Presents an interview with Professor Herbert A. Simon of Carnegie Mellon University, Pittsburgh, Pennsylvania. Impact of information technologies on organizations; Views on the relative importance of the evolutionary and design perspective of institutional literature; Assessment of the impact of information technologies on accounting and control.
Evaluates the extent to which analytical procedures used by auditors provide correct signals as to the existence of material misstatements under `best case' circumstances. Expectation models; Materiality definitions for error seedlings; Accounting error types.
Presents evidence on the cross-sectional multivariate distribution properties of financial ratios for manufacturing companies. Multivariate outlier detection and transformation methods that can be used to approximate multivariate normality; Analysis of financial ratio data.
Studies the association between changes in consensus of beliefs in the market and changes in the abnormal weekly trading activity surrounding corporate earnings announcement. Effects of changes in abnormal trading volume on the changes in aggregate beliefs; Informational factors affecting trade volume; economic interpretation of an observed trading reaction to an information event.
Previous research suggests that certain benefits may derive from the method used to account for business combinations and may affect how bidding firms structure and classify corporate acquisitions. This paper investigates whether benefits derived from accounting method are reflected in bid premia for target firms. Three estimates of bid premia are examined in 95 stock-for-stock acquisitions, 59 accounted for as poolings, and 36 accounted for as purchases. Sampling restrictions, covariance analysis, and a nonparametric matched pair comparison control for potentially confounding variables identified from prior research on bid premia determinants. The results show an association between acquisition accounting method and bid premia for target firms.
Tests the predictions of a descriptive model of sequential belief revision using content-rich audit scenarios. Characteristics of auditing as a sequential process; Prediction of the model in which an auditor obtains and evaluates evidence; Testing of lack of order effect.
Investigates the role of perceptual differentiation (PD) in the effects of monetary incentives on effort and decision performance. Correlations between the effectiveness of monetary incentive and cognitive skill of the decision maker; Extension of research on the role of PD in decisions made in accounting contexts.
This study investigates the relation between financial analyst earnings forecast revisions and two independent variables: (1) a measure of management earnings forecast news issued prior to analyst revisions, and (2) measures derived from the security market price reaction to that news. Results indicate that security price reactions to management forecasts are useful in predicting subsequent analyst forecast revisions. Furthermore, the explanatory power of price reaction is a function of the timing of the management forecast release.
This paper compares the disclosures firms would seek to make voluntarily with ‘optimal’ mandated disclosures in a single period, multi-firm model, in which there are covariances between firms' cash flows. This comparison is important because, in those circumstances in which the two types of disclosure coincide, it is possible to economize on the process of setting mandatory disclosures. The principal factors which contribute to the existence or absence of a correspondence between mandatory and voluntary disclosures are (1) the nature of the externality associated with a firm's disclosure, (2) the relation between the risk preferences of the shareholders of the firms making the disclosures and outside investors, (3) how much relative weight is placed on existing shareholders and outside investors' preferences in the social welfare function determining the optimal mandatory disclosure policy, and (4) the covariance structure between firms' cash flows.
Illustrates the increased statistical power of contrast coding over the conventional ANOVA on behavioral analysis, when multiple-level factors are involved or when certain types of interactive relationships among factors are hypothesized. Effect on Type I error rates; Limitations of ANOVA; Advantages of contrast coding; Empirical examples; Multi-level factors.