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Full-Text Articles in Business
Size Variables In Audit Fee Models: An Examination Of The Effects Of Alternative Mathematical Transformations, Charles Cullinan, Hui Du, Xiaochuan Zheng
Size Variables In Audit Fee Models: An Examination Of The Effects Of Alternative Mathematical Transformations, Charles Cullinan, Hui Du, Xiaochuan Zheng
Accounting Department Faculty Journal Articles
We consider the mathematical transformations used for assets of different valuation complexity in audit fee models. These mathematical transformations (such as logs and square roots) relate to the non-linear relationship between client size and audit fees. We use closed-end mutual fund audits to examine this question because virtually all fund assets are reported at fair value. We find that more complexly valued assets are less likely to follow the traditional log transformation because the presence of these assets has a stronger relationship with audit fees that is not fully captured by the coefficient on the logged variable alone. The significance …
Acquisitions Of Bankrupt And Distressed Firms, Elena Precourt, Henry Oppenheimer
Acquisitions Of Bankrupt And Distressed Firms, Elena Precourt, Henry Oppenheimer
Accounting Department Faculty Journal Articles
In this paper we focus on acquisitions of bankrupt firms and firms that recently emerged from Chapter 11 and compare these firms with acquired distressed firms to determine whether or not transaction timing plays a role in the outcomes of the mergers. We analyze deal premiums (or lack thereof) and evaluate post-merger operating cash flows to determine whether or not timing of the transactions impacts their effectiveness and success. We also evaluate targets and their acquirers’ stock price reactions to the announcements of acquisitions. We find that distressed targets sell their assets at a premium or at a discount smaller …