Erik Boyle

Headshot of Erik Boyle, PhD, CPA

Erik Boyle, PhD, CPA

Assistant Professor, Department of Accounting

304 Carl H. Lindner Hall

513-556-6363

Erik Boyle is an Assistant Professor of Accounting. He joined the University of Cincinnati after completing a PhD from the University of Utah. He also has a B.S. in Accounting and MAcc from Brigham Young University. Erik’s research interests are in the area of auditing; specifically, he is interested in how third-party evaluations of auditors influence auditor motivations and decision-making. His dissertation investigates the impact of an auditor’s use of industry norms on client management perceptions of audit quality. His teaching experience includes both auditing and fraud examination. Prior to a career in academia, Erik worked in the audit practice at KPMG. During his time there he worked with clients in the financial services, healthcare, retail, manufacturing, and government industries. He is currently licensed as a CPA in the state of Utah.

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Education

Institution: University of Utah

Location: Salt Lake City, UT

Major: Business Administration

Dissertation: Management Perceptions of Audit Quality: A Qualitative and Quantitative Investigation

Completed: 2015

Degree: PhD

Institution: Brigham Young University

Location: Provo, UT

Major: Accounting

Completed: 2006

Degree: BS

Institution: Brigham Young University

Location: Provo, UT

Major: Professional accounting

Completed: 2006

Degree: Other

Research in progress

Title: Can Accounting Firm Interpretive Guidance Shield Auditors from Negative Litigation Outcomes when Accounting Standards are Ambiguous?

Description: Some accounting standards provide guidance that is ambiguous, which may encourage auditors to rely on other sources to support decisions made under these standards. In this experiment, participants take on the role of a juror in a lawsuit against an audit firm. The auditor is accused of allowing a client to use an improper lease classification method. Two factors are manipulated: the justification method used by the auditor (professional judgment, firm guidance, and industry norms) and the ambiguity of the accounting standards (low and high). I find that auditors who use firm guidance to support their decisions are rated as lower in quality when compared to those who use industry norms and similarly to those who use professional judgment. I also find auditors who use industry norms are assessed lower damages and are less likely to be assessed a guilty verdict. Additionally, I find that jurors have difficulty differentiating between low and high ambiguity in the accounting standards, which provides evidence that jurors are unable to fully understand complex accounting issues in a trial. Thus, other factors in an audit, such as the justification method used for decisions, take on increased importance in evaluating audit quality. I contribute to the literature on auditor justification methods and the potential impact of juror perceptions of audit quality on auditor decisions.

Status: Planning

Research Type: Scholarly

Title: Forgiveness or Betrayal? An Investigation Into Investors’ Reactions of CSR Firms Following an Announcement of an Accounting Misstatement

Description: We experimentally investigate nonprofessional investor reactions to misstatements for companies that issue corporate social responsibility (CSR) reports. We rely upon Stereotype Content Theory and Betrayal Aversion Theory to predict that investor reactions to misstatements will differ based on the level of CSR performance (average vs. high) and misstatement type (unintentional vs intentional). We find that CSR performance generally shields a company from negative investor reactions to both types of misstatements due to investors having a higher assessment of warmth for high-performing CSR companies. When a company experiences a second misstatement, we find that the benefits of high-CSR performance are eliminated if the misstatement is perceived as intentional. Thus, our results provide important information regarding the boundary effects of CSR performance.

Status: On-Going

Research Type: Scholarly

Title: How and Why Does the PCAOB Sanction Auditors? An Analysis of PCAOB Enforcement Actions

Description: We analyze the PCAOB’s auditor enforcement actions to better understand how and why auditors are penalized in a post-SOX environment.

Title: Management Perceptions of Audit Quality:  A Survey Approach

Description: Audit quality is an important topic for auditors, regulators, and academics. We survey members of management to better understand their perspective on audit quality and how they view auditors’ ability to demonstrate it on their engagements. Management’s views on audit quality are important because of the key role they assume in coordinating audit engagements. They are also perceived as a critical voice in the hiring and firing of auditors; thus, auditors have incentives to understand how management evaluates their work. We find that management defines audit quality primarily through the characteristics of the auditor, the audit processes used on an engagement, and the outcomes of the audit. When asked how auditors demonstrate audit quality, however, management focuses predominately on auditor characteristics and processes, while largely ignoring the outcomes of the audit. In addition to surveying management about audit quality, we also obtain feedback on management’s perceptions of the relevance of the CAQ’s Audit Quality Indicators. Management perceives the indicators related to auditor characteristics and processes as most relevant to determining audit quality. Outcome measures, such as PCAOB inspection reports, are viewed as least informative.

Status: On-Going

Research Type: Scholarly

Title: Sport, Sentiment, and Audit

Description: You can access the Sports/Auditing survey by copying and pasting the following URL into your web browser:  http: //cincinnati.qualtrics.com/jfe/form/SV_1Fy7BROUnSH2uPj

Status: Planning

Research Type: Scholarly

Title: The Impact of Industry Norms on Management Perceptions of Audit Quality Under Imprecise Accounting Guidance

Description: I investigate whether an auditor’s use of industry norms as a justification method under ambiguous accounting standards increases management perceptions of audit quality. Using accounting alumni from a large public university as management participants, I find evidence that, although management views industry norms to be a more credible justification method than an auditor’s professional judgment, management evaluates audit quality based on underlying accounting attributes when ambiguity in the accounting standards is low. When ambiguity in the accounting standards is high, however, an auditor’s use of industry norms increases management perceptions of audit quality. Thus, in ambiguous settings, auditors are incentivized to engage in herding behavior through the use of industry norms. Understanding this incentive is especially important as the United States moves toward the use of a more principles-based accounting framework, because the shift from a rules-based framework to a principles-based framework is likely to increase the level of ambiguity in the accounting standards. This study contributes to understanding how auditor decisions can impact management perceptions of audit quality and provides insight into one possible outcome of increasing ambiguity in the accounting standards.

Status: On-Going

Research Type: Scholarly

Title: The Value Add of an Audit in a Post-SOX World

Description: Although researchers commonly acknowledge that public-company audits should add value by improving the precision of financial information via reduced estimation errors, prior literature correctly notes that there is little direct archival evidence to support this assertion. Moreover, regulatory changes beginning with SOX attempt to change managers’ behaviors by increasing their incentives to produce high-quality, low-error financial statements. If these regulations are effective in reducing pre-audit errors, then the role of the audit in error reduction will decline. Using the Amiram, Bozanic, and Rouen (2015) Financial Statement Divergence score as a measure of financial statement error, we examine the role of the audit in reducing public companies’ financial statement error in the post-SOX era. Despite substantial regulatory changes from SOX (and subsequent regulation) that might usurp from auditors the opportunity to improve financial statement precision, we find that an audit continues to be associated with reduced financial statement error and that the size of the effect is economically significant. More importantly, we find that this impact is magnified in the presence of observable company characteristics that increase the opportunity for error to occur (presumably because the audit plan can be adapted to mitigate the risks associated with these company characteristics). In the presence of increased incentives to misreport, the relation is attenuated, but only slightly—suggesting that the audit remains effective in reducing error even when managers have incentive to work at cross-purposes with auditors.

Status: On-Going

Research Type: Scholarly

Presentations

Title: An Investigation into Investors' Reactions toward CSR Companies Following an Accounting Misstatement

Organization: American Accounting Association

Location: Washington, D.C.

Year: 2018

Title: Forgiveness or Betrayal? An Investigation Into Investors’ Reactions of CSR Firms Following an Announcement of an Accounting Misstatement

Location: Milan, Italy

Year: 2018

Title: Forgiveness or Betrayal? An Investigation Into Investors’ Reactions of CSR Firms Following an Announcement of an Accounting Misstatement

Organization: Brigham Young University

Location: Provo, UT

Year: 2016

Title: Examining the Impact of Industry Norms on Management Perceptions of Audit Quality under Imprecise Accounting Guidance

Organization: American Accounting Association

Location: New York City, NY

Year: 2016

Title:  The Impact of Audits in Reducing Financial Statement Error

Organization: Brigham Young University

Location: Provo, UT

Year: 2015