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Lack Of Timeliness, Noise And Transitory Components In Earnings As Explanations For The Apparent Decline In The Value Relevance Of Earnings, L. Dwight Sneathen
Lack Of Timeliness, Noise And Transitory Components In Earnings As Explanations For The Apparent Decline In The Value Relevance Of Earnings, L. Dwight Sneathen
School of Accountancy Faculty Research and Publications
Prior studies identify three factors that contribute to the low contemporaneous association between returns (prices) and earnings: lack of timeliness of earnings capturing value relevant information, noise in earnings, and transitory elements in earnings. This study seeks to identify whether these factors contribute to the observed inter-temporal decline in the contemporaneous association between returns (prices) and earnings documented in recent literature. Prior studies do not explicitly examine the affect of these factors on the inter-temporal decline, and the extant evidence is mixed. Empirical evidence presented here indicates that lack of timeliness of earnings and value-irrelevant noise in earnings have increased …
The Importance Of The Control Environment: Expense Account Fraud At Blue Grass Airport, Thomas G. Noland, Paul Metrejean
The Importance Of The Control Environment: Expense Account Fraud At Blue Grass Airport, Thomas G. Noland, Paul Metrejean
School of Accountancy Faculty Research and Publications
COSOs Internal Control Framework discusses the components of internal control and how the control environment is the most important component. This paper analyzes how a non-existent control environment led to a massive expense account fraud at a regional airport. This fraud eventually led to the resignation and prosecution of the airports top four executives. The paper discusses the findings of the State Auditors investigation and outlines the red flags that should have been obvious to the external auditors. The paper concludes by discussing the changes made to the airports internal controls in the aftermath of the fraud.