Business Commons^™

The Persistence Of Earnings And Corporate Governance In Ipo Firms, Mary F. Calegari, H. A. Maretno

Faculty Publications

In this study, we investigate the earnings persistence in IPO firms by examining the two components of earnings: accruals and cash flows. We also analyze the impact of corporate governance on earnings and the two earnings components. In our comparison of the top and bottom quartiles based on the firms' earnings at the IPO year, we find that although the top quartile firms have a significantly positive accrual component in the IPO year, they eventually have the same negative accrual component of earnings as the bottom quartile firms in the second year after the IPO. In contrast, we find that …

Use Tax Collections, Laura R. Ingraham, K. R. Nunez, L. M. Wright

Faculty Publications

The article reports on a study which investigated the level of compliance with U.S. state use tax laws and the techniques employed by the states in order to enforce use tax. Most states utilize either of two forms of tax reporting and collection. These are: the introduction of a separate use tax form/return; or the use of a separate line on the state income tax return. It was observed that utilizing a separate line item on the state income tax return might cause a rise in the number of taxpayers.

Tax Complexity And Small Business: A Comparison Of The Perceptions Of Tax Agents In The United States And Australia, Laura R. Ingraham, S. Karlinsky, M. Mckerchar

Faculty Publications

There is ongoing pressure in both the United States and Australia to simplify their respective tax systems, particularly in regard to small business taxpayers. In the case of both regimes, if substantial progress is to be made towards simplification, the areas of greatest need and the necessary reforms will require careful evaluation. The views of tax agents (practitioners) are highly relevant to the implementation of successful reform in that both regimes rely on self-assessment. It was considered that by undertaking a cross-jurisdictional comparison a greater understanding of complexity, from the perspective of tax agents, could be gained and that, the …

Incorporating Tax Reform Into Tax Courses, Annette M. Nellen

Faculty Publications

No abstract provided.

Tax Professionals' Perceptions Of Small Business Tax Law Complexity, Laura R. Ingraham, S. S. Karlinsky

Faculty Publications

The author’s report in this article on their study in questionnaire format that tested the perception of 89 small-business tax practitioners regarding the com- plexity of 37 tax provisions. They found overwhelming consistency on the five most complex and five least complex small-business tax provisions with partner- ships, estate and gift valuations, tax-deferred ex- changes, frequency of law changes, and retirement plans topping the hit parade. Progressive tax rates, estimated taxes, Social Security/self-employment taxes, corporate capital gain provisions, and cash ver- sus accrual method were uniformly and consistently perceived as the least complex. These results have tax policy implications. According …

Install Your Own Wireless Network, William G. Heninger, Craig J. Lindstrom, Bryce H. Peterson, Marshall B. Romney

Faculty Publications

Would you like to access the Internet, your printer and your other computers, including laptops, without stringing wires throughout your office or home? The solution is a wireless local area network (WLAN) and we'll tell you how easy it is to install one yourself at a nominal cost. WLANs replace conventional wires with devices called wireless access points that plug into any electrical wall socket. WLAN hardware contains miniature transmitters and antennae that send and receive radio signals to and from your computers and other peripherals.

The Taxation Of Telecommunications In California In The Information Age, J. E. Prieger, T. A. Sexton, Annette M. Nellen

Faculty Publications

No abstract provided.

An Analysis Of The Readability Of The Md&As Of Small, Medium, & Large Revenue Generating Cities, Shannon Lutz, Treba Marsh, Lucille Montondon

Faculty Publications

Studies assessing the annual reports of publicly held corporations have shown mixed results in regard to the readability levels of those reports. Recently, the Governmental Accounting Standards Board adopted GASB 33, 34, and 35 in which specific guidelines are outlined for the reporting of governmental entities. Are the Comprehensive Annual Financial Reports (annual reports) of the governmental entities understandable to the average user?

This study argues that the Managements Discussion and Analysis, the summary portion of the governmental annual report, is not understandable to the average reader. The sample was equally divided among small, medium, and large revenue-generating cities that …

The Aicpa's 10 Guiding Principles, Annette M. Nellen

Faculty Publications

Explains the ten guiding principles of good tax policy of a framework outlined in American Institute of Certified Public Accountants Tax Policy Concept Statement No. 1. Analysis of the guiding principles; How the principles can be used to analyze proposals; Application of the guiding principles.

Finding Auditors Liable For Fraud: What The Jury Heard In The Phar Mor Case, David M. Cottrell, Steven M. Glover

Faculty Publications

The Phar Mor case involved a massive collusive fraud by management. Although there were no claims the auditors participated in the fraud, plaintiffs' attorneys were able to convince the jury that the firm was liable for fraud on the grounds it made representations recklessly with regard to GAAS and GAAP.

Truth Or Consequences: A Study Of Critical Issues And Decision Making In Accounting, Annetta M. Gibson, Albert H. Frakes

Faculty Publications

This study applies a theoretical framework, the theory of reasoned action, to the examination of unethical decision making in job-related situations encountered by CPAs. A survey methodology was employed in which respondents were asked to use both self-reported and randomized response techniques for reporting unethical behavior. The results indicate that individuals are unwilling to accurately report either unethical behavior or intention, particularly in situations where there is no question as to the unacceptability of the action or the potential penalty as presented in the AICPA Code of Professional Conduct. Implications for the accounting profession and research are discussed.

Impact Of Fundamental Tax Reform On Domestic Manufacturing, Annette M. Nellen

Faculty Publications

No abstract provided.

Impact Of Tax Reform On International Competitiveness, Annette M. Nellen

Faculty Publications

No abstract provided.

Partners & Partnerships - Recent Developments, Annette M. Nellen, H. Burton

Faculty Publications

No abstract provided.

An Adaptive Learning Model Which Accommodates Asymmetric Error Costs And Choice-Based Samples, James V. Hansen, James B. Mcdonald, Rayman D. Meservy

Faculty Publications

This paper introduces an adaptive-learning model, EGB2, which optimizes over a parameter space to fit data to a family of models based on maximum-likelihood criteria. We also show how EGB2 can be modified to handle asymmetric costs of Type I and Type II errors, thereby minimizing misclassification costs. It has been shown that standard methods of computing maximum-likelihood estimators of qualitative-response models are generally inconsistent when applied to sample data with different proportions than found in the universe from which the sample is drawn. We investigate how a choice estimator, based on weighting each observation's contribution to the log-likelihood function, …

Economic Performance - It's Only Part Of The Picture, Annette M. Nellen, K. Marucheck

Faculty Publications

No abstract provided.

Accounting Tutor: Intelligent Computer-Aided Instruction, Rayman D. Meservy

Faculty Publications

This study investigates several development of intelligent issues central to tutoring systems: the ( 1) representing domain knowledge, (2) representing instructional knowledge, (3) modeling student learning, and (4) developing userfriendly interfaces. The focus of domain learning tasks includes accounting basics, often covered in the first few chapters of an accounting principles course.

S Corporation Current Developments, Annette M. Nellen, S. S. Karlinsky

Faculty Publications

No abstract provided.

Learn Audit Selection Rules From Data: A Genetic Algorithms Approach, David P. Greene, Rayman D. Meservy, Stephen F. Smith

Faculty Publications

The construction of expert systems typically require the availability of expertise that can be modeled. However, there are many important problems where no expertise exists, yet there is a wealth of data indicating results in different situations. Machine learning algorithms attempt to discover rules which capture the regularities that exists in such data.

Case-Based Reasoning And Risk Assessment In Audit Judgment, Eric L. Denna, James V. Hansen, Rayman D. Meservy, Larry E. Wood

Faculty Publications

The purpose of this paper is to describe the results of an effort to utilize Case Based Reasoning (CBR) to model a specific audit judgment task. To date most efforts to develop computational models of audit judgment have used strictly rule-based representation methods. Some researchers have recently adopted more robust structures to model the auditor domain knowledge. Although these recent efforts to extend the representation methods appear to be more accurate descriptions of auditor reasoning and memory, they still lack a comprehensive. theory to guide the development of the model. A commonly encountered phenomenon in audit judgment is for an …

Development And , Application Of Expert Systems In Audit Services, Eric L. Denna, James V. Hansen, Rayman D. Meservy

Faculty Publications

Professional auditing has become much more complex over the past decade. This development has engendered a need for leveraging auditor expertise. In an attempt to meet this need, public accounting firms have been actively involved in supporting the development and application of artificial intelligence methods in audit services, which forms the foundation of their business. Much of the development and application of artificial intelligence in auditing has taken the form of expert systems. This paper examines the current state of the art and provides a framework for analysis of present work, as well as a guide to future efforts.

Pal Rule Clarification Should Aim To Simplify, Annette M. Nellen

Faculty Publications

No abstract provided.

Rental Of Residences, Annette M. Nellen, K. Marucheck

Faculty Publications

No abstract provided.

Accounting Tutor Platform, Rayman D. Meservy

Faculty Publications

Many educational researchers consider computers to be the most important technological development for education since the invention of the printing press or writing itself. They believe that computers will one day transform education, leaving their mark on education as writing and books have done. Even though computer aided instruction (CAI} has been used for many years, results at the college level have been mixed, although generally moderately positive, sometimes reducing instructional time while increasing learning effectiveness. [Kulik, 1990]

Present Net Worth And Internal Rate Of Return: A Note On Equivalence In Use, K. A. Blatner, Steven H. Bullard

Faculty Publications

Present net worth and internal rate of return are frequently used for ranking investment alternatives. The relative merits and limitations of the two criteria are discussed at length in numerous journal articles and texts. For analysts wishing to present consistent project comparisons, the issue is not which criterion is superior, but when are they equivalent. In this article, conditions for equivalence in use are outlined under alternative assumptions. Although the conditions appear complex, they are not unduly restrictive.

Investigating Expertise In Auditing, Paul E. Johnson, Andrew D. Bailey Jr, Rayman D. Meservy

Faculty Publications

Research on human expertise in auditing contexts is an important area of study. Our objective in this paper is to present an approach to conducting research on human expertise. We begin with some issues of terminology and then propose a strategy for inquiry into the phenomena of expertise. Finally, we attempt to illustrate this strategy with three examples of recently completed work. The examples include: two from the auditing literature that involve the analysis of internal control and a medical diagnosis case which illustrates the "garden path" problem that is of concern in any decision making context, including auditing.

Decision Support Systems, Expert Systems, And Artificial Intelligence: Realities And Possibilities In Public Accounting, Andrew D. Bailey, Rayman D. Meservy, Joanne H. Turner

Faculty Publications

As the business environment becomes more complex and more competitive, accountants and other business managers must exploit the advantages of the computer to remain competitive. Even though managers have long used data which was collected, stored, summarized, and reported using computer technology, managers have not traditionally used computers to manage. Only recently have managers realized that the computer is a cost-effective tool which can directly aid and support business decisions (i.e., not only can computers generate data to be used in making decisions, they can also make comparisons, evaluate alternatives, weigh the costs and benefits, and perhaps even make certain …

Kass: A Knowledge-Based Auditor Support System, Ramayya Krishnan, Rayman D. Meservy, Vandana Gadh

Faculty Publications

This paper describes the design of a knowledge-based system to assist auditors in the evaluatation of internal accounting controls and focusses on the logic-based language AL that has been developed as a knowledge representation formalism. Interesting features of AL include a declarative approach to modeling accounting systems and the means to explicitly describe authority structures typically used to enforce internal controls.

Internal Control Evaluation: A Computational Model Of The Review Process, Rayman D. Meservy, Andrew D. Bailey Jr, Paul E. Johnson

Faculty Publications

This study investigated the strategies by which experienced auditors evaluate systems of internal accounting controls. The research method included: (1) observations, using concurrent protocols, of a small sample of practicing auditors performing the internal control evaluation task; (2) extensive interviews with one of the practicing auditors; (3) formalization of auditor processes as a computational model; and (4) validation of the model. The simulation model was Im· plemented as an expert system and tuned to one auditor. The model output consists of a trace of the model processing including: (1) rec• ommendatlons for specific controls to be compliance tested; and (2) …

A Mathematical Contraction And Automated Analysis Of Internal Controls, Andrew D. Bailey Jr, Gordon Leon Duke, James Gerlach, Chen-En Ko, Rayman D. Meservy, Andrew B. Whinton

Faculty Publications

This paper presents a precedent oriented computer assisted method of designing, analyzing and evaluating systems of internal controls. The ..!..nternal Control _!iodel, TICOM III, is fundamentally a design and analysis tool useful in the context of Automated Office Information Systems (AOIS's). Traditional analysis and evaluation tools, such as flowcharting, written narratives and questionnaires, are inefficient, if not insufficient, to support the design and control analysis of these new systems. The advantages of TICOM III over traditional methods such as narrative description, questionnaires and flowcharts are: (1) the evaluation can be more rigorous and exhaustive because of the speed, accuracy and …