Prior research generally concludes that compensation committees completely shield executive compensation from the effect of restructuring charges on earnings. In contrast, we find that after controlling for the growth in annual inflation-adjusted CEO cash compensation, compensation committees only partially shield CEO compensation from the adverse effect of restructuring charges on earnings, on average. In further analyses, we identify factors associated with cross-sectional differences in the extent of shielding. Specifically, we find that compensation committees appear to: (1) completely shield initial and subsequent restructuring charges for CEOs with long tenure, provided that the firm had not recorded a charge in the two immediately prior years; (2) provide no shielding of subsequent restructuring charges taken by short-tenured CEOs if the firm reported a prior restructuring charge within two years of the current charge; (3) and partially shield the other categories of restructuring charges. Overall, this study provides evidence that compensation committees evaluate the context of each restructuring in determining the extent to which they will intervene to shield executive compensation from the effect of these charges.

I. Introduction, 688. — II. Restraints on the portfolio-management incentive for gold conversion, 689. — III. The adjustment-signaling incentive for gold conversion, 692. — IV. Summary and conclusions, 694.

Leaders in the accounting profession have cited the need for accountants to be able to function professionally in a complex and changing environment. The literature of cognitive development suggests that such individuals must possess a high level of cognitive complexity, and the literature on personality types shows that people self-select into professions partially as a result of their perceptions of the professional stereotype. Since the introductory and intermediate accounting courses may profoundly influence students' perceptions and their career choice, the courses should be designed so as to attract those more cognitively complex individuals whom the profession needs. This study analyzes the relative performance of introductory accounting students with high and low levels of cognitive complexity on structured versus unstructured course materials. Students at all levels of cognitive complexity performed equally well on highly structured accounting examination questions, but students with high levels of cognitive complexity performed significantly better on unstructured case materials. The implication of the results is that if accounting educators wish to attract students who can function in a complex and changing environment, the introductory accounting course should include unstructured course materials.

Reviews the book "Accounting Principles," by Ronald J. Thacker.

The article reviews the book "Generally Accepted Accounting Practice: A South African Viewpoint," by G. K. Everingham and B. D. Hopkins.

The article reviews the book "Contemporary Auditing," by Larry P. Bailey.

Reviews the book "Auditing Standards and Procedures," by James B. Hobbs and Carl L. Moore.

In 1961, William Vickrey showed that, in an independent private-values context with symmetric risk-neutral bidders, sealed second-price auctions have dominant truth-revealing equilibrium strategies; are perfectly efficient economically; and produce the same expected revenue for bid takers as equilibrium strategies in oral progressive auctions, Dutch auctions, or standard, first-price sealed bidding. Yet sealed second-price auctions seldom occur. The authors argue that fear of cheating and especially disincentives for bidders to follow truth-revealing strategies are important explanations. They model auctions in which third parties capture a fraction of the economic rent revealed by the second-price procedure.

In 1961, Vickrey showed that, in an independent private-values context with symmetric risk-neutral bidders, sealed second-price auctions have dominant truth-revealing equilibrium strategies, that they are perfectly efficient economically, and that they produce the same expected revenue for bid takers as equilibrium strategies in oral progressive auctions, Dutch auctions, or standard, first-price sealed bidding. Yet sealed second-price auctions seldom occur. We argue that fear of cheating and especially disincentives for bidders to follow truth-revealing strategies are important explanations. We model auctions in which third parties capture a fraction of the economic rent revealed by the second-price procedure.

This paper examines the admissibility of monetary aggregate groupings for the US over 1993–2001, based upon weak separability. We investigate the impact of retail and commercial demand deposit sweep programs on the separability of monetary asset groupings. Weak separability is tested using the Swofford–Whitney and Fleissig–Whitney tests. We use Varian's measurement error adjustment procedure to eliminate violations of the Generalized Axiom of Revealed Preference (GARP). When funds from both retail and commercial demand deposit sweep programs are placed within checkable deposits, all groupings, narrow and broad, pass GARP and weak separability. For groupings based on conventional money measures, tests tend to favor broad aggregates.