Business Commons^™

The Influence Of Management’S Internal Audit Experience On Earnings Management, Matthew Ege, Timothy Seidel, Mikhail Sterin, David A. Wood

Faculty Publications

We examine whether firms with managers that have prior internal audit experience are less likely to manage earnings. This examination is important because the internal audit function is uniquely positioned to provide experiences that could influence future managerial behavior, including limiting the potential negative repercussions of earnings management. We find that firms with managers that have internal audit experience are associated with lower real earnings management but not accruals-based earnings management. Effects are strongest when managers with internal audit experience have greater power or currently hold financial roles, or when there are a greater number of managers with internal audit …

Evidence On Internal Audit Quality From Transitioning To Remote Audits Because Of Covid-19, Marc Eulerich, Martin Wagener, David A. Wood

Faculty Publications

As in-person audits were banned by governments and by company policies due to the COVID-19 pandemic, internal auditors had to transition to remote audits to perform their work. Based on survey responses of internal auditors who have conducted both remote and in-person audits, we find that internal auditors perceive no difference in the efficiency and effectiveness of and stakeholders’ reliance on results from remote and in-person audits when considering all responses. However, we also find that perceived efficiency and effectiveness increase the more experience internal auditors have with remote audits. Supplemental analyses show that support from the auditee, but not …

Brokerage Relationships And Analyst Forecasts: Evidence From The Protocol For Broker Recruiting, Braiden Coleman, Michael S. Drake, Joseph Pacelli, Brady Twedt

Faculty Publications

We offer novel evidence on how the nature of brokerage-client relationships can influence the quality of equity research. We exploit a unique setting provided by the Protocol for Broker Recruiting to examine whether relaxed broker noncompete agreement enforcement generates spillover effects on sell-side analysts. Entry into this agreement reassigns ownership of the client relationship from the brokerage to individual brokers, potentially generating a greater standard of care. Using a generalized difference-in-differences research design, we provide evidence consistent with brokers reducing pressure on analysts to produce optimistic research following protocol entry. This effect is concentrated among less experienced and non-All Star …

The Relevance Of Non-Income Tax Relief*, Michael S. Drake, Ryan V. Hess, Jaron H. Wilde, Braden M. Williams

Faculty Publications

Governments regularly offer non-income tax relief to attract business investment. However, it is unclear whether or how markets impound information about the relief into security prices. We use novel data from retrospective public records to examine the information content of non-income tax relief. We predict and find that the receipt and magnitude of this relief are both strongly associated with recipients’ future accounting performance and future abnormal returns. We further find that abnormal returns associated with the relief cluster around future earnings information events. In combination, this evidence suggests that non-income tax relief is value-relevant but is incorporated into prices …

A Tale Of Two Index Funds: Full Replication Vs. Representative Sampling*, Travis Dyer, Nicholas Guest

Faculty Publications

We examine the two approaches used by equity index funds to track their benchmark index. The first, full replication, mimics the index with exactness. The second, representative sampling, holds a subset of the index. We find that samplers trade 3-4 times more, have 30-50% higher expenses and fees, and earn 50-70 basis points lower annual returns, which is substantial given index funds’ mandate to limit tracking error to a few basis points. Besides higher expenses and transaction costs, poor stock picking also seems to contribute to samplers’ return underperformance. Overall, our analyses suggest representative sampling is associated with underperformance.

Tax Boycotts, H. Scott Asay, Jacob Thornock, Jeffrey L. Hoopes, Jaron H. Wilde

Faculty Publications

To what extent do consumers boycott in response to corporate tax activities? Anecdotes suggest potential consumer backlash is a meaningful deterrent to corporate tax planning, and the tax literature has developed expectations that these boycotts happen. But empirical evidence on their existence and impact is limited. We undertake a comprehensive study to examine how consumers’ purchase behavior relates to corporate tax activities, triangulating across several designs, samples, and measures. First, we survey a representative sample of U.S. consumers to examine the reported relationship between corporate tax planning and consumer behavior; we find that consumers report that precisely zero have ever …

Developing The Experience Impact Scale: A Qualitative Study Using A Study Abroad And International Internship Program, Neil Lundberg, Peter Ward, Grant Lundberg, Brian Hill, Jennifer Brown, Ramon Zabriskie, Mat Duerden, Heather Ashby

Faculty Publications

Recent work has identified different experience types, including experience classifications of ordinary, memorable, meaningful, and transformative. This study further clarifies the experience typology through qualitative data analysis of each experience type. Data analysis identified that within each extraordinary experience type, additional subtypes were present. Experience types and subtypes were organized according to the experience typology continuum into a 10-item Experience Impact Scale (EIS), as no instrument to measure experience types or experience impact was available. An expert panel was used to determine the representativeness of the items in the EIS and to provide content-related evidence of validity. Discussion of the …

Where Have All The Children Gone? A Review Of The Presence Of Children Under 6 Years In Leisure Publication Outlets, Rachel A. Mcgovern, Ericka J. Olschewski, Camilla Hodge

Faculty Publications

We conducted a focused search of nine pre-determined leisure journals to (1) determine the prevalence and scope of research on children younger than 6 years (i.e., young children) published in leisure- focused outlets, (2) describe study designs and research methods used to study this age group, (3) tabulate definitions of child leisure, and (4) provide an overview of the studies’ findings. Overall, findings indicate a marked absence of young children from leisure research. Only 28 articles in almost half a century of leisure journal publications met inclusion criteria. Eight studies focused on children as the subject or participant, five articles …

Experience Design In Leisure And Recreation Curriculum, Madie Neeley, Sydney Burgess, Mat D. Duerden, Neil Lundberg

Faculty Publications

Experience design is a term that has risen to the forefront in a variety of professional fields and has relevance for the field of park and recreation. Park and recreation professionals are primarily focused on providing experiences and thus could naturally consider themselves experienced designers. Surprisingly, experience design is not a topic often discussed within park and recreation publications or curriculum. This absence is at least in part attributable to the fact that experience design is an emerging field that has grown independently out of multiple disciplines. Consequently, the fields of park and recreation and experience design overlap in a …

Experience Journey Map: A New Experience Design Tool For Structuring Youth Activities, Gary D. Ellis, Jingxian Jiang, Darlene Locke, Patti A. Freeman, Kaylee Jorgensen

Faculty Publications

We introduce a new experience design tool, an experience journey map, to assist youth professionals in planning engagement, immersion, and absorption activities. Experience journey maps are based on customer journey maps, which are widely used in business service design. This new approach highlights strategies for engendering deep structured experiences during the activity. An experience journey map is a matrix of columns and rows. Columns represent the sequence of activity stages. Rows are experience-structuring strategies derived from the theory of structured experience. These strategies include service performance strategies, deep structured experience strategies, and engagement, immersion, and absorption strategies. We present a …

Competing For Deal Flow In Local Mortgage Markets, Darren Aiello, Mark Garmaise, Gabriel Natividad

Faculty Publications

The U.S. mortgage market exhibits competitive instability in which some lenders emerge rapidly from the fringe to substantial market shares. Using inferred discontinuities in application acceptance models to generate local lending shocks, we analyze the impact on a lender of a surge in originations by its competitors. We show that the quickest-growing (not the largest) competitors divert applications and originations from other lenders. Facing a quickly-growing competitor, lenders charge higher interest rates, partially due to the increased risk of their loans. Loan performance suffers for other lenders as the quickestgrowing competitor’s originations increase.

Financially Constrained Mortgage Servicers, Darren Aiello

Faculty Publications

Financially constrained mortgage servicers destroyed substantial MBS investor value during the financial crisis through their management of delinquent mortgages. Servicers advance to investors monthly payments missed by borrowers. In order to minimize this obligation to extend financing to distressed borrowers, constrained servicers aggressively pursued foreclosures and modifications at the expense of investors, borrowers, and future mortgage performance. When agency frictions between the servicer and the investor are higher, the servicer’s financial constraints matter more. IV regressions suggest that, on average per defaulted loan, servicers’ financial constraints are responsible for 20% of the total investor value reduction during the financial crisis.

An Analysis Of Selling Concessions, Reallowance Fees, And Price Changes In The Marketing Of Ipos, James C. Brau, Joseph J. Henry

Faculty Publications

This paper provides an economic model resulting in two distinct marketing strategies available to investment bankers. First, we hypothesize that an increased selling effort by brokers is used most effectively when the investment clientele is uninformed. Second, adjusting the offer price of the issue is hypothesized to be employed primarily in large IPOs with a clientele of sophisticated investors, consistent with Shiller’s Impresario Hypothesis. Our pre-IPO bubble (1981-1996) empirical results yield evidence supporting both selling mechanisms. Under-demanded small IPO issues are ‘pushed’ by the brokers, while some under-demanded large IPO issues instead increase the offer price, with large first-day turnover …

Back From The Future: Mediation And Prediction Of Events Uncertainty Through Event-Driven Models (Edms), Samuel Ogbeibu, James Gaskin

Faculty Publications

The event-driven model (EDM) is an emerging concept in human behavioural research, and understanding how EDMs can promote theory development remains a fundamental quest of predictive science. Traditionally, researchers have heavily depended upon theory confirmation and the inclusion of mediating constructs to clarify uncertainty associated with plausible events (e.g. political, socio-economic, technological, environmental). Though this approach has pushed the field forward, it has also steered mediation research towards largely ignoring the fundamental role of prediction as a key for better understanding future events represented by EDMs. Additionally, emerging research using partial least squares structural equation modelling to execute prediction-oriented analysis …

Transformational It Leaders And Digital Innovation: The Moderating Effect Of Formal It Governance, Linda M. Pittenger, Nicholas Berente, James Gaskin

Faculty Publications

Does formal IT governance encourage innovation in the traditional domains of the IT function at the expense of new forms of “digital” innovation? We report on a study of 158 IT managers and leaders to understand the conditions under which transformational IT leadership can drive innovation in traditional forms of IT, as well as in the emerging “digital” domain. We find that highly formal IT governance practices can reduce ability of transformational IT managers and leaders to innovate in both domains, and this effect is greater for digital innovation. In stable cultures the moderation effect was strengthened, while insignificant in …

Digital Behavioral Biometrics And Privacy: Methods For Improving Business Processes Without Compromising Customer Privacy, Joseph S. Valacich, Jeffrey L. Jenkins, D. Čišić

Faculty Publications

To enable people to interact with online websites and systems, browsers capture a variety of events that occur on the page—such as how a person is moving the computer mouse, what a person clicks on, what a person types, and whether a person is scrolling. These events represent a user’s behavior on a page, referred to as the DOM or Document Object Model, and are recorded at a millisecond precision rate (e.g., the exact millisecond timestamp when a key goes down and when it comes back up). Research and practice alike have found that these behavioral events can provide powerful …

The Path Of The Righteous: Using Trace Data To Understand Fraud Decisions In Real Time, Markus Weinmann, Joe Valacich, Christoph Schneider, Jeffrey Jenkins, Martin Hibbeln

Faculty Publications

Trace data—users’ digital records when interacting with technology—can reveal their cognitive dynamics when making decisions on websites in real time. Here, we present a trace-data method—analyzing movements captured via a computer mouse—to assess potential fraud when filling out an online form. In contrast to incumbent fraud-detection methods, which analyze information after submission, mouse-movements traces can capture the cognitive dynamics of a decision to be fraudulent as it is happening. We report two controlled studies using different tasks, where participants could freely commit fraud to benefit themselves financially while we captured mouse-cursor movement data. We found that participants who entered fraudulent …

An Institutional Theory Perspective On Ehr Engagement: Mandates, Penalties, And Enforcement, Mark J. Keith, Elina Chun Stewart, Tevin Stewart, Mitchell Josephson, Bob Cash, Connor Bice

Faculty Publications

Electronic Health Record (EHR) systems are the predominant information system (IS) used by healthcare clinicians and have been the source of both great success and pain. User engagement with EHR systems is unique from traditional IS contexts in significant ways. Prior research explains EHR usage and success primarily on traditional technology acceptance research (i.e., TAM, UTAUT). However, these models assume that EHR engagement is no different from IS systems in general business domains. Yet, the healthcare context is far more regulated than most. Based on qualitative focus group sessions with a leading healthcare analytics firm (KLAS Research), we identify the …

Information Filtering In Electronic Networks Of Practice: An Fmri Investigation Of Expectation (Dis)Confirmation, Kelly J. Fadel, Thomas O. Meservy, C. Brock Kirwan

Faculty Publications

Online forums sponsored by electronic networks of practice (ENPs) have become an important platform for technology-mediated knowledge exchange, yet relatively little is known about how ENP participants filter and evaluate the information they encounter on these forums. This study integrates perspectives from expectation confirmation theory, prospect theory, and neuroscience research to explore how ENP forum filtering judgments are influenced when expectations formed on the basis of contextual cues are confirmed or disconfirmed by the examination of solution quality. We summarize six different models of expectation confirmation explored in previous IS literature and report the results of a neuroimaging experiment using …

Marketing Of Luxurious Gastronomic Experiences On Social Media: The Visual Storytelling Of Luxury Hotels, Noela Michael, Francesc Fusté-Forné

All Works

The role of luxury as a source of tourism experiences is gathering growing attention, with special attention to the foundations of the relationships between gastronomy and social media marketing. Drawing from a visual methodology, this study analyses how luxury hotels (Burj Al Arab, Emirates Palace, St. Regis Saadiyat Island, and Atlantis) in the UAE promote gastronomy by identifying visual features of social media posts (N = 1866) to manage their image of luxury. Results show that the most relevant drivers of luxury gastronomy are the discovery of cultures, experiences in the hotel environment, novelty and hedonism, and promotion of a …

The Diversity Risk Paradox, Veronica Root Martinez

Faculty Scholarship

There is a growing body of literature discussing the proper role of diversity, equity, and inclusion efforts by and within public firms. A combination of forces brought renewed energy to this topic over the past few years. The #MeToo movement demonstrated a whole host of inequities faced by women within workplaces. Business Roundtable’s 2019 Statement on the Purpose of a Corporation rejected the view that the purpose of the corporation was solely to be focused on the maximization of shareholder wealth. And, in 2020, the murder of George Floyd ignited a racial reckoning within the United States, which prompted many …

Opportunity Zones: A Program In Search Of A Purpose, Ofer Eldar, Chelsea Garber

Faculty Scholarship

In 2017, Congress created the Opportunity Zone (“OZ”) program to stimulate economic growth in low-income communities. The program was characterized by its unprecedented scale relative to previous place-based development efforts and was described as “perhaps the most ambitious economic development tool to come out of Congress in a generation.” However, the program was quickly criticized on numerous grounds, and its design flaws are so severe that several legislators have called for its reform or repeal.

This Essay argues that the root of the OZ program’s problems is a strong mismatch between its stated purpose and its actual terms. We discuss …

Regulating Global Stablecoins: A Model-Law Strategy, Steven L. Schwarcz

Faculty Scholarship

Digital currencies have the potential to improve the speed and efficiency of the payment system. The principal challenge is retail: to facilitate day-to-day payments among consumers as an alternative to cash, both domestically and across national borders. Two models of digital currencies are becoming viable: central bank digital currencies and nongovernment-issued currencies that are backed by assets having intrinsic value (stablecoins or, when widely used internationally, global stablecoins). Because they are not government issued, global stablecoins present complex and novel cross-border regulatory challenges, including managing the costs of complying with a multitude of national laws and ensuring international legal enforceability. …

Regulating Digital Currencies: Towards An Analytical Framework, Steven L. Schwarcz

Faculty Scholarship

Digital currencies have the potential to improve the speed and efficiency of payments and to broaden financial inclusion. The principal goal is to facilitate payments among consumers on a day-to-day basis as an alternative to cash, both domestically and across national borders. This Article begins by critically examining and critiquing the ongoing progress of trying to develop retail digital currencies, focusing on the two most feasible approaches: central bank digital currencies (“CBDC”), and privately issued currencies that are backed by assets having intrinsic value (“stablecoins”). The Article then analyzes how these digital currencies should be regulated and supervised, exploring their …

The Corporate Governance Gap, Kobi Kastiel, Yaron Nili

Faculty Scholarship

A reliable system of corporate governance is considered an important requirement for the long-term success of public companies and for the good of society at large. After decades of research and policy advocacy, there is a growing sense that corporations are finally nearing the promised land: boards of public corporations seem more diverse, large investors seem more engaged, and directors seem more accountable than ever. But is this perception accurate? While many large, high-profile companies tend to serve as role models of desirable governance practices, the picture of corporate governance—as this Article reveals—is considerably different in the far corners of …

Board Gatekeepers, Yaron Nili

Faculty Scholarship

For the last decade, investors, scholars, and regulators have turned to independent directors in key leadership positions as a means to safeguard corporate boards’ ability to serve as a robust check on management’s power. As a result, a vast majority of public companies’ boards are now led by an Independent Chair, or, alternatively, include a Lead Independent Director.

These ostensible outsiders—which this Article calls “board gatekeepers”—are meant to be even more empowered and detached from management compared to the rest of the board. This allows them to serve an independent gatekeeping function—a necessary guardrail against management’s ability to exert undue …

Economic Influence Activities And The Strategic Location Of Investment, John M. De Figueiredo, Davin Raiha

Faculty Scholarship

This article examines the economic influence activities (EIAs) of firms. We argue that firms invest in jobs and establishments in districts of congressional committee members that have oversight over their businesses and industries. This investment increases as legislators’ power rises in Congress. Our theory makes three predictions. First, EIAs by firms will be higher in congressional districts where the legislators have substantial political influence over the firm, relative to districts where legislators have little influence over the firm. Second, EIAs will increase with the legislators’ power on the focal committee. Third, when a legislator exits the committee, EIAs will diminish, …

Collected Papers (On Various Scientific Topics), Volume Xiii, Florentin Smarandache

Branch Mathematics and Statistics Faculty and Staff Publications

This thirteenth volume of Collected Papers is an eclectic tome of 88 papers in various fields of sciences, such as astronomy, biology, calculus, economics, education and administration, game theory, geometry, graph theory, information fusion, decision making, instantaneous physics, quantum physics, neutrosophic logic and set, non-Euclidean geometry, number theory, paradoxes, philosophy of science, scientific research methods, statistics, and others, structured in 17 chapters (Neutrosophic Theory and Applications; Neutrosophic Algebra; Fuzzy Soft Sets; Neutrosophic Sets; Hypersoft Sets; Neutrosophic Semigroups; Neutrosophic Graphs; Superhypergraphs; Plithogeny; Information Fusion; Statistics; Decision Making; Extenics; Instantaneous Physics; Paradoxism; Mathematica; Miscellanea), comprising 965 pages, published between 2005-2022 in different …

نيوتروسوفيك أوفرسيت ، نيوتروسوفيك أونديرست ، وإزاحة نيوتروسوفيك [Neutrosophic Overset, Neutrosophic Underset, And Neutrosophic Offset], Florentin Smarandache, Riad K Al-Hamido (Translator From English To Arabic)), Khaled Adnan Alabdullah (Translator From English To Arabic)

Branch Mathematics and Statistics Faculty and Staff Publications

تم تعريف Neutrosophic Over-/ Under- / Off-Set and -Logic لأول مرة بواسطة Smarandache في عام 1995 ونشر في عام 2007. وهي مختلفة تمامًا عن المجموعات / المنطق / الاحتمالات الأخرى. قام بتمديد مجموعة العدلات على التوالي إلى Neutrosophic Overset {عندما يكون بعض مكونات neutrosophic> 1} ، Neutrosophic Underset {عندما يكون بعض مكونات neutrosophic <0} ، وإلى إزاحة Neutrosophic {عندما تكون بعض مكونات العدلات خارج الفاصل الزمني [0 ، 1] ، أي بعض مكونات العدلات> 1 ومكونات أخرى نيوتروسوفيك <0}. هذا ليس مفاجئًا فيما يتعلق بالمجموعة / المنطق الغامض الكلاسيكي ، أو المجموعة / المنطق الغامض الحدسي ، أو الاحتمال الكلاسيكي / غير الدقيق ، حيث لا يُسمح بالقيم خارج الفاصل الزمني [0 ، 1] ، نظرًا لأن عالمنا الحقيقي به العديد من الأمثلة و تطبيقات المكونات الزائدة / السفلية / البعيدة عن العدلات

Neutrosophic Over-/Under-/Off-Set and -Logic were defined for the first time by Smarandache in 1995 and published in 2007. They are totally different from other sets/logics/probabilities. He extended the neutrosophic set respectively to Neutrosophic Overset {when some neutrosophic component is > 1}, Neutrosophic Underset {when …

Collected Papers (On Neutrosophic Theory And Its Applications In Algebra), Volume Ix, Florentin Smarandache

Branch Mathematics and Statistics Faculty and Staff Publications

This ninth volume of Collected Papers includes 87 papers comprising 982 pages on Neutrosophic Theory and its applications in Algebra, written between 2014-2022 by the author alone or in collaboration with 81 co-authors from 19 countries.