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J. Reed Smith - Indiana University, Kelley School of Business. Indianapolis, IN, US

J. Reed Smith J. Reed Smith

Professor of Accounting | Indiana University, Kelley School of Business

Indianapolis, IN, UNITED STATES

Reed Smith's research focuses primarily on the economics of fraud and auditing and investigating connections between the two.

Secondary Titles (3)

  • Professor of Accounting
  • Katz, Sapper & Miller Faculty Fellow
  • Chair of Indianapolis Graduate Accounting Programs


A professor at the Kelley School of Business, J. Reed Smith has been teaching and researching in accounting for 34 years. He’s a Fullbright Scholar, chairperson of the Kelley School's Graduate Accounting Programs in Indianapolis, an international accounting expert and the Katz, Sapper & Miller LLP Faculty Fellow.

A Fulbright Scholar, Smith is one of just a handful of professors in the country tackling the theoretical issues of accounting through modeling. His research focuses primarily on studying the economics of fraud and auditing and investigating connections between the two. Because data on fraud is proprietary and often very difficult to find, Smith uses modeling—the use of assumptions and sets of mathematical equations—to better understand, and sometimes predict, how and why fraud happens.

“Success is writing up a model that’s both institutionally rich and intellectually honest,” Smith explains. “It’s about being able to capture and formalize interesting observations that we haven’t seen before.”

Smith received his PhD in accounting and management information systems from The Ohio State University. He received his Master of Accountancy from the University of Tennessee, Knoxville.

Industry Expertise (3)




Areas of Expertise (3)

Game Theory

Accounting Information Systems


Education (3)

The Ohio State University: Ph.D., Accounting and Management Information Systems 1989

University of Tennessee, Knoxville: MAcc, Accounting 1984

University of Tennessee, Knoxville: B.Sc, Business Administration 1983

Articles (2)

The Strategic Effects of Auditing Standard No. 5 in a Multi-Location Setting

AUDITING: A Journal of Practice & Theory

Evelyn R Patterson, J Reed Smith

2016 We extend thanks to the participants of the 2012 University of Cincinnati Economics Symposium and, especially, P. K. Sen, Jens Stefan, and Somnath Das for their comments. An earlier version of this paper was presented at the 2012 American Accounting Association Annual Meeting and we thank the participants for their comments, as well. We also thank two anonymous reviewers and W. Robert Knechel (editor) for their helpful comments. We gratefully acknowledge the summer research grants given by the Kelley School of Business, Indiana University, that helped fund this project.

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The effects of Sarbanes-Oxley on auditing and internal control strength

The Accounting Review

Evelyn R Patterson, J Reed Smith

2007 We provide a theoretical investigation of the effects of the Sarbanes‐Oxley Act of 2002 on auditing intensity and internal control strength. We propose a model of strategic auditing in which the auditor can use resources for both internal control tests and substantive tests, while the manager can choose the strength of internal controls and the amount of fraud. We find that control tests are a valuable tool for the auditor when control strength is informative about the likelihood of fraud. We find that Sarbanes‐Oxley has the desired effect of inducing stronger internal control systems and less fraud, but does not necessarily induce higher levels of control testing. Our model suggests that audit risk increases as a result of the Sarbanes‐Oxley Act.

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