Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 4 of 4
Full-Text Articles in Business
Modeling Market Reactions To Auditor Changes Using Variable Selection Algorithms: A Meta-Analysis, Richard Holowczak, David A. Louton, Hakan Saraoglu, Charles Cullinan
Modeling Market Reactions To Auditor Changes Using Variable Selection Algorithms: A Meta-Analysis, Richard Holowczak, David A. Louton, Hakan Saraoglu, Charles Cullinan
Accounting Department Faculty Journal Articles
Market reactions to auditor change filings have been studied over a long period in the literature. We provide a review of the literature on market response to auditor changes and identify a superset of variables used in published research. Applying methods from machine learning to optimize variable selection, we build models that explain market reaction to auditor changes. We compare the performance of our models with the performance of the models that use subsets of variables examined in a select list of studies in the literature. Our meta-analysis results in an improvement in model fit compared to the analysis used …
How Does Variability In Cash Flows And Returns Influence How Top Executives Are Paid?, Kwadwo N. Asare
How Does Variability In Cash Flows And Returns Influence How Top Executives Are Paid?, Kwadwo N. Asare
Accounting Department Faculty Journal Articles
I invoke agency theory to evaluate how top executives’ compensation contracts are structured, conditional on risk in the firm’s operating environment, focusing on the total, fixed, and variable components. The results suggest that companies exert some effort to adhere to agency theoretic principles in designing top executive compensation contracts. However, imperfections in the pay setting process mean that there is ample room for powerful CEOs to seek rents. Furthermore, when risk in the operating environment is measured with volatility in returns, non-CEO top executives sometimes bear greater risk than CEOs, collecting a greater percentage of their compensation in variable pay …
Earnings Persistence And Levels Of The Accrual Ratio And Discretionary Accruals, Kwadwo Asare
Earnings Persistence And Levels Of The Accrual Ratio And Discretionary Accruals, Kwadwo Asare
Accounting Department Faculty Journal Articles
This paper evaluates how persistent earnings and its accrual and cash flow components are conditional on the modified Jones Model discretionary accruals and the accrual ratio. Consistent with prior research cash flows are more persistent than both earnings and the accruals component of earnings. While the difference in persistence of the extreme deciles of Discretionary Accruals are not very large, those of the Accrual Ratio are much larger, suggesting that the Accrual Ratio can be a simple but effective gauge of earnings persistence and can complement Discretionary Accruals as a measure of the persistence dimension of earnings quality.
How Informative Are Fraud And Non-Fraud Firms' Earnings?, Kwadwo Nyarko Asare
How Informative Are Fraud And Non-Fraud Firms' Earnings?, Kwadwo Nyarko Asare
Accounting Department Faculty Journal Articles
This study evaluates how informative the earnings of fraud firms are compared to peer non-fraud firms by assessing informativeness in the context of persistence, analysts’ forecast errors, and stock returns. There are differences in how informative the earnings of fraud firms are to analysts’ forecasts and returns in the pre-fraud period, but not in the fraud period. In the post- fraud period, there is no difference in how informative fraud firms’ earnings are to analysts’ earnings forecasts. Furthermore, fraud firm’s earnings are not differentially associated with excess returns post-fraud. When earnings are decomposed into accruals and cash flows, fraud firms’ …