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By Harvey Schwartz, Harvey Ed. Schwartz, Bill N. Schwartz

"Advances in Accounting schooling" is a refereed, educational examine annual whose objective is to aid meet the wishes of college individuals attracted to how one can enhance their lecture room guide. We put up considerate, well-developed articles which are readable, proper and trustworthy. Articles will be both empirical or non-empirical. They emphasize pedagogy, i.e., explaining how school individuals can increase their instructing tools or how accounting devices can enhance their curricula/programs.

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Thus, for a high-type firm, there is a 90% chance that the dividend will be 100. For low-type firms, a random number between zero and eight yields a dividend of 0 and a random number of nine yields a dividend of 100. The instructor should Experiential Learning in Auditing 29 Table 2. Presentation of Results of Facilitation of Investment Experiment (Based on an Actual Classroom Experiment). Asset A Asset B Asset C Asset D Disclosure: High Sale Price: 85 Dividend: 0 Disclosure: Low Sale price: 30 Dividend: 0 Disclosure: High Sale price: 80 Dividend: 100 Disclosure: High Sale price: 70 Dividend: 0 Total number of investments made = 2 Total expected surplus if seller made investment for all assets: 4(70) = 280 Total expected surplus given the actual number of investments made: 2(70) + 2(10) = 160 draw a different random number for each asset.

Presentation of Results of Auditor Bidding Experiment (Based on an Actual Classroom Experiment). Auditor–Bidder 1 Auditor–Bidder 2 Auditor–Bidder 3 Round 1 Year 1 Bids 85 120 Year 2 Bids 101 110 80 Profit: −20 85 Profit: 35 Round 2 Year 1 Bids 75 Year 2 Bids 120 52 Profit: −48 99 Profit: 49 Round 3 Year 1 Bids 54 55 Year 2 Bids 100 100 90 100 52 Profit: −48 99 Profit: 49 Note: First-year audit cost is 100; Second-year audit cost is 50. a 50 loss in the first year in order to gain the second-year incumbency.

Without reliable auditing, the nature of the actions taken may remain hidden from investors for a lengthy period of time. This information asymmetry can create an incentive for managers to act in a way that is consistent with their self-interest, but conflicts with the Experiential Learning in Auditing 27 interests of the stakeholders. By increasing the reliability of financial disclosures, auditing increases the visibility of actions, including those that stakeholders do not want. This increase in the visibility of actions should help stakeholders provide incentives for managers to make investments that increase the value of the firm.

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