Date of Award
Summer 2001
Document Type
Dissertation
Degree Name
Doctor of Business Administration (DBA)
Department
Management
First Advisor
Michael S. Luehlfing
Abstract
This study was intended to determine whether there was a change in the disclosure of all loss contingencies associated with operational laws and regulations (i.e., environmental and non-environmental) and/or whether there was a complementary association between the environmental and non-environmental loss contingency disclosures during the period 1989 to 1999. In summary, the results of the study suggest (1) that there was an increase in all loss contingency disclosures associated with operational laws and regulations, and (2) that there was a complementary association between the environmental and non-environmental loss contingency disclosures.
The primary sources of the loss contingency disclosures (i.e., the data) were the Annual Report and the Form 10-K of 310 NYSE companies having a relatively high potential for environmental liabilities. After extracting the loss contingency disclosures from LEXIS/NEXIS, the data were enumerated through content analysis techniques, and changes in the quantity and quality of these disclosures for the period 1989 to 1999, if any, were tested using the Wilcoxon Signed Rank Test.
This study was motivated by the authoritative attention on environmental liability reporting during the 1990's and the relationship of such authoritative attention to Statement on Auditing Standards (SAS) No. 54 “Illegal Acts by Clients.” Specifically, did the authoritative attention on environmental liability reporting during the 1990's pierce the “shield of protection” offered by SAS No. 54 with respect to environmental loss contingencies? Further, was there a related contagion effect with respect to non-environmental loss contingencies?
Given that the results found an increase in all loss contingency disclosures associated with operational laws and regulations, and, given that there was a complementary association between the environmental and non-environmental disclosures, the “shield of protection” offered by SAS No. 54 may have indeed been pierced. Future research should examine whether there has been an increase in auditor litigation associated with loss contingencies associated with operational laws during the 1990's and thereafter. Additionally, future research should investigate whether differences in the reporting practices of operational loss contingencies are associated with different auditing firms.
Recommended Citation
Bostick, Lisa Nesbit, "" (2001). Dissertation. 721.
https://digitalcommons.latech.edu/dissertations/721