ABSTRACT This study examines the incremental predictive power of aggregate measures of financial misreporting for recession and real gross domestic product (GDP) growth. We draw on prior research suggesting that misreporting has real economic effects because it represents misinformation on which firms base their investment, hiring, and production decisions. We find that aggregate M-Score incrementally predicts recessions at forecast horizons of five to eight quarters ahead. We also find that aggregate M-Score is significantly associated with lower future growth in real GDP, real investment, consumption, and industrial production. Additionally, our result that aggregate M-Score predicts lower real investment one to four quarters ahead partially accounts for why misreporting predicts recessions five to eight quarters ahead. Our findings are weaker when we use aggregate F-Score as a proxy for misreporting. Overall, this study provides novel evidence that aggregate misreporting measures can aid forecasters and regulators in predicting recessions and real GDP growth. JEL Classifications: M41.

ABSTRACT Advisors frequently have an interest in the decisions their advisees make, forcing advisees to distinguish their advisors' unbiased beliefs from their self-interested bias. This task is likely to be especially hard when psychological forces distort advisors' beliefs to make some of their bias sincerely held. In our first experiment, we show that advisors bias both their recommendations and their own actions toward their persuasion goal, and that advisees are better at distinguishing between the unbiased, sincerely biased, and insincerely biased parts of their advisor's recommendation when they meet face-to-face to discuss, compared with when they receive only a written recommendation. Our second experiment shows that advisees distinguish their advisor's bias from their advisor's unbiased beliefs more accurately when the advisors are asked to provide fact-based information about their own actions. Both experiments show that post-report interactions are more helpful for identifying insincere bias than sincere bias. Data Availability: All raw data (excluding identifiable information), data processing code for tabulated analyses, and full experimental materials are available from the authors.

The article presents a report of the Committee on Educational Standards. The purpose of accounting education is to prepare students for careers in accounting and in related fields and to prepare them to deal effectively with problems they will face as practicing members of their profession and as responsible citizens of the social and economic community in which they live. In recent years, the pattern of collegiate education for business in the U.S. has received considerable attention. The resulting re-examination of objectives, evaluations of course content, and revisions of curricula have had a major impact on accounting education as an element in the business school program. As the accounting function in modern society grows, the role of the accountant inevitably becomes larger and more important. The demand for well-educated accountants is currently high and promises to remain strong in the foreseeable future. The purpose of this study is to formulate some guidelines pointing to the educational standards that should prevail in any institution of higher education that offers degree programs involving a major in accounting, to the end that one or more degrees in accounting will indicate a standard of educational background and qualification for a professional field.

ABSTRACT We document that managers stockpile excess inventory to mitigate the operational risk posed by labor unions and to maintain bargaining power in labor negotiations. Inventory levels are higher for union firms and are incrementally higher preceding the renegotiation of collective bargaining agreements with unions. Inventory stockpiling at union firms is more salient when capital market pressure for transparency or information spillover from peers constrains managers from using disclosure strategies. We further show that managers weigh the costs and benefits of inventory stockpiling, as holding excess inventory due to the presence of a union is negatively associated with future profitability, but provides the benefits of avoiding a stockout and mitigating negative outcomes from a strike. Our findings highlight the importance of a major stakeholder, i.e., labor, in managers' investment decision making. Data Availability: All data are available from the public/private sources cited in the text. JEL Classifications: G31; J52; J53.

ABSTRACT We provide theory and experimental evidence consistent with an unintended, causal relation between Corporate Social Responsibility (CSR) performance and investors' estimates of fundamental value that can be attenuated by investors' explicit assessment of CSR performance. Consistent with “affect-as-information” theory from psychology, we find that investors who are exposed to, but do not explicitly assess, CSR performance derive higher fundamental value estimates in response to positive CSR performance, and lower fundamental value estimates in response to negative CSR performance. Explicit assessment of CSR performance, however, significantly diminishes this effect, indicating that the effect among investors who do not explicitly assess CSR performance is unintended; i.e., they unintentionally use their affective reactions to CSR performance in estimating fundamental value. Supplemental findings shed light on consequences of these fundamental value estimates: investors who do not explicitly assess CSR performance rely on their unintentionally influenced estimates of fundamental value to increase the price they are willing to pay to invest in the stock of a firm with positive CSR performance. Overall, our theory and findings contribute to the CSR and affect literatures in accounting by revealing the contingent nature of how and to what extent CSR performance influences investors' beliefs about firm value and the bids these investors are likely to make in equity markets. Data Availability: Contact the authors.

ABSTRACT We study links between the labor market for loan officers and access to mortgage credit. Using novel data matching mortgage applications to loan officers, we find that minorities are underrepresented among loan officers. Minority borrowers are less likely to complete mortgage applications, have completed applications approved, and to ultimately take up a loan. These disparities are reduced when minority borrowers work with minority loan officers. These pairings also lead to lower default rates, suggesting minority loan officers have an informational advantage with minority borrowers. Our results suggest minority underrepresentation among loan officers reduces minority borrowers’ access to credit.

In a randomized controlled trial, we test whether removal of a barrier to exercise can improve academic performance.We find strong support for this hypothesis: university students who were provided with a free gym card exercised more and had a significant improvement in academic performance.The treated students were both less likely to drop out of classes and to fail at the exam.We provide evidence showing that exercise caused a healthier lifestyle and increased perceived self-control, which ultimately improved academic performance.The study demonstrates that removing barriers to physical activity can be an important tool for improving educational achievements.

This article presents information on various books related to accountancy. The book "An Accountant's Guide to Databases," by K.N. Bhasker, examines the basic concepts and terminology of database management and its implications for the field of accounting. The book begins with a brief introduction to current micro-technology and the organization of computer files and defines three distinctive meanings of the term database relevant to its use in accounting. The purpose of the book "Comprehensive Auditing in Canada: Theory and Practice," by James Cutt, is the development of a theory and methodology for a comprehensive auditing model by examination of current theory and practice in the areas of auditing and policy analysis or program evaluation. The theory and methodology developed is designed primarily for the nonprofit component of the public sector but is extended to the profit component of the public and private sectors. In the book "The British Accounting Review Research Register 1988," edited by K.P. Gee and R.H. Gray, the data presented has been gathered from across 90 universities, polytechnics and colleges, and provides information on 1,072 accounting and finance academic staff members throughout the British Isles.

Focuses on a project by the American Accounting Association's Committees on Professional Examinations which evaluated the professional examinations for accountants. Objectives of the project; Methodology of the projects; Comparison of examinations and accounting curricula; Recommendations.