Business Commons^™

The Association Fallacy – Fraud And Financial Reporting Quality In The Customer-Supplier Relationship, Nicholas Willett

Honors Scholar Theses

As with individuals, corporate entities are vulnerable to committing logical fallacies in the decision-making process. One such fallacy that has been observed across multiple disciplines is the phenomenon of guilt by association, here referred to as the “association fallacy.” In this study, I demonstrate the existence of the association fallacy within historical customer-supplier relationships, during which the supplier is named in an SEC Accounting and Auditing Enforcement Release (AAER). A panel regression is employed to track indicators of customer earnings management behavior in the years before, during, and after the supplier AAER. A cross-sectional analysis is also used to assess …

Tax Efficient Supply Chains: Analysis Of Multinational Corporations With Swiss Subsidiaries, David Liu

Honors Scholar Theses

I examine whether U.S. corporations can strategically organize global supply chains to achieve tax efficiency by creating or acquiring subsidiaries in Switzerland. In particular, I study if there is an association between a firm’s use of Swiss subsidiaries and the firm’s effective tax rate using a sample of firm years from 1998 to 2013. Under U.S. rules prior to the Tax Cuts and Jobs Act of 2017 (TCJA), firms with subsidiaries in low-tax-rate foreign countries (e.g., Switzerland) could generally avoid U.S. tax on foreign income by not repatriating income. The 2014 Caterpillar Inc. case study offers an example of how …

The Impact Of Asu 2016-14 On Not-For-Profit Operating Cash Flow Presentation, Grace Lauber

Honors Scholar Theses

In 2011, FASB added a project to its agenda to improve financial statement reporting for not-for-profit (NFP) entities. They issued a proposal in 2015 that would require all NFPs to use the direct method to report operating cash flows on the statement of cash flows. This proposal received a wide range of feedback from NFPs via comment letters. In response to this feedback, FASB altered the final update, ASU 2016-14, to continue allowing the indirect method. However, they encouraged use of the direct method by removing the indirect method reconciliation requirement for NFPs. This study examines the responses of 129 …

Valuation Of Intangible Assets: Should Brand Equity Be Accounted For On The Balance Sheet?, Brooke Wasserman

Honors Scholar Theses

Brand valuation has become a commonplace tool for assessing company performance related to marketing and promotions of businesses. However, current U.S. and international accounting standards inhibit the recording of brands as assets on financial statements due to their intangible nature. This paper discusses the importance of understanding the contribution that brands provide to companies and outlines the potential options for reporting any associated intangible assets on financial statements. I suggest that additional reports should be included alongside currently required financial statements to record brand value separately from the other statements. The intangible brand assets should not be placed as a …

Corporate Tax Havens: Analysis Of An Aggressive Tax Approach As A Strategic Necessity For Large Multinational Corporations, Julia Galica

Honors Scholar Theses

This study will examine the complexities of corporate tax planning, with a focus on tax deferral strategies employed by United States multinational corporations, providing a financial and ethical analysis of corporate tax entities. The focus will be on multinational corporations, primarily Fortune 500 Companies. It will then evaluate trends across industries and contrast the patterns of unrecognized tax benefits reported by large and small scale public companies. Additionally, the paper will analyze the effective tax rate paid by a sample of corporations of varying size and industry, and how these characteristics of the business correlate with this rate. The study …

Public Accounting, International Standards, And You: A Closer Look On The Impact Of Ifrs And Gaap Convergence, Daniella Lomo

Honors Scholar Theses

The convergence of US GAAP and IFRS has been significant for the US Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) over the decade. Due to major differences such as with the consolidation model and the special entities (i.e. Research and Development), there are concerns of how the convergence will affect the accounting practice. The US GAAP is known to have more industry-based details than the IFRS, and so it is essential to know what kind of issues lie from industry to industry. Here, our focus is within the life sciences. More specifically, this paper examines …

Minorities And Women In Accounting, Alyssa K. Lee

Honors Scholar Theses

Traditionally, the field of public accounting has been dominated by white males. Today, minorities and women have been steadily penetrating the profession. As these diverse groups work together, conflicts in culture and awareness often arise. In this paper, I will discuss some of the origins of these conflicts and their effects on the people involved.

Accounting For Goodwill Pre&Post Sfas 142 And The Implications For Earnings Management, Liang Jian Wu

Honors Scholar Theses

This thesis explores how impairment charges driven by management assessment have led to the possibility of earnings management under the SFAS 142 standard. The goal of carrying out this research is to help the user understand the implications behind allowing management to judge impairment charges (US GAAP) versus pre SFAS 142 when intangibles such as a goodwill were amortized (currently IFRS).

How has SFAS 142 opened the door for earnings management? If there is evidence to prove this assumption, then what factors drive management's impairment decisions. This information is pertinent to investors when analyzing a potential investment as goodwill can …

Impact On Financial Statements Of New Accounting Model For Leases, Wenqi Ma

Honors Scholar Theses

On August 17, 2010 the IASB and FASB published an Exposure Draft on leases. A new accounting model for leases which would include both financing lease and operating leases was proposed. According to the World Leasing Yearbook 2010, $640 billion was involved in leasing activity, of which a significant amount is not reported on the lessees' balance sheets [1]. The current leases which firms report in the financial statement notes showed that most companies currently have financing leases although many do not capitalize all of these leases. The new accounting model for leases would be a challenge for companies to …

Accounting For Athletics: A Balanced Scorecard Approach, Daniel D. Delaney

Honors Scholar Theses

The Balanced Scorecard is a managerial accounting system designed for internal use in order to align four different facets of a business with its overall vision and strategy. It emphasizes that an organization should not be judged on financial performance alone, but also on a variety of non-financial metrics. Using the Balanced Scorecard, the Athletic Department at the University of Connecticut has been analyzed as to which metrics are the most important in terms of fulfilling their mission statement.