Business Commons^™

A Key Ingredient In Fraud Detection: The Net Worth Method, Chad O. Albrecht, Dr. W. Steve Albrecht

Journal of Undergraduate Research

When someone is suspected of committing fraud within a business, one of the most effective procedures to determine if the person is actually committing fraud is to determine their net worth by performing a calculation known as the net worth method.

The Causes Of The Increase Of Tax Evasions In Moldova, Natalia Virlan, Dr. Gary Mckinnon

Journal of Undergraduate Research

The constant honest tax payment by every citizen and firm of the country is a serious problem, which arose in the Republic of Moldova (an ex-member of the Soviet Union) after the collapse of the Soviet Union in 1991. Since then until the present time the tax evasion by physical and juridical persons has not stopped or decreased, and the government does not know when it will.

Cost-Effective Service Recovery: Knowing Which Customers To Keep, Aaron R. Brough, Dr. Kristie Seawright

Journal of Undergraduate Research

Service failures are inevitable. When firms fail to deliver a service as promised, customers will generally be dissatisfied. Such customers will not likely do business with the company in the future. Some companies may shrug their shoulders and look for new customers. However, research shows that in many cases it is considerably more profitable for a company to keep customers who have experienced failures than to try to find new customers. Service recovery is anything companies do to recover the satisfaction and loyalty of customers who have experienced a service failure.

Mining For Gold Inside Your Organization, J. Scott Dutcher, Dr. William H. Baker

Journal of Undergraduate Research

Making the most of the information that is available to you is what data mining is all about. Surprisingly, large numbers of organizations have yet to incorporate data mining techniques that drive many of their operations and decisions. Instead, upper management is trying to solve many puzzles without looking at the pieces. For those organizations that currently use data mining strategies, better mining methods can always be found. These missed mining opportunities have resulted in poorer service, lost revenue, security threats, and more. Data mining will be essential for the survival of businesses and organizations in the 21^st Century. …

Ukrainian Financial Reporting: The Need For Change, Eldar Maksymov, Dr. Earl K. Stice

Journal of Undergraduate Research

Ukraine is an Eastern European country with a history of volatile economic climate. The future success and stability of the Ukrainian economy will largely depend on the government’s actions to make the economic climate more attractive to foreign investors through reforms. One area where change is needed the most is the area of financial reporting. The current accounting standards do not ensure that investors receive adequate financial information about the reporting company.

A Study Of The Effects Of Reduced Transaction Costs And Information Asymmetry In E-Commerce, Kendall C. Hulet, Dr. Scott Sampson

Journal of Undergraduate Research

Information asymmetry is usually defined as a market failure that increases transaction costs. Buyers and sellers in a typical market transaction have varying degrees of information on which to base their decisions, whether it be about the quality of the good or service, or about the optimal price of the good or service. If perfect market efficiency is the ideal, asymmetry of information usually results in too high a price being paid for a particular good or service.

The Relationship Between The Family Leisure Involvement Of Families With A History Of Divorce And Families Without A History Of Divorce, Jennifer M. Harris, Ramon Zabriskie, Dr. Brian Hill

Journal of Undergraduate Research

When President Hinckley introduced The Family: A Proclamation to the World, he explained why such emphasis on the importance of the family was needed: “The family is under attack. All across the world families are falling apart. The place to begin to improve society is in the home…We are trying to make the world better by making the family stronger” (Dew, 1997, p. 209). One researcher posed the question: “What is the state of the American family today and how well do these families function?” (Kugath, 1997, p. 1)). In the United States in 1998, 1,135,000 divorces were granted (World …

Family Cohesion And Adaptability In Relation To Family Life Cycle Stage, Alicia P. Dansie, Dr. Brian Hill

Journal of Undergraduate Research

Cohesion and adaptability varies amongst individual families as a result of many known factors including family leisure patterns, work ethic and commitments, and marital and family satisfaction (Orthner & Mancini, 1990) (Steinburg & Silverberg, 1987). Little is known however about the effect family life cycle stage may have on familial cohesion and adaptability. This research was completed to determine if families experience various levels of cohesion and adaptability as a direct result of family life cycle stage. Through this research information is discovered to add to the knowledge base involving family recreation and to answer the question: at what stage …

Lds Homemakers, Leisure, And Life-Satisfaction, Eliza E. Hertzler, Dr. Brian Hill

Journal of Undergraduate Research

Mother, a word that brings a surge of affection to every human heart and mind. Certainly everyone is grateful for their mother and all she did to raise them. This study was designed to determine if mothers are truly satisfied with what they are doing-being homemakers-and what factors affect that satisfaction. Does each mother consider staying home and raising her children an accomplishment, or a burden? Does free time play a role in these findings? Studies have shown that homemakers are more likely to suffer from depression than their husbands or other mothers in the workforce. 1 The researcher’s goal …

Peer Inclusion In Family Recreation, Lora Jean Bennion, Dr. Brian Hill

Journal of Undergraduate Research

When the word ‘family’ is mentioned, it brings to mind a different picture to each and every person. What is a family? How do families stay together? How can strong bonds be built between parents and children? The family unit has been a subject of research for many years, but little research has been done in the field of Family Recreation and the effects it has on the family. The study of Family Recreation is important because it is often through this medium that family cohesiveness is developed and maintained.

Foreign Direct Investment In Southeast Asia, Ryan S. Gifford, Dr. Stanley Fawcett

Journal of Undergraduate Research

One of the driving forces behind the tremendous growth that Southeast Asia has experienced throughout the past decade is foreign direct investment (FDI) from multinational corporations in industrialized nations. Southeast Asian countries have been receiving several billion dollars in FDI annually since the mid 1980s. FDI is thus largely responsible for the economic transformation that has occurred in Southeast Asia and has made it among the fastest growing regions in the world.

Using Measures Of Risk Perception To Predict Information Security Behavior: Insights From Electroencephalography (Eeg), Anthony Vance, Bonnie Anderson, C. Brock Kirwan, David Eargle

Faculty Publications

Users' perceptions of risks have important implications for information security, as the actions of individual users can compromise entire systems. Therefore, there is a critical need to understand how users perceive and respond to information security risks. Previous research on perceptions of information security risk has chiefly relied on self-reported measures. Although these studies are valuable, risk perceptions are often associated with feelings—such as fear or doubt—that are difficult to measure accurately using survey instruments. Additionally, it is unclear how these self-reported measures map to actual security behavior. This paper contributes by demonstrating that risk-taking behavior is effectively predicted using …

Increasing And Generalizing Self-Efficacy: The Effects Of Adventure Recreation On The Academic Efficacy Of Early Adolescents, Mark A. Widmer, Mat D. Duerden, Stacy T. Taniguchi

Faculty Publications

This quasi-experimental study examined the impact of an adventure recreation program on adolescent participants’ outdoor recreation and academic self-efficacy. The study also explored the transferability of efficacy beliefs across non-related domains. The sample included 262 adolescents, 194 who served as participants in the program and 68 who served as comparisons. The average age for each group was 13.6 years. The intervention, a two-week, theory-based program, involved a variety of outdoor recreation activities. Pre-/post-instruments measured perceived levels of outdoor efficacy and academic efficacy, attitudes, and motivations. Results indicated participants experienced significantly more growth than comparisons on both outdoor and academic measures …

Stock Options As Lotteries, Brian H. Boyer, Keith Vorkink

Faculty Publications

We investigate the relationship between ex ante total skewness and holding returns on individual equity options. Recent theoretical developments predict a negative relationship between total skewness and average returns, in contrast to the traditional view that only coskewness is priced. We find, consistent with recent theory, that total skewness exhibits a strong negative relationship with average option returns. Differences in average returns for option portfolios sorted on ex ante skewness range from 10% to 50% per week, even after controlling for risk. Our findings suggest that these large premiums compensate intermediaries for bearing unhedgeable risk when accommodating investor demand for …

Optimistic Reporting And Pessimistic Investing: Do Pro Forma Earnings Disclosures Attract Short Sellers?*, Theodore E. Christensen, Michael S. Drake, Jacob Thornock

Faculty Publications

When companies announce their quarterly results, along with their standard GAAP earnings number, managers sometimes choose to disclose an adjusted (pro forma) earnings figure that excludes one or more income statement line items from net income. While managers frequently argue that they exclude transitory items from GAAP income in an effort to better reflect core operating performance, regulators and critics of pro forma reporting contend that these exclusions can overstate operating results. In particular, the Securities and Exchange Commission (SEC) issued a warning that under certain circumstances, pro forma reporting “can mislead investors if it obscures GAAP results” (SEC 2001). …

The Reputational Costs Of Tax Avoidance*, John Gallemore, Edward L. Maydew, Jacob Thornock

Faculty Publications

This study investigates whether firms and their top executives bear reputational costs from engaging in aggressive tax avoidance activities. At least two decades of empirical tax research has shown that firms engage in a wide range of strategies for tax avoidance purposes. 1 Recent studies suggest that for many firms, tax avoidance appears to be highly effective at reducing the firms’ tax payments and increasing their after-tax earnings. For example, Dyreng, Hanlon, and Maydew (2008) find that more than a quarter of publicly traded U.S. firms are able to reduce their taxes to less than 20 percent of their pre-tax …

The Media And Mispricing: The Role Of The Business Press In The Pricing Of Accounting Information, Michael S. Drake, Nicholas M. Guest, Brady J. Twedt

Faculty Publications

This study investigates the role of the business press in the pricing of accounting information. Using a comprehensive dataset of more than 111,000 earnings-related business press articles published from 2000–2010, we find that press coverage of the annual earnings announcement mitigates cash flow mispricing, but has a negligible effect on accrual mispricing. We provide evidence that this impact is driven primarily by the press disseminating the information more broadly, rather than by the creation of new content that helps investors understand the implications of accounting information. Our results suggest that the business press plays an important role in facilitating the …

Stories From The Workplace: Using Mini-Modules Online To Increase Student Motivation And Learning, Jon Balzotti, Janet Roberts

Faculty Publications

In this article, we describe the incorporation of video modules into three professional communication classrooms. These modules were designed to give both teachers and students access to professional practitioners and their views about the changing role of communication in the 21st century workplace. We incorporated these modules into professional communication courses (junior/senior level technical communication course) and courses in the disciplines (freshman and senior engineering design courses). The article discusses how content designed to simulate the language conventions of friendly conversation can impact student motivation and foster greater participation in the professional communication classroom.

Trainees’ Perceived Knowledge Gain Unrelated To The Training Domain: The Joint Action Of Impression Management And Motives, Dan S. Chiaburu, Jason L. Huang, Holly M. Hutchins, Richard G. Gardner

Faculty Publications

Trainees’ knowledge gains represent an important outcome in human resource development. In this research, we tested a model examining the joint influence of social desirability (impression management, self-deception) and motives (need for power, need for approval) on trainees’ self-reported knowledge gain. We conducted a study with respondents who reported information related to individual differences and took a training program and reported their knowledge gain in domains that were both related and unrelated to the training program. Trainee unrelated knowledge gain was a function of the joint influence of individual predispositions (to impression manage or engage in self-deception) and motives (need …

The Efects Of Cryptocurrency Wealth On Household Consumption And Investment, Darren Aiello, Scott R. Baker, Tetyana Balyuk, Marco Di Maggio, Mark J. Johnson, Jason Kotter

Faculty Publications

This paper uses transaction-level bank and credit card data to identify cryptocurrency investors and assess the impact of crypto wealth fuctuations on household consumption, as well as on investments in other assets. We fnd an $0.09 MPC from crypto gains, exceeding most previous estimates from unrealized equity gains. However, crypto investors are mostly also active equity investors, with many similar consumption patterns across gains from both asset classes. Households sell cryptocurrencies to increase discretionary and housing expenditures, with the latter causing local house price appreciation.

Peer Effects In Risk Aversion And Trust, Kenneth R. Ahern, Ran Duchin, Tyler Shumway

Faculty Publications

Existing evidence shows that risk aversion and trust are largely determined by environmental factors. We test whether one such factor is peer influence. Using random assignment of MBA students to peer groups and predetermined survey responses of economic attitudes, we find causal evidence of positive peer effects in risk aversion and no effects in trust. After the first year of the MBA program, the difference between an individual and her peers' average risk aversion is only 41% as large as the difference was before starting the MBA. Finding no peer effects in trust is consistent with recent research showing that …

The Effects Of Team Flow On Performance: A Video Game Experiment, Mark Keith, Greg Anderson, Doug Dean, James Gaskin

Faculty Publications

Research on effective team work has traditionally explained team performance as a result of team cohesion and goal commitment. Team cohesion was originally defined as the general level of attraction the team members had to all others in their group. This social relations-based concept of team cohesion is generally a strong indicator of team performance. However, more recent research has stressed the importance of incorporating the team members’ mutual level of commitment to the team task as another sub-dimension of cohesion. When including task commitment, team cohesion is a somewhat weaker predictor of team performance (Beal et al., 2003). To …

Proposing The Affect-Trust Infusion Model (Atim) To Explain And Predict The Influence Of High- And Low-Affect Infusion On Web-Vendor Trust, Paul Benjamin Lowry, Nathan Twyman, Matthew Pickard, Jeffrey L. Jenkins, Son Ngoc Bui

Faculty Publications

Trust is just as essential to online business as it is to offline transactions but can be more difficult to achieve—especially for newer Web sites associated with unknown Web vendors. Research explains that Web vendor trust can be created by cognitive and affective influences. But under what circumstances will emotion more powerfully impact trust and when will cognition be more powerful? Theory-based answers to these questions can help online Web vendors design better Web sites that account for unleveraged factors that will increase trust in the Web vendor.

We adapt the Affect Infusion Model to propose the Affect-Trust Infusion Model …

Library Instruction Case Wiki, Andy Spackman

Faculty Publications

We hope you find the guides and case studies collected here helpful, and we invite you to contribute by discussing your experiences on the discussion page for each case study, and by submitting case studies you have developed and used in your own instructional efforts.

Cases for Advanced Business Students

• Building a Company List - Trucking in Texas
• Company and Market Research - Big Sweety and the Chocolate Manufacturing Industry
• Determining Market Size - Infant Formula
• Entrepreneurial Marketing - The Comic Book Guy
• Global Trade and Economics - Manufacturing Medical Instruments
• International Business - Launching the Wii
• International Marketing - …

You Said What? Assessing The Impact Of Collaboration Technologies And Message Characteristics Using Physiological Measures, Taylor M. Wells, Alan R. Dennis

Faculty Publications

Collaboration technologies often are effective but sometimes they can distort messages, especially in emotional communication. We propose and test a theoretical model to explain how different technologies and message characteristics influence the emotional responses of recipients and how recipients evaluate the emotional content of the messages. Two collaboration technologies—email and voicemail—were examined because they differ in richness and naturalness. As some individuals are more capable in interpreting and understanding emotion, we also examined the role of emotional intelligence. The results show that a message sent via email was likely to trigger a different immediate psychophysiological emotional response and be evaluated …

The Determinants And Consequences Of Information Acquisition Via Edg, Michael S. Drake, Darren T. Roulstone, Jacob Thornock

Faculty Publications

Using a novel dataset that tracks all web traffic on the SEC’s EDGAR servers from 2008-2011, we examine the determinants and capital market consequences of investor information acquisition of SEC filings. The average user employs the database very few times per quarter and most users target specific filing types such as periodic accounting reports; a small subset of users employ EDGAR almost daily and access many filings. EDGAR activity is positively related with corporate events (particularly restatements, earnings announcements, and acquisition announcements), poor stock performance, and the strength of a firm’s information environment. EDGAR activity is related to, but distinct …

Short Selling Around Restatement Announcements: When Do Bears Pounce?, Michael S. Drake, Linda A. Myers, Susan Scholz, Nathan Y. Sharp

Faculty Publications

This paper draws on two distinct literatures – one that investigates the impact of accounting restatements and another that investigates the trading behavior of short sellers – to further our understanding of how sophisticated investors process and respond to news about accounting corrections. We examine short-seller behavior in the days surrounding restatement announcements to determine when short sellers identify restatements and how they trade on restatement news. Our findings suggest that short sellers do not appear to anticipate restatement announcement dates, but we find that abnormal short selling is significantly higher than is typical when restatements are announced, especially for …

Applying Insights From Behavioral Economics To Policy Design, Brigitte C. Madrian

Faculty Publications

The premise of this article is that an understanding of psychology and other social science disciplines can inform the effectiveness of the economic tools traditionally deployed in carrying out the functions of government, which include remedying market failures, redistributing income, and collecting tax revenue. An understanding of psychology can also lead to the development of different policy tools that better motivate desired behavior change or that are more cost-effective than traditional policy tools. The article outlines a framework for thinking about the psychology of behavior change in the context of market failures. It then describes the research on the effects …

What Makes Annuitization More Appealing?, John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian, Stephen P. Zeldes

Faculty Publications

We conduct and analyze two large surveys of hypothetical annuitization choices. We find that allowing individuals to annuitize a fraction of their wealth increases annuitization relative to a situation where annuitization is an “all or nothing” decision. Very few respondents choose declining real payout streams over flat or increasing real payout streams of equivalent expected present value. Highlighting the effects of inflation increases demand for cost of living adjustments. Frames that highlight flexibility, control, and investment significantly reduce annuitization. A majority of respondents prefer to receive an extra “bonus” payment during one month of the year that is funded by …

Trust And Financial Reporting Quality, Jace Garrett, Rani Hoitash, Douglas F. Prawitt

Faculty Publications

Using unique survey data from Great Place to Work R Institute, we investigate the association of intraorganizational trust (i.e., employees’ trust in management) with three aspects of financial reporting: accruals quality, misstatements, and internal control quality. We find that trust is associated with better accrual quality, lower likelihood of financial statement misstatements, and lower likelihood of internal control material weakness disclosures. However, these effects are not uniform across all companies. Consistent with trust improving financial reporting quality through improved information production and information sharing, we find that trust is significantly associated with financial reporting quality in relatively decentralized firms, but …