PurposeThe purpose of this study is to advance marketers' understanding of customer‐based brand equity (CBBE) within the context of a B2B financial service marketing setting.Design/methodology/approachTwo nation‐wide studies were used to investigate whether brands are in fact differentiated in the minds of the target audience; test two competing explanations of the formation of CBBE using structural equation analyses; and reconcile satisfaction and CBBE theories within a single theoretical model.FindingsThe results suggest that these customers do differentiate brands, and that Netemeyer et al.'s model of CBBE is generally supported. In addition, the extended model of CBBE proposed herein explains more variance in loyalty intentions, while simultaneously demonstrating the importance of customer satisfaction in CBBE models, and incorporates customer attitudes into conceptualization of CBBE.Research limitations/implicationsFirst, the current research focuses specifically on CBBE. Second, the reported MDS results are exploratory in nature and must be interpreted with caution.Practical implicationsThe results will help financial service marketers measure CBBE as well as relate brand power to customer satisfaction and customer attitude measurement through implementing the proposed framework in their own competitive setting.Originality/valueThe two nation‐wide studies reported herein enhance our understanding of CBBE and its relationship to customer attitudes and satisfaction research within a single theoretical model, as well as identifying the influential roles of both hedonic and utilitarian forms of brand attitudes in the formation of CBBE.

SUMMARY: Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) created a reporting requirement for publicly traded companies that manufacture products using ''conflict minerals'' from the Democratic Republic of the Congo (DRC) or adjoining countries. Under certain circumstances, companies must file a Conflict Minerals Report (CMR) in addition to a Specialized Disclosure Report (Form SD). Companies that claim their products are free of conflict minerals from the DRC must have an audit of their CMR. We investigate the extent to which companies have complied with the new disclosure requirements as well as the current and future auditing implications.

This study is the first in an auditing context to examine auditor susceptibility to memory conjunction errors, a type of systematic memory error that is related to the memory reconstruction process. Conjunction errors occur when memory traces associated with one event are incorrectly attributed to another event during memory reconstruction. Auditors may be particularly susceptible to memory conjunction errors due to their simultaneous exposure to multiple audit clients and their use of standardized audit forms and checklists to capture information. Unrecognized, such errors could adversely affect the efficiency and/or effectiveness of the financial statement audit process. We conducted an experiment that employed practicing audit professionals addressing multiple audit clients. Consistent with our hypotheses, the results indicate that memory conjunction errors in an audit environment are a complex function of (1) the consistency between the audit evidence recalled from an unrelated audit and the characteristics of the client that is the target of the memory reconstruction, (2) the consistency between this recalled audit evidence and the characteristics of the client to which the evidence is actually associated, and (3) the level of risk present in the audit environment that is the target of the memory reconstruction. While research has shown that audit risk factors can generally serve to decrease some types of auditors' memory recognition errors in single client situations (e.g., Sprinkle and Tubbs 1998), our results show that increases in audit risk can actually exacerbate memory errors involving multiple audit clients and memory conjunction errors. Finally, the findings of the study suggest that auditors are not only susceptible to memory conjunction errors, but also that such errors may play a significant role in elements of the audit-planning process related to auditors' likelihood of material error assessments.

Lakeview Lumber, Inc. involves several auditing and accounting issues, including concepts related to Statement on Auditing Standards (SAS) No. 82, Consideration of Fraud in a Financial Statement Audit (AICPA 1997). The case highlights management's potential motivation to manipulate net income in response to a bonus compensation scheme. Lakeview Lumber also provides a framework for discussion of issues related to professional judgment, audit supervision and materiality. More specifically, the case emphasizes the professional judgment required in the estimation of selected account balances and in determining the accounting treatment of transactions related to unusual or extraordinary events. The concept of materiality, in conjunction with the interpretation and application of professional standards, is also discussed. In addition, the case gives students an opportunity to perform analytical review, prepare common-size statements and use the Internet to find professional pronouncements and financial information.

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