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The Asymmetric Market Valuation Of Special Items And Accounting Conservatism, Madeline Kay Trimble
The Asymmetric Market Valuation Of Special Items And Accounting Conservatism, Madeline Kay Trimble
Undergraduate Honors Theses
This thesis investigates the asymmetric market valuation of both negative and positive special items as explained by accounting conservatism. I argue that special items, also known as nonrecurring operating gains and losses, have asymmetric market valuations, as tested using earning response coefficients (ERC). I believe that this difference in ERC between positive and negative special items can be explained by accounting conservatism. This thesis has two main findings: (1) an asymmetry exists in the valuation of positive and negative special items; and (2) the asymmetry can be explained by the idea of accounting conservatism, which is the tendency that firms …
The Self-Fulfilling Prophecy's Effect On An Auditor's Issuance Of A Gco, Trey M. Stone
The Self-Fulfilling Prophecy's Effect On An Auditor's Issuance Of A Gco, Trey M. Stone
Undergraduate Honors Theses
This paper reports on the effect of a self-fulfilling prophecy on issuing a going concern opinion. A thorough analysis of the academic accounting literature and the popular press is performed to develop a better understanding of the rationales used by auditors in their decision to issue, or not to issue a going concern opinion. Based on the input of an expert panel, a literature review, and other quantitative criteria, the visibility and importance of these rationales is determined. A questionnaire is then developed to measure if the self-fulfilling prophecy has a role in auditors' decision to issue, or not to …