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- Department of Accounting and Finance Faculty Scholarship and Creative Works (63)
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Articles 31 - 60 of 68
Full-Text Articles in Business
Multilevel Approach To Sustainability Report Assurance Decisions, Belen Fernandez-Feijoo, Silvia Romero, Silvia Ruiz
Multilevel Approach To Sustainability Report Assurance Decisions, Belen Fernandez-Feijoo, Silvia Romero, Silvia Ruiz
Department of Accounting and Finance Faculty Scholarship and Creative Works
Using generalised linear mixed models as a statistical tool, this paper analyses the factors that explain the decision of a company to assure their sustainability report and of the choice of a Big 4 auditor as assuror. Specifically, we investigate the variables that affect the two dependent variables, existence of assurance and the profile of the assuror, at two different levels: the characteristics of the reporting company, and the country in which the company is located. Previous literature has explained this relationship as the result of linear regression models, considering only the fixed effects of the factors. Taking into account …
Water Contamination, Land Prices, And The Statute Of Repose, John F. Chamblee, Carolyn A. Dehring, Craig A. Depken, Joseph Nicholson
Water Contamination, Land Prices, And The Statute Of Repose, John F. Chamblee, Carolyn A. Dehring, Craig A. Depken, Joseph Nicholson
Department of Accounting and Finance Faculty Scholarship and Creative Works
We examine how water contamination risk from an inactive hazardous waste site is capitalized into surrounding vacant land prices. After public knowledge of the first instance of off-site contamination, we find that shallow groundwater contamination potential is negatively capitalized into land prices, as is proximity to a known contaminated well. Public knowledge of off-site contamination and associated land price changes occur after the North Carolina’s 10-year statute of repose. Our findings raise questions concerning such statutes when environmental contamination has a long latency period, especially given a recent Supreme Court ruling that Superfund law does not preempt state statutes of …
Toward Effective Big Data Analysis In Continuous Auditing, Juan Zhang, Xiongsheng Yang, Deniz Appelbaum
Toward Effective Big Data Analysis In Continuous Auditing, Juan Zhang, Xiongsheng Yang, Deniz Appelbaum
Department of Accounting and Finance Faculty Scholarship and Creative Works
Big Data now pervades every sector and function of the global economy. This paper focuses on the gaps between Big Data and the current capabilities of data analysis in continuous auditing (CA). It identifies four dimensions of Big Data and five subsequent gaps: namely, data consistency, integrity, aggregation, identification, and confidentiality. For each gap, the paper outlines challenges and possible solutions derived from traditional data systems, which can be further applied to CA systems in an era of Big Data.
What Happens When A Stock Is Added To The Nasdaq-100 Index? What Doesn’T Happen?, Susana Yu, Gwendolyn Webb, Kishore Tandon
What Happens When A Stock Is Added To The Nasdaq-100 Index? What Doesn’T Happen?, Susana Yu, Gwendolyn Webb, Kishore Tandon
Department of Accounting and Finance Faculty Scholarship and Creative Works
Purpose – Prior research on additions to the S&P 500 and the smaller MidCap 400 and SmallCap 600 indexes reach different conclusions regarding the key variables that explain the cross-section of announcement period abnormal returns. Most notable in this regard is that liquidity measures, long thought to be of importance, do not appear to explain abnormal returns of the S&P 500 when other factors are controlled for. By contrast, they do appear to matter for additions to the smaller stock indexes. To explore this difference, the purpose of this paper is to analyze the abnormal returns upon announcement that a …
Current Developing Trend Of Sales Tax On E-Business, James G.S. Yang, Peter Lohrey, Leonard Lauricella
Current Developing Trend Of Sales Tax On E-Business, James G.S. Yang, Peter Lohrey, Leonard Lauricella
Department of Accounting and Finance Faculty Scholarship and Creative Works
This article explores the development of sales tax on e-business. It points out that the problem was rooted in the fact that the seller is required to collect and remit the tax to the buyer's state government. If the seller and the buyer do not reside in the same state, the buyer's state government has no jurisdiction over the seller, unless there is a "physical presence" of the seller in the buyer's state. A state government can require an out-of-state seller to collect sales tax from the in-state buyer only when there is "physical presence." However, what constitutes "physical presence" …
Economic Value Of Modeling Covariance Asymmetry For Mixed-Asset Portfolio Diversifications, Jian Zhou, Joseph Nicholson
Economic Value Of Modeling Covariance Asymmetry For Mixed-Asset Portfolio Diversifications, Jian Zhou, Joseph Nicholson
Department of Accounting and Finance Faculty Scholarship and Creative Works
Mounting evidence from the literature points to the existence of covariance asymmetry for financial assets. That is, conditional volatility and correlation of financial returns tend to rise more after negative return shocks than after positive ones of the same size. This paper extends the literature by investigating whether investors could gain significant economic benefits from incorporating the feature into mixed-asset portfolio diversifications. We carry out the investigation for a portfolio consisting of US stock, REITs, and the risk-free asset, and find that covariance asymmetry is indeed a value-added feature for mixed-asset diversifications. This conclusion is robust to different portfolio performance …
Topics And Methods In Forensic Accounting Research, James Digabriele, Wm Dennis Huber
Topics And Methods In Forensic Accounting Research, James Digabriele, Wm Dennis Huber
Department of Accounting and Finance Faculty Scholarship and Creative Works
Purpose: The purposes of this paper are to highlight those topics of forensic accounting that have received little or no attention in the forensic accounting research that has been published in forensic accounting research journals; discover what research methods have been most commonly used; and identify research methods that have been infrequently used. Design/methodology/approach: This is a descriptive research study that explores the topics and methods used in forensic accounting research published in forensic accounting journals. Findings: Fraud and quantitative methods make up the largest percentage of topics and research methods published in forensic accounting journals. Research limitations/implications: Limited to …
Commitment To Corporate Social Responsibility Measured Through Global Reporting Initiative Reporting: Factors Affecting The Behavior Of Companies, Belen Fernandez-Feijoo, Silvia Romero, Silvia Ruiz
Commitment To Corporate Social Responsibility Measured Through Global Reporting Initiative Reporting: Factors Affecting The Behavior Of Companies, Belen Fernandez-Feijoo, Silvia Romero, Silvia Ruiz
Department of Accounting and Finance Faculty Scholarship and Creative Works
The increasing importance of Corporate social responsibility to entrepreneurial policies has made it a leading topic in the literature. The strategic integration of Corporate social responsibility in the business core implies the communication between a company and its stakeholders. Sustainability reports are recognized worldwide as a tool that companies use to communicate their socially responsible behavior. The way companies communicate through their reports indicates their level of commitment to Corporate social responsibility. The objective of this paper is to analyze companies' behavior towards Corporate social responsibility based on their disclosure practices. We define four possible types of behavior: Novice, Cautious, …
The Relationship Of Cognitive Effort, Information Acquisition Preferences And Risk To Simulated Auditor–Client Negotiation Outcomes, Gary Kleinman, Dan Palmon, Kyunghee Yoon
The Relationship Of Cognitive Effort, Information Acquisition Preferences And Risk To Simulated Auditor–Client Negotiation Outcomes, Gary Kleinman, Dan Palmon, Kyunghee Yoon
Department of Accounting and Finance Faculty Scholarship and Creative Works
The auditor–client relationship is a legally-mandated relationship in which one party, the auditor, is hired and paid by the auditee (client) to inform third party stakeholders as to whether the client firm’s financial statements are presented in conformity with national financial accounting standards. When these statements do not meet the criteria for acceptable financial statements, a negotiation situation may arise in which the auditor is presumed to act in the best interests of shareholders and creditors who have no independent knowledge of the auditor’s findings. The client management may then feel forced to defend its numbers. The result is a …
Audit Quality: A Cross-National Comparison Of Audit Regulatory Regimes, Gary Kleinman, Beixin Lin, Dan Palmon
Audit Quality: A Cross-National Comparison Of Audit Regulatory Regimes, Gary Kleinman, Beixin Lin, Dan Palmon
Department of Accounting and Finance Faculty Scholarship and Creative Works
The importance of fostering more accurate audits has been heightened by a series of highprofile accounting scandals at the beginning of the millennium. These scandals prompted more stringent regulations over corporate governance and financial reporting and the creation of audit oversight bodies as the Public Company Accounting Oversight Board (PCAOB) in the United States and the Public Oversight Board (POB) in the United Kingdom. In parallel, the growing globalization of business has brought forth calls for adherence to a common set of International Financial Reporting Standards (IFRS). Even if a common standard is promulgated, it will not lead to similar …
Technology In Audit Engagements: A Case Study, Miklos A. Vasarhelyi, Silvia Romero
Technology In Audit Engagements: A Case Study, Miklos A. Vasarhelyi, Silvia Romero
Department of Accounting and Finance Faculty Scholarship and Creative Works
Purpose: The audit of corporations is now dependent on the examination of corporate computer systems. Although tools and techniques have been available for decades, there are major limitations on the audits of corporate systems by external auditors. This paper aims to examine external auditor usage of technology benefiting from a unique opportunity of reviewing a large CPA firm's audit work papers and interviewing their audit staff to examine the following questions: are auditors using the available technological tools? What are the difficulties they face in using these tools? Are there mediators to enhance usability? Why and what circumstances surround their …
Women On Boards: Do They Affect Sustainability Reporting?, Belen Fernandez-Feijoo, Silvia Romero, Silvia Ruiz-Blanco
Women On Boards: Do They Affect Sustainability Reporting?, Belen Fernandez-Feijoo, Silvia Romero, Silvia Ruiz-Blanco
Department of Accounting and Finance Faculty Scholarship and Creative Works
Sustainable reports are the basic tool used to reflect and communicate stakeholder dialogue. Therefore, sustainability reporting has become a key element for strategic management. Companies' strategies are defined and developed by their boards of directors. This study explores the relationship between sustainability reporting and the existence of at least three women on the board of directors. Our results show that in countries with a higher proportion of boards of directors with at least three women, the levels of CSR reporting are higher. We also find that countries with higher gender equality have more companies with boards of directors with at …
Effect Of Stakeholders' Pressure On Transparency Of Sustainability Reports Within The Gri Framework, Belen Fernandez-Feijoo, Silvia Romero, Silvia Ruiz
Effect Of Stakeholders' Pressure On Transparency Of Sustainability Reports Within The Gri Framework, Belen Fernandez-Feijoo, Silvia Romero, Silvia Ruiz
Department of Accounting and Finance Faculty Scholarship and Creative Works
Transparency is a quality of corporate social responsibility communication that enhances the relationship between the investors and the company. The objective of this paper is to analyze if the transparency of the sustainability reports is affected by the relationship of companies in different industries with their stakeholders. If this were the case, it would indicate that the pressure of significant stakeholders determines the required level of transparency of the reports. We find that the pressure of some groups of stakeholders (customers, clients, employees, and environment) improves the quality of transparency of the reports. We extend previous research by studying the …
A Theoretical Analysis Of Iso9000 Suppliers, Chiaho Chang
A Theoretical Analysis Of Iso9000 Suppliers, Chiaho Chang
Department of Accounting and Finance Faculty Scholarship and Creative Works
This paper looks at the economic behavior of suppliers under different ISO9000 standards, especially that of ISO9001 and ISO9002. Considering the information asymmetry, given the same quality provided, the cost-reducing efforts of the ISO9001 SUPPLIER and ISO9002 SUPPLIER under a fixed, cost-plus contract are investigated. The result shows that the cost-reducing effort of the ISO9002 SUPPLIER is in line with the main manufacturer's expectations while the ISO9001 SUPPLIER is able to keep some of the information rent and exerts less effort. The bargaining power of the ISO9001 SUPPLIER is also stronger relative to that of the ISO9002 SUPPLIER. It is …
Characteristics Of Failed U.S. Commercial Banks: An Exploratory Study, Fatima Alali, Silvia Romero
Characteristics Of Failed U.S. Commercial Banks: An Exploratory Study, Fatima Alali, Silvia Romero
Department of Accounting and Finance Faculty Scholarship and Creative Works
This study uses survival analysis to determine how early the indications of bank failure can be observed. We find that banks with high loan to asset and high personal loan to assets ratios are more likely to survive. Older banks and banks with high real estate and agricultural loans, loan loss allowance, loan charges off and non-performing loans to assets ratio are more likely to fail. It is possible to predict survival functions of <50% for failed banks, 3years or less before failure. Moreover, we find that most of the variables present a behaviour that departs from Benford's Law.
Benford's Law: Analyzing A Decade Of Financial Data, Fatima A. Alali, Silvia Romero
Benford's Law: Analyzing A Decade Of Financial Data, Fatima A. Alali, Silvia Romero
Department of Accounting and Finance Faculty Scholarship and Creative Works
This study uses a decade of financial accounting data to examine if and how they depart from Benford's Law. Using a large sample of U.S. public companies, we conduct an analysis of the first-two digits of data items generally used in research to measure total accruals and discretionary accruals and where fraud, restatements, and enforcement actions are revealed. We break down a decade of data into six subperiods; pre-SOX Period (2001), SOX 1 Period (2002-2003), SOX 2 Period (2004-2006), SOX 3 Period (2007), Crisis 1 Period (2008), and Crisis 2 Period (2009-2010). We find different indicators of manipulation during the …
Does Compensation Structure Alleviate Personal Ceo Risks?, Richard Lord, Yoshie Saito
Does Compensation Structure Alleviate Personal Ceo Risks?, Richard Lord, Yoshie Saito
Department of Accounting and Finance Faculty Scholarship and Creative Works
Are CEO compensation packages designed to alleviate some of the personal risks that they bear? We employ a unified framework to test the relationship between the four major components of executive pay; salary, bonuses, option grants and restricted stock grants, and four factors that increase CEOs' personal risks; the real value of their pay, the riskiness of firm equity, the value of their equity portfolios, and the delta of these equity holdings. We show that personal risks that CEOs face have significant effects on the design of their compensation contracts. Our results suggest that the portion of salary compensation decreases …
A Case Study On The Determination Of Lost Profits For The Forensic Accountant, James Digabriele
A Case Study On The Determination Of Lost Profits For The Forensic Accountant, James Digabriele
Department of Accounting and Finance Faculty Scholarship and Creative Works
This paper illustrates a teaching case study for use in a forensic accounting course. The case study requires students to prepare and/or present their findings for the valuation of lost profits in the framework of a business interruption. Readers obtain requisite financial and qualitative information to complete a valuation of lost profits due to a business interruption.
Abnormal Stock Returns, For The Event Firm And Its Rivals, Following The Event Firm's Large One-Day Stock Price Drop, Susana Yu, Dean Leistikow
Abnormal Stock Returns, For The Event Firm And Its Rivals, Following The Event Firm's Large One-Day Stock Price Drop, Susana Yu, Dean Leistikow
Department of Accounting and Finance Faculty Scholarship and Creative Works
Purpose – The purpose of this paper is to examine intra-industry contagion and the following apparent violations of the efficient market hypothesis around large one-day price decline events in individual stocks. Design/methodology/approach – The paper examines daily stock returns around one-day price declines of 10 percent or more for event stocks and their rivals. Using techniques similar to those used in Bremer and Sweeney and Cox and Peterson, the paper includes event stocks whose prices are at least $10 per share prior to the event to reduce the possible price reversal induced by bid-ask price bounce. As is typical for …
Auditor Independence: Third Party Hiring And Paying Auditors, Silvia Romero
Auditor Independence: Third Party Hiring And Paying Auditors, Silvia Romero
Department of Accounting and Finance Faculty Scholarship and Creative Works
Purpose – Although the Sarbanes Oxley Act (SOX) has introduced rules to avoid auditor independence impairment, there are still issues that are not sufficiently solved. The purpose of this paper is to discuss the problems of auditor independence that arise by auditors being hired and paid by the auditee, and by SOX requiring rotation of only the lead audit partner. Design/methodology/approach – The paper takes the form of a discussion paper, exploring alternatives to overcome the mentioned issues of independence. Findings – The paper presents an alternative where auditors are hired and paid by an external third party. Besides this …
Accentuated Intraday Stock Price Volatility: What Is The Cause?, Deniz Ozenbas, Michael S. Pagano, Robert A. Schwartz
Accentuated Intraday Stock Price Volatility: What Is The Cause?, Deniz Ozenbas, Michael S. Pagano, Robert A. Schwartz
Department of Accounting and Finance Faculty Scholarship and Creative Works
In equity markets, the opening and closing of trading are particularly stressful periods. Ozenbas, Pagano, and Schwartz investigate the quality of price determination at these times (compared to midday periods) for large-, mid-, and smallcapitalization stocks on the NYSE, NASDAQ, and London Stock Exchange. Using three different metrics, they consistently find lower quality at both the open and the close.The deterioration of market quality at openings is greatest for large-cap stocks, but no systematic association with cap size is observed at the close. Large-cap stocks evidently lead smaller-cap stocks in finding new equilibrium values, and accentuated volatility at the open …
Analysis Of Business Week Hot-Growth Stocks: Momentum And Fundamental Investment Approaches, Susana Yu, Sang Hoon Kim
Analysis Of Business Week Hot-Growth Stocks: Momentum And Fundamental Investment Approaches, Susana Yu, Sang Hoon Kim
Department of Accounting and Finance Faculty Scholarship and Creative Works
This paper extends Bauman et al's (2002) study, and investigates the risk-adjusted returns for the first-timers and repeaters of the Business Week hot-growth stocks. Chan et al's (1996) short-term 6-month momentum model provides significant returns for the first-timers as well as for stocks that had already appeared on the list at least once, the repeaters. On the other hand, Mohanram's (2005) fundamental model provides significant returns for the repeaters only. A portfolio formed by purchasing the repeaters and short selling the first-timers generates significant returns in 10 out of 12 months after publication. We conclude that profitable long/short portfolios can …
The Effects Of Etf Splits On Returns, Liquidity, And Individual Investors, Susana Yu, Gwendolyn Webb
The Effects Of Etf Splits On Returns, Liquidity, And Individual Investors, Susana Yu, Gwendolyn Webb
Department of Accounting and Finance Faculty Scholarship and Creative Works
Purpose – The purpose of this paper is to extend the literature on the effects of stock splits from mutual funds splits and the QQQ split to 20 exchange traded funds (ETFs) that span a wide variety of indexes. The split sample is compared to a non-split control sample with similar characteristics between 2000 and 2006. The objectives of this study are to investigate whether the results are different between the split sample and the control sample; and whether these results are similar to other investment vehicles in the existing literature. Design/methodology/approach – The paper examines stock excess returns, total …
A Relative Comparison Of Leading Supply Chain Management Software Packages, Zhongxian Wang, Ruiliang Yan, Kimberly Hollister, Ruben Xing
A Relative Comparison Of Leading Supply Chain Management Software Packages, Zhongxian Wang, Ruiliang Yan, Kimberly Hollister, Ruben Xing
Department of Information Management and Business Analytics Faculty Scholarship and Creative Works
Supply Chain Management (SCM) has proven to be an effective tool that aids companies in the development of competitive advantages. SCM Systems are relied on to manage warehouses, transportation, trade logistics and various other issues concerning the coordinated movement of products and services from suppliers to customers. Although in today’s fast paced business environment, numerous supply chain solution tools are readily available to companies, choosing the right SCM software is not an easy task. The complexity of SCM systems creates a multifaceted issue when selecting the right software, particularly in light of the speed at which technology evolves. In this …
The Influence Of Managerial Incentives On The Resolution Of Financial Distress, Dong-Kyoon Kim, Chuck C.Y. Kwok
The Influence Of Managerial Incentives On The Resolution Of Financial Distress, Dong-Kyoon Kim, Chuck C.Y. Kwok
Department of Accounting and Finance Faculty Scholarship and Creative Works
This study investigates the influence of managerial incentives on the resolution of financial distress. Our model predicts that when creditors and equityholders prefer different resolution methods, the likelihood of choosing Chapter 11 over private renegotiation is related to the ownership structure of the distressed firm. Empirical test results using a sample of 81 voluntary Chapter 11 firms and 65 private workout firms support the model's prediction. We show that managerial ownership is positively related to the incidence of Chapter 11 filing when there is conflict between equityholders and creditors over the choice between Chapter 11 and a private renegotiation. Consistent …
Corporate Ownership Structure And Innovation: Evidence From Taiwan's Electronics Industry, Chen Lung Chin, Yu Ju Chen, Gary Kleinman, Picheng Lee
Corporate Ownership Structure And Innovation: Evidence From Taiwan's Electronics Industry, Chen Lung Chin, Yu Ju Chen, Gary Kleinman, Picheng Lee
Department of Accounting and Finance Faculty Scholarship and Creative Works
The agency problem of listed companies in East Asia is closely related to their typically concentrated ownership structures. Tight control creates an entrenchment problem that allows the controlling owners' self-interested behaviors to go unchallenged internally by the boards of directors or externally by takeover markets. The primary objective of this paper is to explore the association between the ownership and control structure and innovation. The ownership and control structure is measured first as the divergence between the ultimate owner's voting rights and the ultimate owner's cash flow rights, and second by the presence of ultimately controlling shareholder's family member as …
Novice And Expert Judgment In The Presence Of Going Concern Uncertainty The Influence Of Heuristic Biases And Other Relevant Factors, Asokan Anandarajan, Gary Kleinman, Dan Palmon
Novice And Expert Judgment In The Presence Of Going Concern Uncertainty The Influence Of Heuristic Biases And Other Relevant Factors, Asokan Anandarajan, Gary Kleinman, Dan Palmon
Department of Accounting and Finance Faculty Scholarship and Creative Works
Purpose - Prior literature provides clear evidence that the judgments of experts differ from those of non-experts. For example, Smith and Kida concluded that the extent of common biases that they investigated often are reduced when experts perform job related tasks as compared to students. The aim in this theoretical study is to examine whether "heuristic biases significantly moderate the understanding of experts versus novices in the going concern judgment?" Design/methodology/approach - The authors address the posited question by marshalling extant literature on expert and novice judgments and link these to concepts drawn from the cognitive sciences through the Brunswick …
An Analytical Approach For Making Management Decisions Concerning Corporate Restructuring, Beixin Lin, Zu Hsu Lee, Richard Peterson
An Analytical Approach For Making Management Decisions Concerning Corporate Restructuring, Beixin Lin, Zu Hsu Lee, Richard Peterson
Department of Accounting and Finance Faculty Scholarship and Creative Works
Internal corporate restructuring activities, such as downsizing, sale or termination of a business line, facility closure, consolidation, or relocation, often occur as part of managerial strategies intended to improve efficiency, control costs, and adapt to an ever-changing business environment. Such actions frequently result in fundamental changes in a business's organization, its strategies, its systems, and its operations. They can unsettle a business and often significantly affect current and future earnings and cash flows. In this paper we propose a novel decision-making model through the use of the dynamic programming technique to illustrate how management can determine the optimal timing and …
Central Bank Independence, Inflation Variability, And The Revenue Smoothing Hypothesis, Hermann Sintim-Aboagye, David R. Tufte
Central Bank Independence, Inflation Variability, And The Revenue Smoothing Hypothesis, Hermann Sintim-Aboagye, David R. Tufte
Department of Accounting and Finance Faculty Scholarship and Creative Works
This paper examines the revenue-smoothing hypothesis, which posits that an optimizing government will adjust both taxes and inflation to meet shocks to government spending. Our contribution is to examine this through the lens of a new methodology that relates both the first and second moments of inflation rates to central bank independence (CBI) measures. Unlike existing least-squares-based CBI papers, this study uses a maximum likelihood framework that facilitates the direct inclusion of CBI parameters in the residual covariance matrix. This new approach allows for a more intensive use of information contained in the CBI indexes and the estimates obtained are …
Emerging Economies, Turnover Rates And Inflation Variability: A Comparison Of Generalized Maximum Likelihood And Sur Models, Hermann Sintim-Aboagye
Emerging Economies, Turnover Rates And Inflation Variability: A Comparison Of Generalized Maximum Likelihood And Sur Models, Hermann Sintim-Aboagye
Department of Accounting and Finance Faculty Scholarship and Creative Works
Theoretical exposition and empirical evidence in central bank independence (CBI) literature confirm an inverse relationship between inflation and measures of CBI mostly in developed economies. Based on this ex ante information on CBI-inflation tradeoff, this paper proposes two functional forms for the diagonal and off diagonal elements in the residual covariance matrix in the estimation process. The proposed functional forms are used in a generalized maximum likelihood and then in a generalized least squares (GLS) (with the restricted covariance matrix) framework for the empirical test. The results are compared to the outcome of an SUR model (unrestricted). The tests involve …