Dr Mahmud Hossain Wins Research Award
A paper by Dr. Mahmud Hossain has won a best paper award at the upcoming American Accounting Association 2010 Ohio
Regional Meeting to be held on May 6-8, 2010, Columbus, Ohio. The paper titled "Auditor's
Industry Specialization and Earnings Management of Firms Reporting Internal Control
Weaknesses under SOX Section 404", written by Dr. Mahmud Hossain (Asst. Professor
of Accounting, University of Memphis) and Dr. Santanu Mitra (Assoc. Professor of Accounting,
Wayne State University), has received the Andrews distinguished research award. The
paper examines the influence of industry-specialist audits on accrual management behavior
of firms whose internal control is reported as ineffective by their external auditors
pursuant to SOX Section 404. The test results suggest that though firms with ineffective
internal controls (ICW) manage discretionary accruals at a greater level than firms
with effective internal controls (non-ICW), specialist auditors influence accrual
management decisions of the ICW firms and reduce the discretionary accrual adjustments.
As a result, industry-specialist audits substantially attenuate the difference in
accrual management between ICW and non-ICW firms.