Business Commons^™

Early Evidence Of The Volatility Of Comprehensive Income And Its Components, Timothy L. Mccoy, James H. Thompson, Margaret A. Hoskins

All Faculty Scholarship for the College of Business

The Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) No. 130 Reporting Comprehensive Income, in June 1997, effective for fiscal periods beginning after December 15, 1997. Early trends in reporting comprehensive income and its components for the Fortune 500 reveal an overwhelming preference for disclosure in the statement of changes in stockholders' equity, despite the FASB's recommendation of utilizing a combined statement of income/comprehensive income or a separate statement of comprehensive income. This disclosure tends to downplay the importance of other comprehensive income items and focus readers' attention on the traditional net income figure rather than comprehensive …

The Impact Of Cultural Environment On Entry-Level Auditors’ Abilities To Perform Analytical Procedures, James F. Sander, Susan B. Hughes, Scott D. Higgs, Charles P. Cullinan

Scholarship and Professional Work - Business

We focus on the impact of three of Hofstede’s cultural dimensions, power distance, uncertainty avoidance, and individualism, on the results of analytical procedures conducted by entry-level auditors in Mexico and the U.S. Analytical procedures are ideal for this research as they require auditors to use professional judgment and appropriate levels of professional skepticism, abilities related to all three cultural characteristics. We find no other study investigating the impact of culture on the application of auditing procedures similar across the studied cultures.

We find cultural characteristics do not affect the participants’ abilities to predict income statement balances, but they may influence …

Critical Accounting Policy And Estimate Disclosures: Company Response To The Evolving Sec Guidance, Susan B. Hughes, James F. Sander, Jillian K. Snyder

Scholarship and Professional Work - Business

In late 2001, soon after numerous financial reporting failures including the much publicized demise of Enron, the SEC began a series of initiatives to improve critical accounting policy (CAP) and critical accounting estimate disclosures included within the MD&A section of Form 10-K. The first announcement, in the form of cautionary guidance, was issued in December 2001. This was followed by a Proposed Rule in 2002, and additional disclosure guidance near the end of 2003. Combined, the guidance required companies to provide information that would help investors understand the impact of estimates, accounting policies and external factors on financial results. Through …

2008-2009 Financial Summary, Morehead State University. Budget & Financial Planning Office.

Morehead State University Financial Summaries Archive

2008-2009 Financial Summary of Morehead State University.

Teaching Freshman Business Students Ethics: A Case Study, John Koeplin

Accounting

Making ethical decisions is important for both personal and business situations. This case study suggests a different approach to educating business students about ethics and personal character. By exposing beginning business students to personal and business dilemmas, requiring reflection papers on their experiences, debating business and political issues, and through other activities such as discussion various business ethical dilemmas, students will become more sensitive to ethical issues and ideally see character development as something directly related to their studies. Additionally, by having students take this course in their first year of undergraduate studies, this will affect the context and experience …

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

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 …

2009-2010 Morehead State University Audit Report, Morehead State University. Accounting And Financial Services Office.

Morehead State University Audit Reports

2009-2010 Audit Report for Morehead State University.

Gasb Statement No. 31: Why No Controversy?, George L. Hunt

Faculty Publications

Fair value reporting of investments in the financial statements of commercial enterprises is required under FASB Statement No. 115. The standard created much controversy when issued due to provisions that changes in fair values of certain investments were recognized in the operating statement. A major concern to many organizations was the volatility these recognized, but unrealized, changes in fair value would create in reported earnings. When the GASB issued Statement No. 31 requiring fair value reporting of investments there was little controversy concerning volatility to reported earnings of governmental entities, even though the standard required much broader application of fair …

Characteristics Of Accounting Faculty In The U.S., Ravindra R. Kamath, Heidi H. Meier, Edward G. Thomas

Business Faculty Publications

In this article, the academic and personal characteristics of Accounting faculty members at Colleges and Universities in the United States are analyzed to determine the demographics of the Accounting Professorate. Data on 12 variables were collected for the 2004-2005 academic year as a means of constructing a professional profile of the typical accounting professor teaching at today’s universities. Given that there are anticipated shortages of accounting faculty, this information should be of interest to students who are considering accounting as a major, those contemplating entering the profession, and those faculty members who are engaged in educating the next generation of …

Using Peer Grading And Proofreading To Ratchet Student Expectations In Preparing Accounting Cases, Laura R. Ingraham, B. A. Chaney

Faculty Publications

Accounting educators struggle with ways to incorporate the development of critical thinking and communication skills into the curriculum. Case analysis is one tool for developing these skills. We examine whether students’ case analysis scores improve as a result of participation in peer grading and peer review. We find that students improve their ability to perform case analyses after both evaluating and being evaluated by student peers. Students initially experience an Expectation Ratcheting learning effect after evaluating the case of a peer. Subsequently, students experience an Enhanced Feedback learning effect from the comments and suggestions made by the peers who evaluated …

The 50th Anniversary Of Stopgap Legislation, Annette M. Nellen

Faculty Publications

No abstract provided.

An Analysis Of Social Factors Influencing The Adoption Of International Financial Reporting Standards, Jeffrey J. Archambault, Marie E. Archambault

Accounting Faculty Research

his paper examines the decision of 120 countries to permit or not to permit the use of International Financial Reporting Standards (IFRS) for listed companies incorporated within their borders. An empirical model is developed considering variables related to culture, political systems and economic systems of the countries. Least squares regression was used to examine which variables significantly influence the decision to allow the use of IFRS. The results from this regression indicate that literacy rates and net import activity positively influence the decision to allow IFRS. Less economically developed countries were also shown to be more likely to allow IFRS. …

Chinese Gaap And Ifrs: An Analysis Of The Convergence Process, Songlan Peng, Joyce Van Der Van Der Laan Smith

Accounting Faculty Publications

In this study, we examine the process of convergence through a longitudinal analysis (1992–2006) of the convergence of Chinese GAAP with IFRS from the perspective of process theory. We find that significant steps toward convergence occurred through the issuance of four successive Chinese GAAPs: 1992, 1998, 2001, and 2006. Convergence occurred both through the direct import of standards from IFRS and progressive changes to Chinese GAAP. Direct import was observed for items either reflective of traditional Chinese accounting practice or ones that addressed situations not considered or not relevant under the pre- vious accounting model. Progressive changes to Chinese GAAP …

Calls For Accountability: Will It Help The Overall Incentives Process?, Annette M. Nellen

Faculty Publications

No abstract provided.

Asking Tougher Questions In Tough Times, Irving Low, Claudia Eio, See Liang Foo, Yang Hoong Pang, Kwong Sin Leong, John Joseph Williams

Research Collection School Of Accountancy

The recent wave of corporate governance disasters globally raises many eyebrows and burning questions whether audit committees (ACs) are doing the right things to effectively discharge their roles and responsibilities. To further test the integrity and reputation of the Singapore market as a listing gateway for foreign companies in turbulent times like these, the headlines are also reporting a spate of suspected and actual corporate fraud and scandals involving China-based, Singapore listed companies (commonly referred to as “S-chips”). Many angry investors and the public question whether ACs and independent directors are doing their jobs.

The Role Of Accounting Information In The Sentiment-Price Relation, Kun-Chih Chen

Research Collection School Of Accountancy

This study reconciles inconsistent evidence on the sentiment-price relation in prior studies by explicitly considering the effects of sentiment on both investor judgments and risk preferences. Using the uncertainty in accounting information, I am able to disentangle these two effects of sentiment and investigate the causes of the variations in the sentiment-price relation. The results show that, under low uncertainty, the effect of sentiment on risk preferences dominates in the sentiment-price relation, such that a negative effect of sentiment on price is observed. In contrast, under high uncertainty, the effect is less negative and, in fact, becomes positive. This suggests …

Interlinkages Between Equity, Currency, Precious Metals And Oil Markets: An Emphasis On Emerging Markets, Lucia Morales

Other resources

This thesis examines the interlinkages between equity, currency, precious metals and oil markets. The study follows an international approach with a special focus on emerging markets in Europe, Asia and Latin America, but without forgetting the importance of the G-7 that represents the most developed markets. The present research also focuses on the existence of interlinkages between these markets and the currency, oil, and precious metals markets. The author of this thesis considered it appropriate to implement such an analysis due to the fact that the relationships between financial markets, currency markets and the above-mentioned commodities markets have not been …

An Empirical Examination Of Whistleblowing Policies And Mechanisms At Universities, Michael D. Akers, Tim V. Eaton

Accounting Faculty Research and Publications

This study empirically examines the implementation of whistleblowing policies and mechanisms at universities.

Predicting Patients’ Use Of Provider-Delivered E-Health: The Role Of Facilitating Conditions, E. Vance Wilson, Nancy K. Lankton

Accounting Faculty Research

This chapter presents a new rational-objective (R-O) model of e-health use that accounts for effects of facilitating conditions as well as patients’ behavioral intention. An online questionnaire measured patients’ behavioral intention to use a new e-health application as well as proxy measures of facilitating conditions that assess prior use of and structural need for health services. A second questionnaire administered three months later collected patients’ self-reported use of e-health during the intervening period. The new model increased predictions of patients’ e-health use (measured in R2) by more than 300% over predictions based upon behavioral intention alone, and all measured factors …

A Research Note On The Issue Of Non-Articulation And The Method Used To Calculate Net Operating Cash Flow, Terry J. Ward, Jon Woodruff, Benjamin P. Foster

Faculty Scholarship

Using a proxy for nonarticulation, prior researchers found evidence that many companies using the indirect method of reporting net cash flow from operations have a significant level of nonarticulation. The purpose of this study is to determine if companies using the direct method of reporting net cash flow from operations experience significantly lower levels of nonarticulation than companies that use the indirect method of reporting net cash flow from operations. Results show that companies using the direct method have significantly less nonarticulation than companies using the indirect method. This finding suggests that the Financial Accounting Standards Board (FASB) should consider …

2009-2010 Operating Budget, Morehead State University. Budget & Financial Planning Office.

Morehead State University Operating Budgets Archive

2009-2010 Operating Budget of Morehead State University.

Fair Value Measurement: What’S New? Teaching Note, Danny A. Pannese, Alan Delfavero

WCBT Faculty Publications

As the international economic landscape has become increasingly integrated, the argument for the development of uniform global accounting standards now exists. In an effort to achieve this objective, the Financial Accounting Standards Board, as part of the ongoing Convergence Project with the International Accounting Standards Board, released groundbreaking accounting standards, FAS157 & FAS159, in 2006 and 2007, respectively. Modeled after an international accounting standard, these standards pertain to the use of fair value accounting (FVA), and are the first of their kind as they provide a definition of FVA and an option to expand its use to certain financial instruments. …

A Review Of Academic Literature On Internal Control Reporting Under Sox, Arnold Schneider, Audrey A. Gramling, Dana R. Hermanson, Zhongxia Shelly Ye

Faculty and Research Publications

Section 404 of the Sarbanes-Oxley Act of 2002 (SOX) mandates reporting on the effectiveness of internal control over financial reporting (ICFR) by public company management and auditors. Such reporting began for fiscal years ended Nov 15, 2004 for accelerated filers and is scheduled to be fully implemented for non-accelerated filers in mid-2010. Section 404(a) of SOX requires public company management to include an assessment of the effectiveness of the company's ICFR in its annual internal control report, and Section 404(b) requires attestation by the company's auditor. The authors review the literature on internal control reporting under both Sections 302 and …

How Consulting Services Could Kill Private-Sector Auditing, Dana R. Hermanson

Faculty and Research Publications

The article presents a discussion of recommendations for improving sustainability of a public company auditing profession in the U.S., adapted from a submission by Dana R. Hermanson to the Advisory Committee on the Auditing Profession of the Treasury Department.

What Happens In Vegas Doesn't Always Stay In Vegas: Nevada Corporations Enjoy A Disproportionate Share Of Sec Trading Suspensions, Anthony J. Cataldo Ii, Peter F. Oehlers, Robert C. Scanlon

Accounting Faculty Publications

No abstract provided.

An Examination Of The Use Of The Board Balanced Scorecard By Large Public Corporations, Qianhua Ling, Don Giacomino, Michael Browne, Michael D. Akers

Accounting Faculty Research and Publications

While the Balanced Scorecard (BSC) developed by Norton and Kaplan has gained global prominence as a management tool and there is qualitative accounting literature that discusses the benefits of the Board BSC, there is limited empirical evidence that examines the use of the Board BSC. We surveyed Chairs of large public companies to determine the extent to which they use the Board BSC and the reasons why. Our findings suggest that the Board BSC is currently not a widely used technique by Boards of Directors. We also found that the Sarbanes-Oxley Act of 2002 wasn't an influencing factor for those …

Trading In Co2 Credits: Tax Issues To Consider, Maureen Mascha, J. William Harden, James Trebby

Accounting Faculty Research and Publications

The issue of limiting carbon emissions has recently commanded international attention. Starting with the 1997 Kyoto Protocol, world markets have begun to coalesce around the notion that carbon dioxide (CO₂) emissions should be controlled or capped. There are three generally accepted methods for limiting the emission of CO₂: 1) a carbon tax that charges producers a fee for emissions that exceed a prespecified amount; 2) an auction, in which organizations bid on credits that are then used to offset the amount of actual CO₂ emitted; and 3) a “cap and trade” system.

International Perception Of Corruption, Bina Menon, Michael D. Akers

Accounting Faculty Research and Publications

The discussion of corruption and bribery in most auditing textbooks focuses only on the Foreign Corrupt Practices Act which is an amendment to the Securities Exchange Act of 1934. As the US moves toward the implementation of International Financial Reporting Standards (IFRS) and international auditing standards, an understanding of international legislation pertaining to corruption and the perception of corruption in specific countries are important. This paper provides an overview of the Foreign Corrupt Practices Act (FCPA) and the Organization for Economic Co-operation and Development (OECD) Anti-bribery Convention. While prior literature has discussed the impact of both the FCPA and OECD …

Exploring Accounting Fraud In The Subsidiary Environment, Carmelita J. Troy, Madeline Ann Domino, Steven P. Landry

Faculty Publications

This research explores accounting fraud in the subsidiary environment. Utilizing institutional theory, we propose that the subsidiary environment provides an opportune setting and vehicle for individuals to commit accounting fraud. While a growing body of literature exists on accounting fraud, minimal work has focused on the role of the subsidiary in accounting fraud, as reported by the Securities and Exchange Commission (SEC). We sample companies for which the SEC has documented accounting fraud in their enforcement releases. We then analyze the related SEC documents to determine to what extent, if any, a subsidiary is involved in the accounting fraud. Our …