CALLOWAY SCHOOL OF BUSINESS AND ACCOUNTANCY

James Cotter, and George Aldhizer, III
Do Auditors Charge for Financial Risk?
Awarded $3,500 for the period 4/15/05 to 4/14/06
Source: WFU Social, Behavioral, and Economic Science Research Fund

In early 2001, the Securities and Exchange Commission (SEC) changed its disclosure rules requiring listed companies to separately report their external audit fees. This study examines the relation between these publicly reported audit fees and the financial risks faced by external auditors. Descriptive and statistical results indicate a significant positive relation between several of the financial risk variables and audit fees. More specifically, the authors find a significant positive relation between market risk (beta), client excess return risk (market model residual variance) and overvaluation risk (price-to-book ratio), and audit fees. This study’s results will help audit firms recognize the potential risks of certifying high financial risk clients and charge requisite fees for these services.

G. Page West

• Kauffman Campuses Initiative – Entrepreneurship and Liberal Arts: Building Campus Culture and Developing an Integrated Educational Model
  Awarded $460,000 for the period 7/1/06 to 6/30/07
  Source: Kauffman Foundation
  The program seeks to build a sustainable culture of entrepreneurship at Wake Forest University. Efforts include:
  • creating a university-level office;
  • initiating a multiyear communication program to create greater awareness and understanding of entrepreneurship within the liberal arts community;
  • educating and inspiring liberal arts faculty to become entrepreneurship champions;
  • adding courses in entrepreneurship and creativity throughout the curriculum;
  • providing crossdisciplinary and experiential learning opportunities related to entrepreneurship;
  • adding 4 new liberal arts faculty positions to enhance teaching resources for the entrepreneurship curriculum;
  • enhancing opportunities for students to become involved in social entrepreneurship, consistent with the university's Pro Humanitate motto;
  • establishing a university center to support entrepreneurial efforts outside the normal curriculum; and
  • establishing a fifth-year entrepreneurship institute to support postgraduates completing entrepreneurial projects begun as undergraduates.
  A Year of the Entrepreneur will spotlight the program’s accomplishments. At that point, curriculum and resources will support any student, from first year to graduate school, in any discipline, who wants to learn about and to pursue entrepreneurship.
• Venture Science E-Teams for a Liberal Arts Institution
  Awarded $2,000 for the period 9/1/02 to 9/1/03
  Source: NCIIA preaward

The Calloway School is establishing a new Center for Undergraduate Entrepreneurship to promote innovative and inventive approaches to product development and marketing for science students. The center will target the many undergraduates in the natural sciences, information systems, and computer science who are also interested in learning how to start new ventures that leverage their disciplinary training. They will receive formal education in intellectual property, venture capital, inventing, and entrepreneurship as well as problem-solving and team-building. Partnered with business students trained in entrepreneurial education, they will form E-teams that will develop new ventures based on scientific inventions.