Jens Wüstemann's research while affiliated with Universität Mannheim and other places

Publications (28)

Article
Over the past two decades public accountability has become an icon in political, managerial, and administrative discourse and the object of much scholarly analysis across a broad range of social and administrative sciences. This Handbook provides a state of the art overview of recent scholarship on public accountability. It collects, consolidates,...
Article
Audit production research explains the choice of inputs used for procuring audits and evaluates the efficiency of audits and audit firms. This review illustrates the potentials of audit production research, highlights challenges it faces, and emphasizes research gaps by summarizing its findings. The review shows that prior literature can be divided...
Article
Recent regulatory initiatives stress that an independent oversight board, rather than the management board, should be the client of the auditor. In an experiment, we test whether the type of client affects auditors’ independence. Unique features of the German institutional setting enable us to realistically vary the type of auditors’ client as our...
Article
A cross-firm consistent application of accounting standards is sought in all major accounting regimes. Since many transactions and events are only vaguely or not explicitly addressed in the standards managers must often use judgment when applying accounting standards to particular transactions or events. This analysis concludes that a consistent ap...
Chapter
Mit der Veröffentlichung des „Gesetzes zur Modernisierung des Bilanzrechts (Bilanzrechtsmodernisierungsgesetz – BilMoG)– im Bundesgesetzblatt vom 28. Mai 2009 wurde die größte Reform des Bilanzrechts seit dem Bilanzrichtlinien- Gesetz von 1985 abgeschlossen. Die lange und wechselvolle Entstehungsgeschichte, deren Beginn zumindest bis zum Jahr 2004...
Article
The objective of this paper is to show opportunities for integrating psychological and economics research in auditing. For this purpose, auditing research that employs both the methodologies of experimental psychology and experimental economics is collectively reviewed. The review is structured along three fundamental research questions: (1) Are au...
Article
A major part of the contracts in the industry sector and increasingly also in the service sector are contracts for work and services. However, appropriate and consistent revenue recognition principles for this type of contract have not yet been developed to a satisfying extent so far. In this essay we derive revenue recognition principles for contr...
Article
The recognition of revenue in the case of multiple-element arrangements has yet neither been solved according to German accounting principles, nor according to IFRS. This article seeks to derive revenue recognition and measurement principles for multiple-element arrangements from the purpose of German accounting principles. In the context of the an...
Article
There is a considerable degree of heterogeneity in the way how European banks present their financial instruments in IFRS financial statements. We identify three major presentation formats that are currently applied: a presentation by measurement category, by product, and by purpose. We find the use of the measurement categories, which were origina...
Article
Since 2002, the FASB and the IASB have been undertaking a joint project on the revision and convergence of U.S. GAAP and IFRS revenue recognition. Even though the outcome of the project is still open, the project's course as well as trends in recently published IFRS and other current IASB projects suggest that existing earnings-based and realisatio...
Article
Many accounting regimes, such as U. S. GAAP, IFRS, German GAAP (GoB) and Japanese GAAP, pursue internal consistency. One central methodical and practical problem in all regimes is how management shall develop and apply accounting policies when specific guidance relating to particular transactions and events does not exist. With regard to the so-cal...
Article
The Sarbanes-Oxley Act of 2002 has transformed the institutional environment in the US by making the audit committee responsible for the appointment, compensation and oversight of the auditor. We examine whether this institutional change successfully resolves the alleged problem of an unconscious favoring of the management (Bazerman et al. 1997, 20...
Article
Abstract This paper is a response to the critical comments of Alexander (2006) and Nobes (2006) on our article on revenue recognition, which was published last year in this journal (Wüstemann and Kierzek, 2005). While Alexander primarily objects to our statement that there is a ‘requirement of legal certainty in the European Union’, Nobes challenge...
Article
This paper presents arguments with respect to the evaluation and response to risk, placing an emphasis on German corporate governance. It starts by discussing opportunities and limitations of the audit risk approach in detecting accounting and economic risks. Hereafter individual responses to material risks are analyzed by considering potential sho...
Article
The book provides a comprehensive and up-to-date overview of all aspects of the German financial system, grounded in the current discussion about the importance of a country's financial system for its economic development. The common starting points for the book as a whole as well as for all 15 individual chapters are what the respective authors pe...
Article
As there is a strong relationship of disclosure regimes and corporate governance the internationally varying distribution of information rights can be interpreted as a function of different systems of corporate governance. A disclosure system comprises all legally recognized information claims that a system of corporate governance or a financial sy...

Citations

... Accountability has been broadly defined by Bovens (2007) as the relationship between an actor and the group (e.g., society) to which the actor holds an obligation to justify their conduct. It is what enables the evaluation of a stakeholder's performance and pertains to their voluntary decision to provide information about their actions (Bovens et al., 2014). Wieringa (2020) has transferred this concept to algorithms, determining five key elements of algorithmic accountability: (1) the responsible actors, (2) the forum to whom the account is directed, (3) the relationship of accountability between stakeholders and the forum, (4) the criteria that are to be fulfilled to reach sufficient account, and (5) the consequences, good or bad, for the accountable parties. ...
... They may even choose different principles for individual and consolidated statements, as preliminary recital 35 allows [3]. It seems that Member States were not able to agree on harmonization of the principle (or its rejection) and had to compromise by allowing Member State discretion (Florstedt et al., 2015). This hinders harmonization, consistency and comparability of statements among firms and countries. ...
... Therefore it yields a production function in which the number of hours of the inspection is explained by various influence variables that reflect the case-specific tax risk and the combined control risk. Similarly to producing audits of annual accounts (Koch and Wüstemann, 2012, pp.509-511; Hackenbrack and Knechel, 1997, p.485; Banker et al., 2003, pp.258-260), the output of worked hours (x) can be determined through the following formula: ...
... Notwithstanding a de jure answer to the normative problem whether all those formats are consistent with IAS 1, we do observe a non-uniform presentation of financial instruments across Europe. Since theory predicts managerial flexibility in recognition and disclosure as one effect of inconsistent accounting rules (Wüstemann and Kierzek (2007)), it is at least possible that the inconsistency between the general presentation principles under IAS 1 and the more specific rules under IFRS 7 has actually driven the variety of disclosure choices. If we accept that a consequence of a non-uniform application of accounting rules is a lack of comparability and thereby a severe violation of the theoretical concept of decision-usefulness that is very strongly articulated by the IFRS Conceptual Framework, this finding calls for activity of either the standard setter itself or of the European enforcement institutions. ...
... According to the literature on cognitive or behavioural biases and heuristics, observers are frequently assumed to be rational actors even though findings suggest that individual judgment, decision making and behaviour do not depend solely on logical reasoning but also on cognitive biases and heuristics (Fama, 1980;Kahneman & Tversky, 1979;Marnet, 2005;Tversky & Kahneman, 1974). Although the presence of expertise does not hold observers off using cognitive heuristics, it does reduce the resulting bias (Koch & Wüstemann, 2010). For instance, expertise gained from professional experience reduces anchoring effects as the observers use more appropriate and internal anchor values (Butler, 1986). ...
... According to, Abu Shook (2010) Independence and objectivity of the auditor are the significant factors that causes reliability and credibility of financial statement. The auditor independence increases by his experience, his specialty and the efficiency of the internal auditing (Koch, Weber, & Wüstemann, 2011). Banks should allow the external auditors to be independence in their judgements, this will enable the external auditors to reveal the real state of the banks financial position and performance and also provide solutions on how to solve the problems and challenges facing the banks, this will in turn save the banks from future distress. ...
... A standard that was consistent with the 'asset-liability' basis of financial reporting implied by both FASB's Conceptual Framework (FASB 1980) and IASB's (adopted from IASC) Framework for the Preparation and Presentation of Financial Statements (IASC 1989), and that used fair value measurement as far as possible, appeared to lead entities to recognise profits on contracts as soon as they were agreed, irrespective of notions of 'realisation' and 'earning' of revenues (Camfferman and Zeff 2015, pp. 356-357; see also Wüstemann and Kierzek 2005). Two groups, each advocating a different solution for revenue recognition, came to be known as the 'space cadets' (who supported the pervasive use of fair values in revenue recognition) and the 'dinosaurs' (who supported an approach involving allocation of the total consideration to different aspects of a contract). ...
... In this regard, the reporting quality would inevitably differ (Ball, 2006). Past studies (Wüstemann & Kierzek, 2006) have documented that accounting practices tend to be strongly influenced by rules rather than contents of the rules. Other studies (Brown & Tarca, 2012;Odia & Ogiedu, 2013;Samaha & Khlif, 2016) have also indicated that there were compliance gaps in the implementation of the IFRS across the world, particularly in less developed countries. ...
... In other words, the authors are favouring a more rule-based approach for high-quality disclosures. Much has been written on whether standards should be principle-based or rulebased (Agoglia et al., 2011;Wüstemann and Wüstemann, 2010), and the debate continues. ...