Business Commons^™

Revised Innocent Spouse Rules Offer Greater Tax Relief, Linda M. Johnson, A. Bruce Clements

Faculty and Research Publications

When a married couple files a joint tax return, both spouses become jointly and severally liable for the income taxes due, including any additional taxes, interest, and penalties determined at a later date. In the event of an underpayment of income tax, the IRS can proceed against either spouse to collect the entire tax deficiency. This places a spouse in a precarious position in situations where the other spouse deliberately omits income or overstates deductions on a jointly filed income tax return, even if the spouse is totally unaware of the other's transgressions. Relief from joint and several liability is …

Measuring Roi: Is It Worth It? Interview By Richard K Thomas, David Marlowe, Daniel Fell, Sheb L. True, Chuck Mcleester

Faculty and Research Publications

Return on investment (ROI) for healthcare marketing is a hot topic among healthcare professionals. It has been discussed off and on in the past, but recent financial developments in healthcare have brought it to the forefront. Today, because of financial pressures, all operational efforts (including marketing) are under intense scrutiny, making the bottom line more important than ever.

Structural Analysis Of Audit Evidence Using Belief Functions, Hai Lu, Hai Lu

Research Collection School Of Accountancy

This article performs two types of analysis using Dempster-Shafer theory of belief functions for evidential reasoning. The first analysis deals with the impact of the structure of audit evidence on the overall belief at each variable in the network, variables being the account balance to be audited, the related transaction streams, and the associated audit objectives. The second analysis deals with the impact of the relationship (logical "and" and "algebraic relationship") among various variables in the network on the overall belief. For our first analysis, we change the evidential structure from a network to a tree and determine its impact.

Who Are We Hiring? Characteristics Of Entrants To The Profession, Heather M. Hermanson, Mary C. Hill, Susan H. Ivancevich

Faculty and Research Publications

Presents the results of a survey among auditors hired by a large international accounting firm in the U.S. as of 2002. Demographic characteristics of new hires; Factors important to new hires in selecting their employer; Initial job expectations of new hires.

Sarbanes-Oxley Act Of 2002; An Act To Protect Investors By Improving The Accuracy And Reliability Of Corporate Disclosures Made Pursuant To The Securities Laws, And For Other Purposes; Public Law 107-240, 107th Congress, United States

Federal Publications

No abstract provided.

Making Better Use Of Information: Aiming Towards "True North", Kathryn Lancaster, William J. Bellows

Accounting

No abstract provided.

Obstacles To International Accounting Standards Convergence, Jane E. Campbell, Heather M. Hermanson, John P. Mcallister

Faculty and Research Publications

Given the recent changes in the international sector, along with the similarities in the conceptual frameworks of the FASB and IASC, the relatively swift convergence of US GAAP and International Accounting Standards is a distinct possibility. This article contends convergence is possible, and reviews 3 key areas that could hinder or foster it: 1. the general organization, in terms of form and topical content, of the frameworks, 2. a significant pervasive difference between the frameworks, and 3. specific differences within the major topical areas of the frameworks.

The High Road, Jane E. Campbell, Heather M. Hermanson, John P. Mcallister

Faculty and Research Publications

Discusses the obstacles to international accounting standards convergence. Effort of the International Accounting Standards Committee (IASC) to promote to convergence theme; Comparison between the convergence frameworks of the U.S. Securities and Exchange Commission and the Financial Accounting Standards Board; Sections of the 'Framework for the Preparation and Presentation of Financial Statements' document issued by the IASC.

Appearances Are Important: Outsourced Internal Audit Services And The Perception Of Auditor Independence, Marshall A. Geiger, D. Jordan Lowe, Kurt J. Pany

Accounting Faculty Publications

The appearance of independence is an important facet of the regulation of auditor independence. The authors conducted a research study to gauge how some financial statement users—loan officers—view and make decisions based on loan proposals that present various types of relationships between the applicant, the auditor that performs the external audit, and the auditor that performs the internal audit function (whether performed in-house or outsourced to the hypothetical loan applicant's external auditor).

The results are insightful: The closer the relationship between the external auditor and the audit client, the higher the perception of inappropriateness, and the less likely the loan …

An Evaluation Of The Usefulness Of Web-Based Financial And Environmental Performance Information Provided By Oil And Gas Companies, Kathryn A.S. Lancaster, Carolyn A. Strand, Janice Carr

Accounting

Environmentally conscious investors require financial information in addition to environmental information to evaluate a company's performance. Sources of such information include organizations that specialize in providing environmental performance data, such as the Council on Economic Priorities (CEP) or the Investor Responsibility Research Center (IRRC). Both of these organizations research, evaluate, and rank companies based on a variety of metrics, and both charge for their service. Through company websites, the Internet offers another potential source of information, since most companies have a "web presence." However, information supplied on a company website has the risk of bias (i.e. the website may be …

The Aicpa's 10 Guiding Principles, Annette M. Nellen

Faculty Publications

Explains the ten guiding principles of good tax policy of a framework outlined in American Institute of Certified Public Accountants Tax Policy Concept Statement No. 1. Analysis of the guiding principles; How the principles can be used to analyze proposals; Application of the guiding principles.

Augmenting Xbrl Using Uml: Improving Financial Analysis, Joseph H. Callaghan, Arline Savage, Vijayan Sugumaran

Accounting

eXtensible Business Reporting Language (XBRL), a financial accounting application of XML, provides a taxonomy for facilitating the analysis of financial statement information. This taxonomy promises to enhance the financial analyst’s ability to process financial information both cross-sectionally and temporally. However, limitations exist in the taxonomy that inhibit the analyst, intelligent agent or application to process information in the most effective way. In particular, financial statement element analysis can only be properly conducted when the additional semantics provided by additional disclosures are incorporated into the process. UML provides a conceptual framework to capture more meaningful semantics, particularly among related, collaborating objects. …

Stewardship, Accounting And Management, Kathryn Lancaster

Accounting

Previous chapters have described the vast array of resources that Cal Poly’s officials oversee. As students, educators and others in the surrounding community continue to use Cal Poly Land and surrounding areas, the ecological system and its capacity to recover become strained. In order to ensure that in 100 years students (and other Cal Poly stakeholders) will be able to have the same opportunities to benefit from the land resources, Cal Poly’s stakeholders need to develop the mind-set and tools to help us maintain and enhance these resources. This section describes several approaches available to help us.

Modeling Xbrl Using Uml: Improving Semantics For Financial Analysis, Vijayan Sugumaran, Joseph Callaghan, Arline Savage

Accounting

eXtensible Business Reporting Language (XBRL), a financial accounting application of XML, provides a taxonomy for facilitating the analysis of financial statement information. This taxonomy promises to enhance the financial analyst‘s ability to process financial information both cross-sectionally and temporally. However, limitations exist in the taxonomy that inhibit the analyst, intelligent agent or application to process information in the most effective way. In particular, financial statement element analysis can only be properly conducted when the additional semantics provided by additional disclosures are incorporated into the process. UML provides a conceptual framework to capture more meaningful semantics, particularly among related, collaborating objects. …

Using Benford's Law To Detect Fraud In The Insurance Industry, Meredith Maher, Michael D. Akers

Accounting Faculty Research and Publications

Benford's Law is the mathematical phenomena that states that the first digits or left most digits in a list of numbers will occur with an expected logarithmic frequency. While this method has been used in industries such as oil and gas and manufacturing to identify fraudulent activity, it has not been applied to the health insurance industry. Since health insurance companies process a large number of claims each year and these claims are susceptible to fraud, the use of this method in this industry is appropriate. This paper examines the application of Benford's Law to four health insurance companies located …

2001-2002 Financial Summary, Morehead State University. Budget & Financial Planning Office.

Morehead State University Financial Summaries Archive

2001-2002 Financial Summary of Morehead State University.

Brief 11: Partnering For Accountability: The Role Of The Chief Financial Officer At An Academic Institution, New England Resource Center For Higher Education, University Of Massachusetts Boston

New England Resource Center for Higher Education Publications

There is rarely a perception in colleges and universities that everyone owns the financial plan. Deans, department chairs, and division heads are most concerned with their own budgets, rather than the aggregate. Mythologies about how the academic and financial sides of the house operate create artificial divisions and compromise the development of shared responsibility. Driven by myth, each side tends to view the other as a threat to its values and priorities. These views often stereotype the other in ways that become self-fulfilling prophesies. For example, Chief Financial Officers (CFOs) believe that academics are inefficient and that CFOs, with their …

An Exploration Of Values And Ethical Choices Of Accounting Students, John Koeplin

Accounting

An individual’s ethical and economic values impact his decision processes when faced with resolving certain dilemmas. The primary issue of this research is to examine the relationship between accounting students’ ethical and economic values and their responses to business dilemmas. Additionally, this study attempted to see if senior accounting students responded with more ethical responses to the dilemmas than did lower-division accounting students.

A measure of ethicality proposed by McCarthy (1997) was compared with subjects’ ethical responses to the business dilemmas. No correlation between the students’ measure of ethicality and the number of ethical responses to business dilemmas was found. …

Closed-End Funds And Turnover Restrictions, Nusret Cakici, Anthony Tessitore, Nilufer Usmen

Department of Accounting and Finance Faculty Scholarship and Creative Works

Past studies have found that investors can earn higher returns than a benchmark by purchasing shares of closed-end funds with discounts or selling shares with premiums. These studies either ignored the impact of transaction costs or used equally weighted portfolio strategies without controls on turnover or transaction costs. We examined whether constraining the holdings of individual funds and turnover has any bearing on the excess returns earned by closed-end equity funds over a benchmark return. We found that when transaction costs were low, portfolios with frequent rebalancing and loose turnover constraints outperformed the benchmark and other portfolios in the period …

2002-2003 Operating Budget, Morehead State University. Budget & Financial Planning Office.

Morehead State University Operating Budgets Archive

2002-2003 Operating Budget of Morehead State University.

Sampling Concepts, Paul Boyd, Ph.D.

MBA Faculty Conference Papers & Journal Articles

The usefulness of any research is dependent upon how well the group studied represents the group about which decisions are to be made or conclusions drawn. That is, it depends upon how well the sample reflects relevant characteristics of the population. When it is possible to study every member of that group there is no problem, for on these occasions we can easily calculate the exact attribute (parameter) of interest for our population.

For example, if we were interested in determining the average number of gallons of gasoline sold to customers at our service station yesterday, we …

Dynamic Funding And Investment Strategy For Defined Benefit Pension Schemes: A Model Incorporating Asset-Liability Matching Criteria, Shih-Chieh Chang, Cheng-Hsien Tsai, Chia-Jung Tien, Chang-Ye Tu

Journal of Actuarial Practice (1993-2006)

This paper studies the dynamic funding policy and investment strategy for defined benefit pension plans using one of the most comprehensive dynamic pension models to date. The model includes three investable assets: one risk free and two risky. The optimal plan decisions are formulated as a stochastic control problem that is solved using dynamic programming. The objective function uses performance measures to take into account the stability and solvency of the plan. The model is then applied to a Taiwanese pension.

Unearned Premiums And Deferred Policy Acquisition Expenses In Automobile Extended Warranty Insurance, Joseph Cheng

Journal of Actuarial Practice (1993-2006)

A prorata formula is commonly used to calculate unearned premium reserves in property-casualty insurance. I believe, however, that an exposure-adjusted formula is more appropriate in automobile extended warranties. This paper describes the exposure-adjusted approach to calculate the unearned premium reserves of an automobile extended warranty insurance program, to test the adequacy of the calculated reserves, and to determine the allowable deferred policy acquisition expenses from an insurance company's perspective.

Further Remarks On Risk Sources Measuring: The Case Of A Life Annuity Portfolio, Mariarosaria Coppola, Emilia Di Lorenzo, Marilena Sibillo

Journal of Actuarial Practice (1993-2006)

The paper considers a model that allows the actuary to measure the riskiness connected to the randomness of projected mortality tables in evaluating a portfolio of life annuities, obtaining a measure to reflect the risk associated with the randomness of the projection. The coherence of the risk parameters with the specific nature of the considered risk sources is also discussed. Numerical examples illustrate the results, showing the importance of the risk components in terms of the number of policies and comparing measure tools obtained by means of two procedures.

Improving Mortality: A Rule Of Thumb And Regulatory Tool, John H. Pollard

Journal of Actuarial Practice (1993-2006)

We develop a simple exact formula for determining cohort life expectancies under constant continuous uniform improvement in mortality using only a cross-sectional (period) Gompertz life table for the lives concerned and a simple approximation applicable to all life tables. The present values of annuities for such lives can be determined simply and accurately across the whole age span.

A Note On The Parallelogram Method For Computing The On-Level Premium, David P.M. Scollnik, Wai Man Sara Lau

Journal of Actuarial Practice (1993-2006)

This paper discusses the differences appearing in the descriptions of the parallelogram method for the determination of earned premium at current rate levels given by McClenahan (1996) and Brown and Gottlieb (2001). It observes that the former is consistent with the method of extending exposures while the latter is not. An illustration is provided. This paper also discusses two other approaches to the determination of the earned premium.

Model Risks And Surplus Management Under A Stochastic Interest Rate Process, Jennifer L. Wang, Rachel J. Huang

Journal of Actuarial Practice (1993-2006)

This paper uses simulations to explore the effects of incorrectly identifying the underlying interest rate process on assets, liabilities, and surplus levels. We show that mismodeling the interest rate (called model risk) could not only lead to a misstatement of the company's surplus, but could also cause a mismatch between the company's assets and liabilities. Our simulations demonstrate that three aspects of interest rates affect model risk: (i) volatility, (ii) level of long-term interest rate, and (iii) the speed at which the drift rate adjusts. We conclude that asset-liability managers should not ignore the impact of the model risks, regardless …

The Effects Of Reputation And Ethics On Budgetary Slack, Douglas E. Stevens

Accountancy Faculty Publications

This experimental study tests the effects on budgetary slack of two potential controls for opportunistic self-interestóreputation and ethics. I manipulate the level of information asymmetry between the subordinate and the superior regarding productive capability and measure the subordinateís reputation and ethical concerns regarding budgetary slack. In this setting, I examine how information asymmetry affects reputation and ethical concerns, and test the effects of these concerns on budgetary slack. Consistent with prior findings, subordinates restrict the slack in their budgets to well below the maximum under a slackinducing pay scheme, even after five periods of experience. Budgetary slack is negatively associated …

Use Of Audit Firm For Non-Audit Services: Is Independence Impaired?, Mary Ellen Oliverio, Bernard H. Newman

Faculty Working Papers

Public accounting firms have increased their scope of services during the final two decades of the 20th century. The Securities and Exchange Commission's proposed July 2000 Revision of the Commissions' Auditor Independence Requirements included scope of services as related to non-audit services provided to audit clients. This is the subject which is the focus of this paper. A survey to secure opinions related to the non-audit services identified in Revision of Independence Requirements and to company policies was designed. A letter, memorandum, and questionnaire were mailed personally to the CEOs of 470 of the Fortune 500 companies. Usable responses were …

Regulations Governing The Practice Of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, And Appraisers Before The Internal Revenue Service; Treasury Department Circular No. 230 (Rev. 7-2002), United States. Internal Revenue Service

Federal Publications

No abstract provided.