The semester started with two groups of Ernst & Young Visiting Scholars at the E&Y CARAT (Ernst & Young Center for Auditing Research and Advanced Technology). The first group included Professor Miklos Vasarhelyi, William Von Minden Distinguished Professor of Accounting and Information Systems, and Professor Alex Kogan, both of Rutgers University. They were in Lawrence from January 29 to February 1, 1999. In the second group were Professor Theodore Mock, Arthur Andersen Alumni Professor of Accounting at the University of Southern California, and Professor Arnold Wright, Arthur Andersen Professor of Accounting at Boston College. This group visited the E&Y Center from February 8 through 11, 1999. 
    When these visiting scholars come to Lawrence, we at the E&Y CARAT work a schedule of 12 to 14 hours a day. It wouldn’t be an overstatement to say that we all enjoy working that way for two reasons: One, it is exciting to work on these original ideas and second, we want to complete our research papers 

 

my work. The inclusion of the student fellows allows my research to be translated to practice through the classroom and the Internet.”  
    Having these visiting scholars come to the KU campus not only helps us by exposing our colleagues and students to their research activities, but also generates opportunities for us to visit their institutions and make KU’s presence known there (please see the details later in the newsletter).  
    Overall, the E&Y CARAT has a positive impact on our teaching and the research mission of the School of Business. I wish to thank you all for supporting the activities of the Center. 
 

 

    Professor Miklos Vasar-helyi and Professor Alex Kogan worked intensely during their visit in January, along with Professors Kay Nelson and Raj Srivastava on the FRAANK (Financial Reporting and Auditing Agent with Net Knowledge) project.  The FRAANK project is a major project that deals with issues related to continuous monitoring, continuous auditing, on-line reporting, and on-line auditing. One module of FRAANK currently in progress deals with the following: 
    It searches the SEC EDGAR database for the list of quarterly filings (10-Q) of a user specified company.  For a 10-Q chosen by user, it retrieves the filing from the SEC Web site; analyzes (parses) the filing to find and return several accounting numbers (e.g., cash, assets, revenues, income), recognizing their units ($K, $M, etc.).  
    It finds and extracts financial statements (balance sheet, income, and cash flows).  It computes financial ratios (quick, current, etc.).

For a preview of the FRAANK system: 

    If you want to try some features of FRAANK then go to “http://lark.cc.ukans. edu/cgiwrap/sirvasta/ agentwork.cgi”and play around.  

    The following papers related to the FRAANK project have been either published or have been presented at various conferences: 
    Nelson, K., A. Kogan, R. P. Srivastava, M. Vasarhelyi, and H. Lu “Virtual Auditing Agents: The EDGAR Agent Challenge,” Decision Support Systems (forthcoming). 
    Nelson, K., A. Kogan, R. P. Srivastava, and M. Vasar-helyi, “Inquiring Information Systems in the Boundary-Less World: The FRAANK Example,” has been accepted by the Americas Conference of The Association of Information Systems, and will be published in the conference proceedings in August 1999. 
    Nelson, K., A. Kogan, R. P. Srivastava, and M. Vasar-helyi,” Virtual Auditing Agents: The Edgar Agent Example,” Proceedings of the Hawaii International Conference on Systems Science, January 1998. 
    Nelson, K., S. Scholz, and M. Zeppetella (student), “An Examination of Context in Non-Financial Information Disclosed on the Internet,” to be submitted to Accounting, Management, and Information Technology.

VISITING SCHOLARS TAKE PART IN AUDIT JUDGMENT RESEARCH PROJECT 

The second group of visiting scholars (Professors Mock and Wright) worked with Raj 

Wright, A., T. J. Mock, and R. P. Srivastava, “Audit Program Planning using A Belief Function Framework,” Deloitte & Touche/University of Kansas Symposium on Auditing Problems, 1998 (invited). 

Srivastava, R. P., A. Wright, and T. Mock, “Analytical Modeling of Multiple Hypotheses Evaluation in Auditing.” Presented at the 1999 European Accounting Association Annual Meeting, Bordeaux, May 5-7.

Mock, T., Wright, A., R. P. Srivastava, and H. Lu, “A Protocol Study of the Framing and Evaluation of Multiple Hypotheses,” to be presented at the 1999 International Conference on Audit Judgement, which will be held in Los Angeles, June 24-25. 
Wright, A., T. Mock, and R. P. Srivastava, “Causal Reasoning of Multiple Hypotheses In Complex Settings,” Working Paper, School of Business, University of Kansas. 
 

The E&Y CARAT researchers wish to express sincere gratitude to the local accounting firms who provided their data and subjects for the study. 
 

    In addition to the visiting scholars’ active participation in our research activities, the E&Y Student Fellowship and E&Y Faculty Mentor program has also contributed to the research mission significantly. The following research papers are the result of this effort: 

    Robert Prentice, Vernon J. Richardson and Susan Scholz, "Corporate Web Site Disclosure and Rule 10b-5: An Empirical Evaluation," American Business Law Journal (forthcoming). 

    Ettredge, M., and R. P. Srivastava, “Using Digital Analysis to Enhance Data Integrity,” Issues in Accounting Education (forthcoming).  

    Ettredge, M., V. Richard-son, and S. Scholz. 1998. “Financial Data at Corporate Web Sites: Do Information Clienteles Matter?” Working Paper, School of Business, University of Kansas.

SPEAKERS AND PRESENTA-
TIONS ENHANCE RESEARCH EFFORTS 

    The E&Y CARAT participates in sponsoring two weekly research seminars: the Accounting and Finance Workshop, and the  Management Science and Technology Seminar. The purpose of these seminars is to share the research work conducted by faculty, Ph.D. students, and distinguished scholar from other institutions.  
    The following individuals were the visiting speakers this semester: Professor Robert C. Lipe, KPMG Professor, University of Oklahoma; Professor Bin Srinidhi, Rutgers University-Newark, and Professor David Larcker, Ernst & Young Professor, University of Pennsylvania. Please see this semester’s schedules given later for the details. 
 

    Professor Raj Srivastava presented the following papers at the 1999 Hawaii International Conference on System Sciences. Both papers received the best paper award in their respective areas: 
    Srivastava, R. P. and Hai Lu, “Evidential Reasoning Under Uncertainty Using Belief Functions: A Structural Analysis of Audit Evidence,” Proceedings of the 32nd Hawaii International Conference on Systems Science, January 5-8, 1999. 

 

    Srivastava, R. P. and T. J. Mock, “Evidential Reasoning for WebTrust Assurance Services,” Proceedings of the 32nd Hawaii International Conference on Systems Science, January 5-8, 1999. 
 

LOOKING AHEAD ... 

    Professor Arnold Wright has invited Raj Srivastava and Ted Mock to spend a week in June (June 1-5) in Boston to work on the unfinished research papers. 
    Professor Miklos Vasarhelyi has invited Professors Raj Srivastava and Kay Nelson to Rutgers University in July to work on the FRAANK project. 
    Professor Theodore Mock has invited Professors Raj Srivastava and Arnold Wright to the University of Southern California for a week in August to work on the audit judgement research. 
 

    The Ernst & Young Center for Auditing Research and Advanced Technology offers two research workshops on Friday each semester, where faculty and Ph.D students share findings and exchange research ideas. 

    The following Friday seminars were held in the Spring 1999 semester: 

Accounting and Finance Workshops, 1:30-3:20 pm, 428 Summerfield Hall  

1/29:  Professor Miklos Vasar-helyi and Professor Alex Kogan, Rutgers University-Newark, “Analytical Techniques for Continuous Auditing.” 

2/5:  Oran Alston, Faculty Candidate in AIS at KU, Ph.D. Candidate at the University of Pittsburgh, “Understanding the Impact of Social and Technological Factors on Consumer Behavior Over the Internet: The Role of Trust, Technology Characteristics.” 

2/12:  Dmitri Roussinov, Faculty Candidate in AIS, Ph.D. Candidate at the University of Arizona

2/26:  Professors Paul Koch and Cathy Shenoy, University of Kansas, “The Information Content of Dividend and Capital Structure Policies.” 

3/5:  Professors Mark Hirschey and Vernon Richardson, University of Kansas, “The Value Relevance of Goodwill Write-down Decisions.” 

3/12:  Professor Robert C. Lipe, KPMG Professor, University of Oklahoma 

4/2:  Professor Paul Koch, University of Kansas, “Mid-day Volatility Spikes in U.S. Futures Markets.” 

4/9:  Professor Bin Srinidhi, Rutgers University-Newark, “The Effect of Information on Short Term Price Reversals.” 

4/23:  Professor David Larcker, Ernst & Young Professor, University of Pennsylvania 

Fri, 4/30:  Professor Rajendra Srivastava and Hai Lu, University of Kansas 
 

 

Jan 29:  Paul Johnson, Associate Professor of Political Science, University of Kansas, “Agent-based Modeling of the Exchange Theory of Interest Group Politics: A Swarm Toolkit Application” 

Feb 05:  Russell Almond, ETS Visual Explanation Tools for Graphical Models

Feb 12:  Donald Lien, Professor of Economics, University of Kansas, “Forecasting Quarterly Variables with Monthly Data” 
 

Feb 19:  Vishy Cvsa, PhD Candidate, Case Western Reserve, University, “Pricing Claims under GARCH-Level Dependent Processes” 

Feb 26:  David Lowell, Assistant Professor, UC-Santa Clara, “Decision Analysis with Incomplete Probability Assessment” 

Mar 05:  David Paul, Assistant Professor, School of Business, University of Kansas, “Wicked Decision Problems in Remote Health Care: Tele-medicine As A Tool for Sense-making” 

Mar 12:  Prakash P. Shenoy, Ron Harper Distinguished Professor, School of Business, KU, “An Introduction to Bayes Nets” 

Mar 19:  Debbie Armstrong & Marie Buche, PhD Students, School of Business, University of Kansas, “Evaluating the CMM level 3 KPA of Inter-group Coordination: A Theory-Based Approach”

Apr 02:  Riza Demirer, PhD Student, School of Business, University of Kansas, “Sequential Valuation Networks and Asymmetric Decision Problems” 

Apr 09:  Rajendra Srivastava, E&Y Distinguished Professor, School of Business, University of Kansas, “Structural Analysis of Audit Evidence Using Belief Functions” 

Apr 16:  Ebi George, PhD Student, University of Kansas, “Fast Cycle Capability: A Conceptual Integration” 

Apr 23:  Prakash P. Shenoy, Ron Harper Distinguished Professor, School of Business, University of Kansas, “Dempster-Shafer Belief Nets: Semantics, Construction, and Comparison with Bayes Nets” 

Apr 30:  John Charnes, Associate Professor, School of Business, University of Kansas, “Valuation of a Biotechnology Firm: An Application of Real-Options Methodologies” 

May 07:  VK Narayanan, Professor, School of Business, University of Kansas, “A Critique of Knowledge Management: From a Reading of Nicholas Rescher”