Auditing, Auditor change, Auditor change disclosure, Delayed hiring

This paper explores relationships between capital values in use (market values, which include “goodwill”, or abnormal growth opportunities) and capital replacement costs for the 52 publicly traded Canadian firms that disclosed such data in 1983 and 1984. Tobin's Q is one at the margin and regresses toward one over time, as predicted by economic theory, but differs across industries: Q‐ratios of manufacturers average one; those of resource firms exceed one, probably reflecting Ricardian rents; those of utilities are less than one, possibly due to regulatory constraints. Q‐ratios based on replacement cost data cannot be accurately estimated from historic cost accounting data. Replacement cost data may contain random measurement error but evidently not bias. Thus the data may be especially useful for assessing the performance of portfolios of firms, in which random error will be diversified away. Cross sectional regression analyses indicate that Canadian accounting procedures overstate shareholders' equity and understate bondholders' equity in replacement costs. Thus some financial ratios based on replacement cost data (e.g., leverage) are biased. Evidence on how deferred taxes are reflected in security prices is ambiguous. Implications of the findings for accounting standard setters, researchers and users of financial statements are discussed. Résumé. L'auteur explore les relations entre les valeurs en capital utilisées (les valeurs marchandes comprenant l'«achalandage» ou les possibilités de croissance inusitées) et les coûts de remplacement de capital pour les 52 entreprises canadiennes inscrites à la bourse qui ont livré ce genre de données en 1983 et 1984. L'indice Q de Tobin est de un à la marge et régresse vers un dans le temps, comme le prévoit la théorie économique, mais il diffère selon les secteurs: les indices Q des entreprises manufacturières sont de un en moyenne; ceux des entreprises d'extraction de ressources excèdent un, ce qui reflète probablement les rentes ricardiennes; et ceux des services pubics sont inférieurs à un, possiblement en raison des contraintes de la réglementation. Les indices Q basés sur les données relatives au coût de remplacement ne peuvent être estimés avec exactitude à partir des données comptables relatives aux coûts d'origine. Les données relatives au coût de remplacement peuvent contenir une erreur de mesure aléatoire mais, bien sûr, aucun biais. Ces données peuvent donc être particulièrement utiles dans l'évaluation du rendement des portefeuilles des sociétés, dans laquelle l'erreur aléatoire sera diluée. Les analyses de régression intersectorielles révèlent que les procédés comptables canadiens surestiment l'avoir des actionnaires et sous‐estiment l'avoir des détenteurs d'obligations en coûts de remplacement. Par conséquent, certains ratios financiers basés sur les données relatives au coût de remplacement (l'effet de levier financier par exemple) sont biaisés. La façon dont les impôts reportés sont reflétés dans le prix des titres est ambiguë. L'auteur traite des conséquences des résultats de cette étude pour les resposables de l'établissement des normes comptables, les chercheurs et les utilisateurs des états financiers.

Researchers often restrict their sample selection to either December or non-December Compustat companies. However, no one has rigorously investigated the implications of this restriction. This paper compares financial characteristics of December and non-December year-end companies. December year-end firms are larger and have smaller betas as compared to companies with non-December year-ends. There are some strong industry concentrations in December year-ends, most notably in the regulated or recently deregulated industries. Retail sales firms have primarily non-December year-ends. A comparison of leverage ratios does not reveal a stable systematic difference between December and non-December year-end companies.

The substitutability between free and slave labor is examined, and the permissibility of aggregating the two in to a single labor variab le is investigated, using a translog production function. Slaves on large cotton farms worked in gangs; free labor was not observed to do so. Despite this, previous research has aggregated free and slave labor, and employed functional forms imposing strong restrictions on substitution. Estimation of the translog function shows that simple additive aggregation is not acceptable; on large farms, slaves and free labor were complements, while on small, nongang farms, they were substitutes. Copyright 1988 by MIT Press.

We report evidence on shareholder wealth effects of 94 firms recapitalizing with dual classes of common stock with disparate voting rights. We find significant, negative abnormal stock price returns at the announcement of the dual-class recapitalization. When we consider recapitalizations separately announced since the NYSE imposed a moratorium is June 1984 on the delisting of companies with dual classes of equity, we find significant, negative abnormal returns as compared with insignificant returns in the earlier period. Those firms recapitalizing from June 1986 through May 1987 experienced the most significant negative returns observed.

On introduit le concept de processus aleatoire vectoriel presque integre. Ce type de processus aide a travailler vers une theorie asymptotique generale de la regression pour des series temporelles multiples

The Rawlsian maximin criterion is combined with nonpaternalistic altruistic preferences in a nonrenewable resource technology. The maximin program is shown to be time-inconsistent for a subset of initial conditions. A solution to this intergenerational conflict is found, under a given assumption, as a generically unique subgame-perfect equilibrium. Copyright 1988 by The Review of Economic Studies Limited.