental approach: local versus international preparer office affiliation and likely versus unlikely preparer recurrence. We find that reviewers adopt a less developmental approach for international preparers but a more developmental approach for preparers likely to recur. The adoption of a more developmental approach not only results in more coaching via review comments but is associated with greater detection of seeded preparer errors. Taken together, our findings highlight the susceptibility of quality control efforts in the global audit environment and identify recurrence as a potential intervention.}, journal={ACCOUNTING ORGANIZATIONS AND SOCIETY}, author={Andiola, Lindsay M. and Brazel, Joseph F. and Downey, Denise Hanes and Schaefer, Tammie J.}, year={2024}, month={Jun} }
 @article{brazel_leiby_schaefer_2024, title={Who Rewards Appropriate Levels of Professional Skepticism?}, ISSN={["1573-0697"]}, DOI={10.1007/s10551-024-05732-w}, journal={JOURNAL OF BUSINESS ETHICS}, author={Brazel, Joseph F. and Leiby, Justin and Schaefer, Tammie J.}, year={2024}, month={May} }
 @article{brazel_brown_sidgman_2022, title={Can Your Audit Team Effectively Multitask? It Might Depend on How They Communicate}, volume={16}, ISSN={["1936-1270"]}, DOI={10.2308/CIIA-2021-032}, abstractNote={SUMMARYThis article summarizes Sidgman, Brown, and Brazel (2021) which demonstrates that, when multitasking, the performance of audit teams communicating in-person is greater than the performance of teams using computer-mediated communication (discussion boards and chatrooms). In the audit setting, multitasking is unavoidable and pervasive; in-person communication is not always an option. To facilitate multitasking, engagement team communications have extended in-person interactions to computer-mediated communication (CMC) technologies. However, little is known about the performance of multitasking teams under these alternative modes of communication (in-person, discussion boards, and chatrooms). Contrary to expectations, we find that participants' familiarity with, and preference for, chatroom features (similar to text messaging) may have offset the benefits previously attributed to discussion boards (similar to email). This finding is timely, given the pandemic-induced environment of remote and hybrid work, as it informs practitioners on audit teams' multitasking effectiveness while using CMC.}, number={2}, journal={CURRENT ISSUES IN AUDITING}, author={Brazel, Joseph F. and Brown, Veena Looknanan and Sidgman, Juergen}, year={2022}, pages={P17–P23} }
 @article{brazel_ehimwenma_koreff_2022, title={Do Different Data Analytics Impact Auditors' Decisions?}, volume={16}, ISSN={["1936-1270"]}, DOI={10.2308/CIIA-2021-031}, abstractNote={SUMMARYGlobal stakeholders have expressed interest in increasing the use of data analytics throughout the audit process. While data analytics offer great promise in identifying audit-relevant information, auditors may not use this information to its full potential, resulting in a missed opportunity for possible improvements to audit quality. This article summarizes a study by Koreff (2022) that examines whether conclusions from different types of data analytical models (anomaly versus predictive) and data analyzed (financial versus non-financial) result in different auditor decisions. Findings suggest that when predictive models are used and identify a risk of misstatement, auditors increase budgeted audit hours more when financial data are analyzed than when non-financial data are analyzed. However, when anomaly models are used and identify a risk of misstatement, auditors' budgeted hours do not differ based on the type of data analyzed. These findings provide evidence that different data analytics do not uniformly impact auditors' decisions.}, number={2}, journal={CURRENT ISSUES IN AUDITING}, author={Brazel, Joseph F. and Ehimwenma, Efosa and Koreff, Jared}, year={2022}, pages={P24–P38} }
 @article{brazel_lucianetti_schaefer_2021, title={Reporting Concerns About Earnings Quality: An Examination of Corporate Managers}, volume={171}, ISSN={["1573-0697"]}, DOI={10.1007/s10551-020-04436-1}, number={3}, journal={JOURNAL OF BUSINESS ETHICS}, author={Brazel, Joseph F. and Lucianetti, Lorenzo and Schaefer, Tammie J.}, year={2021}, month={Jul}, pages={435–457} }
 @article{brazel_lail_2019, title={How the Interplay between Financial and Nonfinancial Measures Affects Management Forecasting Behavior}, volume={31}, ISSN={["1558-8033"]}, DOI={10.2308/jmar-52371}, abstractNote={ABSTRACTThis study examines how the interplay between financial and nonfinancial measures (NFMs) affects management forecasting behavior. Building on the knowledge that NFMs are typically aligned with actual earnings and are likely incorporated into earnings forecasts, we investigate if the level of divergence between changes in NFMs and contemporaneous changes in earnings influences management forecasting behavior. We hand collect company-specific NFMs disclosed in 10-K filings and describe how a greater divergence between NFMs and earnings (i.e., NFM changes substantially outpacing earnings growth, or vice versa) is associated with greater uncertainty about the underlying business. As such, in more divergent settings, we observe that management is less likely to issue guidance. Consistent with our theory, for managers that do provide guidance in more divergent settings, management forecast errors increase. Last, we provide evidence that external stakeholders can use the level of divergence to predict future management forecasting behavior.JEL Classifications: G14; M40; M41.Data Availability: The data used in this study are publicly available from the sources indicated in the text.}, number={3}, journal={JOURNAL OF MANAGEMENT ACCOUNTING RESEARCH}, author={Brazel, Joseph F. and Lail, Bradley E.}, year={2019}, pages={41–63} }
 @article{brazel_schmidt_2019, title={Do Auditors and Audit Committees Lower Fraud Risk by Constraining Inconsistencies between Financial and Nonfinancial Measures?}, volume={38}, ISBN={1558-7991}, DOI={10.2308/ajpt-52087}, abstractNote={SUMMARYPrior research finds that companies committing fraud exhibit large inconsistencies between reported revenue growth and growth in revenue-related nonfinancial measures (e.g., number of stores, employees, patents). However, prior research also suggests that auditors, on average, are not adept at identifying and constraining these differences. This study investigates whether certain auditors and audit committees are able to lower fraud risk by constraining inconsistencies between financial and related nonfinancial measures (NFMs). For a sample of companies across a variety of industries, we find that auditors with greater industry expertise and tenure and audit committee chairs with greater tenure are less likely to be associated with companies that exhibit large inconsistencies between their reported revenue growth and related NFMs. Surprisingly, we observe that audit committees with industry expert chairs are more likely to be associated with large inconsistencies (higher fraud risk) than audit committees without industry expert chairs.JEL Classifications: M4.}, number={1}, journal={AUDITING-A JOURNAL OF PRACTICE & THEORY}, author={Brazel, Joseph F. and Schmidt, Jaime J.}, year={2019}, month={Feb}, pages={103–122} }
 @article{brazel_2018, title={Do Auditors and Audit Committees Lower Fraud Risk by Constraining Inconsistencies between Financial and Nonfinancial Measures?}, volume={12}, DOI={10.2308/ciia-52258}, abstractNote={SUMMARYPrior research finds that companies committing fraud exhibit large inconsistencies between reported revenue growth and growth in revenue-related nonfinancial measures (e.g., number of stores, employees, patents). Prior research also suggests that auditors, on average, are not adept at identifying and constraining these differences. This article summarizes a recent study by Brazel and Schmidt (2018) that examines whether certain auditors and audit committees are able to lower fraud risk by constraining inconsistencies between financial and related nonfinancial measures (NFMs). This practitioner summary first summarizes the motivation for the study, then discusses the methods used, explains the results, and concludes with a discussion of the study's implications. Brazel and Schmidt (2018) find that auditors with greater industry expertise and tenure, and audit committee chairs with greater tenure are less likely to be associated with companies that exhibit large inconsistencies between their reported revenue growth and related NFMs (higher fraud risk). Surprisingly, they observe that audit committees with industry expert chairs are more likely to be associated with large inconsistencies than audit committees without industry expert chairs. Overall, Brazel and Schmidt (2018) conclude that the audit process can constrain fraud risk, but not all forms of audit committee expertise may be beneficial.}, number={2}, journal={CURRENT ISSUES IN AUDITING}, author={Brazel, Joseph F.}, year={2018}, pages={P7–15} }
 @article{brazel_2019, title={The Outcome Effect and Professional Skepticism}, volume={13}, ISSN={["1936-1270"]}, DOI={10.2308/ciia-52337}, abstractNote={SUMMARYDespite the importance placed on professional skepticism by the accounting profession and regulators, the failure of auditors to exercise an appropriate level of skepticism continues to be a global issue. This article summarizes a recent study by Brazel, Jackson, Schaefer, and Stewart (2016) that examines a potential barrier to skepticism: that outcome knowledge biases supervisors' evaluations of skeptical behavior. Holding a staff member's skeptical judgments and acts constant, Brazel et al. (2016) find that superiors on engagement teams evaluate the staff's skeptical behavior based on whether the staff's investigation of an issue ultimately identifies a misstatement. The evidence suggests that evaluators penalize auditors who employ an appropriate level of skepticism, but do not identify a misstatement. Collectively, Brazel et al. (2016) depict an evaluation system that may inadvertently discourage skepticism amongst auditors in the field.}, number={1}, journal={CURRENT ISSUES IN AUDITING}, author={Brazel, Joseph F.}, year={2019}, pages={P7–P16} }
 @article{brazel_gimbar_maksymov_schaefer_2019, title={The Outcome Effect and Professional Skepticism: A Replication and a Failed Attempt at Mitigation}, volume={31}, ISSN={["1558-8009"]}, DOI={10.2308/bria-52306}, abstractNote={ABSTRACTIn this research note, we replicate Brazel, Jackson, Schaefer, and Stewart's (2016) study of how auditors evaluate skeptical behavior. Like the original study, we find that evaluators reward audit staff who exercise appropriate levels of skepticism and identify a misstatement (positive outcome). However, when no misstatement is identified (negative outcome), evaluators penalize staff who exercise appropriate levels of skepticism. One factor causing this outcome effect may be that exercising skepticism typically causes budget overages due to additional testing. Hence, we examine whether formally attributing the budget overage to skeptical judgments and actions in the audit budget file reduces outcome effects. However, while replicating the initial effect across three separate studies, we have been unable to reduce this effect. Thus, it is clear that the outcome effect in this context is very robust.Data Availability: Contact the authors.}, number={2}, journal={BEHAVIORAL RESEARCH IN ACCOUNTING}, author={Brazel, Joseph F. and Gimbar, Christine and Maksymov, Eldar M. and Schaefer, Tammie J.}, year={2019}, pages={135–143} }
 @article{lambert_jones_brazel_showalter_2017, title={Audit time pressure and earnings quality: An examination of accelerated filings}, volume={58}, ISSN={0361-3682}, url={http://dx.doi.org/10.1016/J.AOS.2017.03.003}, DOI={10.1016/J.AOS.2017.03.003}, abstractNote={Using publicly available data from annual reports, we find that SEC rule changes (33-8128 and 33-8644) that impose time pressure on the audits of registered firms have a negative impact on earnings quality, which we interpret as evidence of lower audit quality. Consistent with our predictions, we find that the 10-K accelerations reduced audit quality only when it actually reduced the number of days from year-end to audit report date, and that this effect was more acute for smaller, accelerated filers and during the initial deadline change (relative to the second). We also provide insights into the quality of these audits by conducting a survey of thirty-two retired audit partners. Survey results underscore the challenges time pressure imposes on receiving and evaluating complex valuations (such as for derivatives, pensions, and goodwill) and resolving audit adjustments.}, journal={Accounting, Organizations and Society}, publisher={Elsevier BV}, author={Lambert, Tamara A. and Jones, Keith L. and Brazel, Joseph F. and Showalter, D. Scott}, year={2017}, month={Apr}, pages={50–66} }
 @article{brazel_jones_thayer_warne_2015, title={Understanding investor perceptions of financial statement fraud and their use of red flags: evidence from the field}, volume={20}, ISSN={1380-6653 1573-7136}, url={http://dx.doi.org/10.1007/S11142-015-9326-Y}, DOI={10.1007/S11142-015-9326-Y}, number={4}, journal={Review of Accounting Studies}, publisher={Springer Science and Business Media LLC}, author={Brazel, Joseph F. and Jones, Keith L. and Thayer, Jane and Warne, Rick C.}, year={2015}, month={Jun}, pages={1373–1406} }
 @article{f. brazel_webb_2006, title={CEO compensation and the seasoned equity offering decision}, volume={27}, ISSN={0143-6570 1099-1468}, url={http://dx.doi.org/10.1002/mde.1268}, DOI={10.1002/mde.1268}, abstractNote={AbstractEmpirical research on seasoned equity offerings indicates that the decision to make an SEO typically engenders a decline in firm value, as investors interpret this decision as a signal of poor financial health or that the stock is overpriced. Here, we add to the literature by analyzing the short‐term market reaction to SEO announcements and the chief executive officer's link to firm performance (i.e. the proportion of CEO equity‐based compensation). Results support the hypothesis that investors are more likely to view the announcement of an SEO as a last resort source of capital when the proportion of CEO equity‐based compensation is high. In such cases of high equity‐based compensation, our findings indicate that the SEO announcement provides an incremental signal of financial distress above that provided by financial statements. We also find this relationship (last resort signal) to be stronger when large information asymmetries exist between management and investors. Thus, managers should consider the ramifications of executive compensation structure when considering whether to make an SEO. Copyright © 2006 John Wiley & Sons, Ltd.}, number={5}, journal={Managerial and Decision Economics}, publisher={Wiley}, author={F. Brazel, Joseph and Webb, Elizabeth}, year={2006}, pages={363–378} }