Business Commons^™

Ethics-Related Cheap Talk In 10-Ks, Sedat Erdogan

Open Access Theses & Dissertations

In this study, I investigate the existence of direct ethics-related cheap talk in 10-Ks. Firms can utilize ethics-related language in 10-Ks to emphasize the importance of ethics or ethical behaviors. Direct ethics-related language in corporate financial disclosures may increase the stakeholdersâ?? expectation that firms act ethically. However, ethics-related language in 10-Ks shows cheap talk characteristics since it is qualitative, unaudited, not binding, and not costly to generate. As a result, firms may increase the extent of direct ethics-related language in 10-Ks to obfuscate corporate financial disclosures to confuse stakeholders. I focus on regulatory and financial pressure sources to understand ethics-related …

Ceo Political Ideology And Risk Factor Disclosure, Jiwoo Seo

Open Access Theses & Dissertations

I examine whether and how CEO political ideology affects risk factor disclosure. Since 2005, the Securities and Exchange Commission (SEC) has required U.S. firms to disclose risk factors in their 10-K filings. While prior studies document that this required disclosure increases the information content of financial reports, there is limited evidence on how Chief Executive Officer (CEO) personality traits influence risk factor disclosure. In this paper, I focus on CEOs' political ideology to proxy for their personality traits. Using CEOs' personal political contributions data to capture their political ideology, I find that firms with Republican-leaning CEOs provide less risk factor …

Proprietary Costs Of Financial Reporting, Country-Level Attributes, And Financial Statement Comparability, Jangho Gil

Open Access Theses & Dissertations

This study investigates the impact of country-level attributes on the relationship between proprietary costs of financial reporting and financial statement comparability. Given that managers use discretion in financial reporting, proprietary costs of financial reporting and country-level attributes could play a role in shaping managers' financial reporting behavior, which, in turn, could have an impact on financial statement comparability. For international study, I use four country-level latent factors, suggested by Isidro et al. (2019), that categorize most country-level features that affect financial reporting practices. I find that the negative relationship between proprietary costs and comparability is stronger in countries with relatively …

Managerial Entrenchment And Financial Reporting Comparability, Qifeng Wu

Open Access Theses & Dissertations

This study examines whether managerial entrenchment has an association with firms' financial statement comparability. I find that managerial entrenchment has a significant negative association with financial statement comparability, providing a new notion about the management influence on financial reporting quality. Moreover, by using the business segment as a proxy for business complexity, I find that the variation of accounting comparability with its peer firms mainly stems from managers' investment choice. This finding supports FASB's assertion that financial statement comparability is a reporting quality that should be enhanced among firms with similar economic events. Lastly, I test if managerial entrenchment mitigates …

Target Accounting Quality And Merger Consideration Design, Yuyun Zhou

Open Access Theses & Dissertations

This study examines how accounting quality of target firms relates to the design of merger consideration in acquisition agreements. Prior literature suggests that acquirers mitigate adverse selection problems by making the value of merger consideration sensitive to the acquirers' merger announcement returns. Using a large sample of acquisition agreements of public merging parties between 1996 and 2017, I investigate whether high-quality accounting information of target firms helps acquirers mitigate adverse selection problems and in turn affects the sensitivity of merger consideration to the acquirers' merger announcement returns. I hypothesize and find that accounting quality of target firms is negatively related …

Lenders' Influence On Borrower Firms' Internal Controls, Md Mahmudul Hasan

Open Access Theses & Dissertations

I identify a covenant in commercial loan contracts that requires borrowers to provide lenders internal control-related private information. Lenders use accounting information to monitor loan contracts and reliable accounting information is dependent on effective internal controls of the firm. I argue and provide evidence that lenders are more likely to demand internal control-related private information when borrowers have weak internal controls, when lenders use more accounting information in debt contracts, and when debt contracts have terms that expose lenders to greater risk. I further show that lenders' demand for internal control-related private information is positively associated with improvement in borrower …

Stock Repurchases As The Earnings Management: An Unintended Consequence Of The 2003 Dividend Tax Cut, Xiang Gao

Open Access Theses & Dissertations

I examine the impact of the 2003 dividend tax cut (Jobs and Growth Tax Relief Reconciliation Act, JGTRRA) on firms using stock repurchases for earnings per share (EPS) manipulation. Prior to 2003, dividends were taxed at the individual's income tax rate, which usually was ranged from 28 percent to 50 percent, compared to 20 percent tax rate on capital gains. In May 2003, with the passage of the JGTRRA, the dividend tax was cut significantly to 15 percent for the majority of individual income tax brackets, which is equal to the tax rate of capital gain. Consistent with Blouin et …

Mapping Decisions Of Reporting Asset Misappropriation Within An Accounting Department Using Behavioral, Cognitive, And Cultural Traits, Nora Alaniz Bouqayes

Open Access Theses & Dissertations

The problem of global fraud continues to be pandemic with the cost to organizations exceeding $3.9 trillion of lost revenues every year. Accounting research is slowly embracing the behavioral science research and has expanded limited literature addressing the traits of fraud perpetrators. This study begins to examine behavioral, cognitive, and cultural traits of reporters of fraud in accounting departments. This study narrows the area of interest to asset misappropriation as part of the Occupational Fraud and Abuse Classification System created by the Association of Fraud Examiners. An initial instrument to measure traits is developed and used to map decision paths …

Ceo Ownership And Firm Performance: Evidence From The 2003 Dividend Tax Cut, Hong Kim Duong

Open Access Theses & Dissertations

This study investigates whether and how CEO ownership impacts firm performance by using the large tax cut on individual dividend income enacted in 2003 (The 2003 Dividend Tax Cut) as an exogenous shock. My findings suggest that CEO ownership of dividend payers significantly increased after the shock in the form of higher annual restricted stock grants and more option exercises. I document that the change in CEO ownership has an asymmetric impact on firm performance and investment efficiency. Only dividend payers with CEOs who moved closer to optimal ownership experienced improvement in investment efficiency and performance. In contrast, dividend payers …

Essays In Accounting And Finance, Sayan Sarkar

Open Access Theses & Dissertations

In my first essay, I investigate changes in a number of firm characteristics surrounding the change in debt policy (i.e., becoming unlevered). I do so to investigate why firms may lower their debt levels, and add insights to the zero-leverage puzzle. My main findings are that tax based explanations and market timing explanations do not explain the observed behavior of firms that become totally unlevered. My findings are most consistent with the pecking order theory (Myers and Majluf, 1984) and with Jensen's (1986) theory of free cash flows. I also investigate whether financial constraint is somehow related to the decision …

Three Essays On Auditor Industry Specialization, Ankita Singhvi

Open Access Theses & Dissertations

This Dissertation consists of three separate but related essays examining auditor changes, auditor industry specialization and audit fee premiums.

The first essay investigates whether audit committee characteristics affect the types of auditor changes from an industry specialist auditor to a non-industry specialist auditor or the reverse. I examine whether selection of an external auditor is affected by audit committee characteristics such as: 1) number of meetings, 2) number of members on the audit committee, 3) proportion of auditing experts and, 4) proportion of financial experts. The findings show that a greater proportion of auditing experts on the audit committee positively …

Political Rights And Reported Accounting Numbers: An International Study, Chu Chen

Open Access Theses & Dissertations

I examine how managers' behaviors, including earnings management and conservatism, are influenced by the political environments in 38 countries. The results indicate that greater political rights are associated with better earnings quality and more conservative reporting. I find that political institutions substitute for legal institutions in terms of managers' discretional behaviors. Specifically, a marginal increase in political rights will produce a smaller reduction in earnings management behaviors in a country with better investor protection. Similarly, a marginal increase in political rights will encourage a less improvement on accounting conservatism in a country with better investor protection.

Subordinate Accountants' Perceptions Of Their Superiors' Leadership And Performance: The Study Of Moderating Variables In The Accounting Profession, Raul Tapia, Jr.

Open Access Theses & Dissertations

The purpose of this Dissertation was to examine whether or not the self-monitoring component of adaptive self-regulation and perceptions of organizational politics moderate an accountant's interpersonal traits (interpersonal power and interpersonal trust) of how they perceived their superiors' performance and leadership ability. Accounting is a very diverse field in which individuals must work closely with their superiors to accomplish given tasks. With regulations and high principles that must be followed in daily work, accountants must act in large part to the expectations of others to complete their tasks correctly. Accountants who trust their superiors and have more confidence in his/her …

Essays In Corporate Finance, Shofiqur Rahman

Open Access Theses & Dissertations

This doctoral Dissertation examines the impact of firms' geographic location and labor market friction, both based on the states in which firms are headquartered, on corporate policies. The first essay examines the impact of the geographical location of the firm on the use of operating leases. The main idea of this essay is that, because obtaining information and monitoring is costly for potential lessors, especially when a lessee is relatively far away from financial centers, rural firms are less likely to use operating leases in comparison to their urban counterparts. Consistent with this hypothesis, I show that rural firms tend …

Too Much Of A Good Thing? The Effect Of Internal Control Monitoring System Alerts On User Perceptions Of Task-Technology Fit, Julia Kokina

Open Access Theses & Dissertations

Anecdotal and field study evidence points to both positive and negative effects of alerts produced by technology-enabled internal control monitoring systems (ICMS) (Alles et al. 2006, 2008; Debreceny et al. 2003, 2005; Perols and Murthy 2012). An important unanswered question is how those alerts impact users who process them and decide whether any corrective action should be taken. In this study I surveyed financial executives and accounting professionals to examine the impact of alerts on user perceptions of task-technology fit (TTF) (Goodhue and Thompson 1995). Alerts generated by ICMS can bring to the attention of company leadership indications of errors, …

An Ever Closer Union: An Investigation Of Accounting Measurement And Timing In The European Union, Elizabeth Marie Devos

Open Access Theses & Dissertations

This paper explores whether the implementation of a unified set of accounting standards, International Financial Reporting Standards (IFRS) is able to overcome prior reporting behaviors by using multiple measures of accounting conservatism, both conditional and unconditional, to proxy for changes in accounting outcomes. Conservatism makes a good proxy for changes in accounting outcomes because it is used as a mechanism to protect key stakeholders and the level of conservatism differs in an international context (Gray, 1988). Countries from different legal systems have different institutional structures and different reporting incentives. Therefore, the sample is bifurcated and regressions are also run based …

Tax Compliance Determinants: A Proposed Model For Cross-Country Analysis, Denise Bowen O'Shaughnessy

Open Access Theses & Dissertations

The issue of tax compliance has been identified world-wide as a significant problem. The importance of understanding tax compliance behavior is essential to government policy makers, tax enforcement agents, citizens, and businesses (Hite & McGill, 1992; Joulfaian and Rider, 1998; Internal Revenue Service, 2008; Chau and Leung, 2009). Insight into the decision making process of taxpayers is crucial to researchers in assisting governments as they struggle to meet new challenges of a growing global economy while trying to balance increasing deficits and infrastructure demands. This Dissertation investigates the determinants of tax compliance behavior at an international level in an attempt …

The Impact Of The Proposed Format Of Financial Statements By Iasb And Fasb On Investors' Decisions, Francisco Villanueva

Open Access Theses & Dissertations

This dissertation investigates the impact of the proposed format of financial statements from the International Accounting Standard Board (IASB) and the Financial Accounting Standard Board (FASB) on investors' decisions. In particular, the research question of this study is whether the proposed format reduces the bias from the disposition effect. In 2008, the FASB in conjunction with the IASB published an exposure draft to modify the presentation of financial statements. The proposed format does not change the content of the financial information; it only modifies how information is presented in the financial statements. In other words, recognition of assets, liabilities, revenues, …

The Impact Of Organizational Culture On Decisions To Use Comprehensive Performance Measurement Systems, Gaurav Gupta

Open Access Theses & Dissertations

Using the Contingency Approach to Management Accounting (Otley, 1980) and the Globe Study's (House et al., 2004) organizational culture model, the purpose of this dissertation is to examine the impact of organizational culture on the extent of the use of Comprehensive Performance Measurement Systems (CPMS) in Indian manufacturing organizations. The Balanced Scorecard (BSC) is used as a proxy to CPMS in this research. Using a survey methodology, data were collected from 18-28 top management and other employees in each of the 48 manufacturing organizations in India for a total of 1,126 respondents. I conducted regressions to analyze the data. I …

The Impact Of National Culture On Cost Of Equity Capital In Cross-Listed Firms, Kathy F. Otero

Open Access Theses & Dissertations

This study examines the GLOBE cultural dimensions of institutional collectivism, in-group collectivism, uncertainty avoidance, and power distance to evaluate the impact of national culture on cost of equity capital for firms cross-listing on two stock exchanges. In addition to evaluating the direct effect of culture on cost of equity capital, the study examines the moderating effect of national culture on impact of the political/regulatory environment and disclosure on cost of equity capital. Limited support was found for both the direct effect and the moderating effect of national culture on cost of equity capital.

Ifrs Adoption And Enforcement As Antecedents Of Economic Growth, Syed Kashif Raza Zaidi

Open Access Theses & Dissertations

Globalization of capital markets has increased the need for harmonized accounting standards around the world. International regulators promote the adoption of International Financial Reporting Standards (IFRS) to increase harmonization. The purpose of this paper is to assess the impact of IFRS adoption on the economic growth of adopting countries taking into consideration the level of enforcement within a country. I hypothesize that the adoption of IFRS increases the economic growth of the adopting countries. This effect is to be moderated by the level of enforcement. That is, I hypothesize a positive interaction between enforcement level and IFRS adoption on the …

Standardizing The Presentation Of Financial Data: Does Xbrl's Taxonomy Affect The Investment Performance Of Nonprofessional Investors?, Cassy D. Henderson

Open Access Theses & Dissertations

Extensible Business Reporting Language (XBRL) is mandated in the United States with the intention of making financial information more useful and easier to analyze. XBRL technology defines financial information, and when implemented as intended, has the ability to standardize the items presented in the financial statements. Standardizing financial information is likely to benefit investors by simplifying the acquisition and integration of the information. Nonprofessional investors have limited knowledge and experience analyzing financial statements and are likely to benefit from a standardized presentation format. Using 167 graduate business students as proxies for nonprofessional investors, the current study examines how standardizing the …

Three Essays On The Quantification, Validation, And Application Of Gray's Accounting Values, Ramon P. Rodriguez

Open Access Theses & Dissertations

This doctoral Dissertation creates, validates and uses a quantification of country-level accounting values based on Gray's (1988) framework. This Dissertation consists of three essays. The first essay reports the theoretical foundation and method for the quantification of the accounting values. The quantification results in reported scores for each of Gray's (1988) four accounting values - Professionalism versus Statutory Control, Uniformity versus Flexibility, Conservatism versus Optimism, and Secrecy versus Transparency. Accounting values scores are reported for 58 countries. The second essay reports the method and results of validation testing preformed on the accounting values scores. The primary validation method, Multi-Trait Multi-Method …