Audit Research by Eller Accounting Professor Cited by Forbes
Aug. 4, 2020
The article discusses a study titled “The Costs of Waiving Audit Adjustments,” by Choudhary and co-authors Kenneth Merkley from Indiana University and Katherine Schipper from Duke University, which found that company management decisions to waive auditor-proposed adjustments to financial statements often leads to higher audit costs, increased audit hours and an increased risk of future financial statement restatements.
“Given the negative consequences associated with waiving audit adjustments, why do managers decide to pass on correcting their financial statements?” the article reads. “The researchers find evidence that incentives to manage earnings may play a role in some of these decisions. Specifically, the decision to waive proposed adjustments appears to allow companies in some cases to come closer to meeting or beating analyst consensus forecasts.”
Choudhary joined the Eller College of Management as associate professor in 2017. Previously, she was assistant professor at Georgetown University. She earned her PhD in Accounting from Duke University in 2008. Prior to academia, she worked as an internal auditor for the Washington Post and in enterprise risk services with Deloitte. Her research focuses on capital markets financial accounting, financial reporting for taxes, recognition versus disclosure and financial reporting reliability.