Business Commons^™

Top 10 Audit Deficiencies, Mark S. Beasley, Joseph V. Carcello, Dana R. Hermanson

Faculty Articles

The article focuses on financial statement fraud based on cases wherein the U.S. Securities and Exchange Commission sanctioned auditors for their association with fraudulent financial statements. All of the cases involved public companies, most of which engaged ill fraudulent financial reporting. Only a few engaged in misappropriation of assets or defalcation. The most common problem, alleged in 90% of the cases, was the auditor's failure to gather sufficient evidence. In some instances, this failure was pervasive throughout the engagement while in other instances the allegations were more specific. For example, many of the cases involved inadequate evidence in the areas …

An Experimental Study Of Circuit Breakers: The Effects Of Mandated Market Closures And Temporary Halts On Market Behavior, Lucy Ackert, Bryan K. Church, Narayanan Jayaraman

Faculty Articles

This paper analyzes the effect of circuit breakers on price behavior, trading volume, and profit-making ability in a market setting. We conduct nine experimental asset markets to compare behavior across three regulatory regimes: market closure, temporary halt, and no interruption. We find that the presence of a circuit breaker rule does not affect the magnitude of the absolute deviation in price from fundamental value or trading profit. The primary driver of price behavior is information. By comparison, trading activity is significantly affected by the presence of a circuit breaker. Market participants advance trades when a trading interruption is imminent.

An E-Commerce Systems Integration Framework, Ernest A. Capozzoli, Sheb L. True

Faculty Articles

The success of e-commerce activity is directly affected by system integration efforts associated with traditional back office and web-based systems. The potential benefits of enterprise-wide e-commerce activities to an organization emphasize the need for system integration beyond individual sales transactions. Unfortunately, many organizations are not capitalizing on the synergistic advantages of integrated systems. Despite the apparent lack of integration, some organizations are attempting to coordinate such customer activities. Planning for and integrating e-commerce technologies are essential to an organization's survival.

An Empirical Examination Of The Price-Dividend Relation With Dividend Management, Lucy F. Ackert, William C. Hunter

Faculty Articles

Some recent empirical evidence suggests that stock prices are not properly modeled as the present discounted value of expected dividends. In this paper, we estimate a present value model of stock price that is capable of explaining the observed long-term trends in stock prices. The model recognizes that firm managers control cash dividend payments. The model estimates indicate that stock price movements may be explained by managerial behavior.

2001 - The Sixth Annual Symposium Of Student Scholars

Symposium of Student Scholars Program Books

The full program book from the Sixth Annual Symposium of Student Scholars, held on March 30, 2001. Includes abstracts from the presentations and posters.

New Evidence On The Structuring Of Ceo Incentive Pay Ratios, Rajaram Veliyath, James J. Cordeiro

Faculty Articles

The model examines both determinants of CEO incentive pay ratios that are controllable by the CEO, and those that are less controllable, based on a sample of 316 Fortune 500 firms in 1992. Firm diversity, firm growth opportunities, outside blockholdings, and the number of analysts following the firm were positively related to CEO incentive compensation ratios, while firm unsystematic risk, CEO stockholdings, and industry regulation had a negative impact. Finally, industry-specific influences were evident on incentive compensation ratios.

Uncertain Litigation Cost And Seller Behavior: Evidence From An Auditing Game, Ping Zhang, Bryan K. Church, Lucy Ackert

Faculty Articles

Investigates difficulties that arise in estimating expected litigation costs in an auditing game in the United States. Effect of effort level on certain and uncertain costs of performing the engagement; Frequency of observed fee offers below the total expected cost of an engagement; Institutional arrangements and damage-sharing regimes; Theoretical and behavioral predictions.

Preventing Fraudulent Financial Reporting, Mark S. Beasley, Joseph V. Carcello, Dana R. Hermanson

Faculty Articles

Provides information on a study conducted by the Committee of Sponsoring Organizations regarding the detection and prevention of financial fraud. Discussion on the nature of financial frauds; Characteristics of unreliable financial reporting; Views on the role of auditing firms in the prevention of fraud.

Are The Common Myths Of Entrepreneurship All That Common? A Test Of Entrepreneurs And Non-Entrepreneurs, Kevin W. Sightler

Faculty Articles

It has been suggested that there is general misunderstanding in the business and academic communities as to the definition, form, and substance of entrepreneurship. Common myths of entrepreneurship have been advanced such as "Entrepreneurship involves starting and running a small business" and "Entrepreneurship requires a lot of money." A sample of 163 subjects revealed overall disagreement with the stated myths. Evidence supported a hypothesized divergence of opinion about entrepreneurship myths between entrepreneurs and non-entrepreneurs, but there was no difference of opinion between less successful and more successful entrepreneurs. Implications of the findings are discussed.

Evidence Of The Efficiency Of Index Options Markets, Lucy F. Ackert, Yisong S. Tian

Faculty Articles

Index options have been one of the most successful of the many innovative financial instruments introduced over the last few decades, as their high trading volume indicates. Given their prominence, the pricing efficiency of these markets is of great importance. ; Detecting inefficient pricing, or mispricing, requires comparing a theoretically efficient price with prices of options traded in financial markets. One popular approach to deriving pricing relationships is based on a principle called no-arbitrage, which simply assumes that arbitrageurs enter the market and quickly eliminate mispricing if a profit opportunity without risk exists. However, in a well-functioning economy there is …

Considerations For An Effective Telecommunications-Use Policy, Michael E. Whitman, Anthony M. Townsend, Robert J. Aalberts

Faculty Articles

Recent changes in federal telecommunications legislation have underscored the importance of an up-to-date and effective telecommunications-use policy in business organizations. With the proliferation of the Internet, intranets, and email as commonplace business tools, the potential for misuse and subsequent liability has become an increasing concern. Even though the recent Supreme Court decision struck down the obscenity provisions of the Communications Decency Act (CDA), it left intact legislation that effectively mandates development of a sound telecommunications-use policy. In addition to potential liability for systems misuse, organizations have also had to address issues of individual employee privacy within the new systems.

This …

Just Say 'No', Mark S. Beasley, Joseph V. Carcello, Dana R. Hermanson

Faculty Articles

The article discusses the prevention of financial fraud within corporations and businesses in the United States. The types of individuals named in the U.S. Securities and Exchange Commission (SEC) files are examined. Different fraud techniques are looked at, including sham sales, the recording of conditional sales, and unauthorized shipments. The author discusses the status of firms after fraud disclosure and the implications it has for finance professionals.

Differences Between Stayers And Leavers Among Part-Time Workers, Kevin W. Sightler, Janet S. Adams

Faculty Articles

Some 23 million US workers are employed part-time, presenting significant challenges to the practicing manager. Successfully managing turnover has both operational and strategic consequences for an organization. However, very little is known about the turnover of part-time employees. In this exploratory study, a discriminant analysis is presented of biographic characteristics of stayers and leavers among 1,053 part-time hospital employees. Pay, length of employment, management status, race and gender significantly discriminate stayers from leavers. Managerial and research implications are discussed.

Developing A Hospital Web Site As A Marketing Tool: A Case Study, Thomas G. Widmer, C. David Shepherd

Faculty Articles

This article presents a case study which described the efforts of Siskin Hospital to develop a Web site as its marketing tool in 1999. Several years ago. Siskin Hospital, a rehabilitation facility in the southeastern U.S., began the process of developing a hospital Web site. It was agreed that a multidisciplinary team was needed. Then, the next step was to determine target audiences for the site based on the objectives. Fourteen distinct targets were identified. The type of information each would require was brainstormed and detailed. The information types were then prioritized using a matrix developed by the team.

The Threat Of Long-Arm Jurisdiction To Electronic Commerce, Robert J. Aalberts, Anthony M. Townsend, Michael E. Whitman

Faculty Articles

Unfortunately for those whose businesses rely on the Internet, an increasing amount of legal conflict is also arising in reaction to this new business medium. As attorneys and the courts attempt to sort out the Internet’s legal status quo, both are considering such pressing substantive issues as electronic contracts, privacy, trademark, copyright, defamation, computer crimes, censorship, and taxation. It is imperative that information system professionals become aware of how evolving Internet law will affect the medium they are charged with administrating. An informed IS community is also much more capable of mounting legal and political challenges to law that might …

Marketing's Role In Hospital Web Site Development, C. David Shepherd, Daniel Fell

Faculty Articles

No abstract provided.

1998 - The Third Annual Symposium Of Student Scholars

Symposium of Student Scholars Program Books

The full program book from the Third Annual Symposium of Student Scholars, held on May 8th, 1998. Includes abstracts from the presentation and posters.

Building Web Sites That Attract Visitors, C. David Shepherd, Daniel Fell

Faculty Articles

The article discusses the use of web sites for health care service marketing. The potential benefits of Internet services for users and care providers are mentioned, but challenges in implementation are also listed. A three generation model of web site design is offered, distinguishing various levels of interactivity, customization, and perceived value. Suggestions are offered applying this model to health care service web sites and their marketing potential.

How Nonfinancial Performance Measures Are Used, Bonnie P. Stivers, Teresa Joyce Covin, Nancy Green Hall, Steve Smalt

Faculty Articles

Presents information on a survey of Fortune 500 and Canadian Post companies relating to what nonfinancial performance factors are companies measuring and whether they are using the ones they measured. Indication that these factors are not used in planning; Drawbacks identified in the study; Degree to which top executives in these companies identify particular nonfinancial performance factors as important.

Hospital Marketing And The Internet: Revisited, C. David Shepherd, Daniel Fell

Faculty Articles

In 1995 a study was conducted to explore the use of the Internet in hospital marketing. Use of the Internet has exploded since that study was published. This manuscript replicates the 1995 study and extends it by investigating several managerial and operational issues concerning the use of the Internet in hospital marketing.

Health Care Marketing And The Internet, C. David Shepherd, Daniel Fell

Faculty Articles

This article presents research on the growing number of health care providers using the Internet as a health care marketing tool in the U.S. The author notes that the Internet is changing the way consumers seek healthcare related information as well as the way it can be provided to them. The results of the study suggest that consumers will increasingly rely on sources like the Internet for information, that health information will be a commodity on the Internet, that the Internet will help build relationships between providers and consumers and that marketers will be expected to develop and manage Internet-related …

Franchisor Environmental Liability For Previously Contaminated Property, Patrick J. Kaufmann, William S. Vincent

Faculty Articles

Environmental legislation has created potential liability for retailing franchisees that purchase previously contaminated land. Faced with a decision to distance itself from the site selection process or incur the added costs and potential pricing impacts of greater involvement in the process, franchisors have strong incentives to reduce franchisee support. This reduction in support has detrimental implications for both franchise policy and environmental policy. A paper reports the results of an empirical study that links franchisors' concerns about potential environmental liability to actions to distance themselves from the site selection process or, alternatively, formally to require franchisee environmental investigation of all …

Global Auditing And Accounting Confusion, John P. Mcallister, Larry L. Orsini, John D. Gould

Faculty Articles

The article discusses about the accounting and audit standards in the United States, which is different from one country to another due to business practices, fiscal systems and the law regulating a company. The International Federation of Accountants and the International Accounting Standards Committee aimed to a have a consistency of audit and accounting standards around the world, although these diversities can easily identify a company's national origin and as a basis of the financial statements presentation.

Retirement Plan Contributions And Withdrawals, Paul J. Streer, Ray A. Knight, A. Bruce Clements

Faculty Articles

Qualified retirement plans provide for tax deferral, but they are also subject to a 15% excise tax on excess distributions or accumulations, potentially higher marginal income tax rates on plan withdrawals, mandatory contributions for employers, estate taxes at death, and possible substantial income tax liability for plan beneficiaries. Three possible planning strategies to optimize return on funds available for contributions to a qualified plan include investment in alternative assets, lifetime gifts, and accelerated plan withdrawals. While the 3-year suspension of excess distribution excise taxes under the Small Business Job Protection Act may favor plan withdrawals, in certain situations participants are …

1997 - The Second Annual Symposium Of Student Scholars

Symposium of Student Scholars Program Books

The full program book from the Second Annual Symposium of Student Scholars, held on May 23rd, 1997. Includes abstracts from the presentations and posters.

Harnessing Corporate Iq, Bonnie P. Stivers, Teresa Joyce Covin, Nancy Green Hall, Steven W. Smalt

Faculty Articles

Relates that top executives in Canada and in the United States recognize the increasing importance of knowledge resources and other tangible assets to a firm's success. Comparison of knowledge management business practices; Need for change in organizational systems and processes.

Research Note Perceptions Are Reality: How Family Meetings Lead To Collective Action, Timothy G. Habbershon, Joseph H. Astrachan

Faculty Articles

Family meetings develop family unity through the creation of perceived shared beliefs. The article presents a model with strategic implications showing how shared beliefs lead to collective action, which leads to outcomes and then the reassessment of the shared beliefs. Finally, the article reports on initial research on the reliability of instruments developed to explore one aspect of this model: The creation of shared beliefs through family meetings. The initial results suggest that perceptions of shared beliefs may be an important stimulant of collective family activity.

Raising Capital Overseas, John D. Gould, John P. Mcallister, Larry L. Orsini

Faculty Articles

The article states that more and more companies are trying to raise capital by listing their securities for sale on foreign exchanges.More and more companies are trying to raise capital by listing their securities for sale on foreign exchanges. However, the way financial statements are prepared varies from one country to the next. U.S. companies looking to raise capital abroad must consider the myriad rules regarding financial statement presentation just as foreign companies listing stock in the United States must adhere to the rules and regulations of the Securities and Exchange Commission. Similarly, the costs of reconciling U.S. accounting standards …

Organizational Control Systems: Matching Controls With Organizational Levels, Rajaram Veliyath, Heather M. Hermanson, Dana R. Hermanson

Faculty Articles

Companies today face a number of risks, such as environmental liabilities, losses from misuse of derivatives or harassment suits, which underscore the need for better control systems. Clearly, there is a tradeoff between having too much versus too little control. However, in addition to the amount of control, the mix of controls is important in maintaining the right balance within an organization. A framework is proposed that should help managers determine the appropriate matching of control types and control levels in their organizations. The matching is discussed for both traditional companies and modern, information-age companies.

The Role Of Gender In A Developmental Assessment Center, Ted H. Shore, Armen Tashchian, Janet S. Adams

Faculty Articles

Male (n = 119) and female (n = 90) professional employees in a large financial services organization participated in a one-day developmental assessment center, and were assessed in three dyadic role-playing exercises by male or female assessors. In each exercise, one assessor rated participants on specific behaviors which were subsequently averaged by a computer program to produce final exercise dimension ratings. Results showed no significant differences in ratings for male and female assessees on any dimensions in any of the exercises. Women assessors rated candidates of both sexes higher on some dimensions than did male assessors in an employee counseling …