Barrett, The Honors College Thesis/Creative Project Collection
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Barrett accepts high performing, academically engaged undergraduate students and works with them in collaboration with all of the other academic units at Arizona State University. All Barrett students complete a thesis or creative project which is an opportunity to explore an intellectual interest and produce an original piece of scholarly research. The thesis or creative project is supervised and defended in front of a faculty committee. Students are able to engage with professors who are nationally recognized in their fields and committed to working with honors students. Completing a Barrett thesis or creative project is an opportunity for undergraduate honors students to contribute to the ASU academic community in a meaningful way.
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- Creators: School of Accountancy
Description
The International Accounting Standards Board (IASB) is interested in a cost versus benefit analysis of the direct method of cash flow statements. IASB proposed, in the most recent Staff Draft of an Exposure Draft on Financial Statement Presentation in July of 2010, requiring the direct method to be presented, opposed to the current standard which lets companies choose between the direct or indirect method. There is constant controversy between these two presentation styles. Those who report with the indirect method claim the direct method is too costly and has no great benefit. In the United States only approximately two percent of companies report using the direct method, whereas the other ninety-eight percent use the indirect method. However, many preparers, researchers, and other financial statement users see great benefit in the direct method. Multiple research studies have been conducted in this field, and conclude the direct method has substantial and material benefits. There is strong support for the direct method in Australia, where the companies voluntarily report using the direct method. Because firms in Australia voluntarily use the direct method, I conducted a survey for Australian analysts in order to find the benefits (if any) they perceive. I have found that all of the analysts that participated in our survey state the direct method has benefits, is the more beneficial cash flow method to use for their forecasts, and should be required. With this new knowledge of the opinions and experiences of those actually using the direct method reports every day, a more accurate conclusion can be draw about the many benefits the direct method can bestow. These findings ultimately lead to the conclusion that there are added benefits in reporting the direct method, which likely outweigh the costs if Australian companies are continuing to voluntarily present the direct method each year. My major recommendations for the IASB are to require the direct method to be presented, and to require an indirect reconciliation in the notes along with the direct method. The indirect method can be useful when used with the direct method, but the direct method offers greater benefits to those who use them, and therefore should be the required cash flow statement to present. Key Words: Direct method, Cash flow statements
ContributorsArmstrong, Kate Denise (Author) / Orpurt, Steven (Thesis director) / Hillegeist, Stephen (Committee member) / Barrett, The Honors College (Contributor) / Department of Supply Chain Management (Contributor) / School of Accountancy (Contributor)
Created2013-12
Description
Revenue recognition and disclosure in the U.S. has a stark contrast to the reporting standards used by the UK. The U.S. Generally Accepted Accounting Principles (GAAP) follows a more prescriptive approach to determine when revenue should be booked, and how it should be disclosed to investors. Conversely, the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB), is more principle based and open to interpretation. This disparity has created valuation discrepancies for local corporations and individuals seeking to invest abroad, and vice versa. Following the events of Hewlett-Packard Company's (HP) acquisition of Autonomy PLC (Autonomy), the issues that stem from the differences between U.S. GAAP and IFRS reporting standards were magnified. In 2011, HP acquired Autonomy for $11.1 billion. Subsequently, HP declared an $8.8 billion dollar impairment in the following year due to the alleged fraudulent accounting practices of Autonomy's former executives. After 2 years, the investigation on Autonomy's purported accounting improprieties led by the UK's Serious Fraud Office (SFO) was inconclusive. All Big Four CPA firms involved in the acquisition found both HP and Autonomy to be compliant with GAAP and IFRS, respectively. This led to the conclusion that the ostensible fraudulent accounting policies that Autonomy's former executives deployed were in fact legal practices within the confinements of IFRS. The case also unravels greater issues that originate from the disparate accounting standards, as I probe into the reasons behind HP's colossal write-down of their acquired reporting unit, HP Autonomy.
ContributorsLee, Jun Yi (Author) / Orpurt, Steven (Thesis director) / Hillegeist, Stephen (Committee member) / Department of Finance (Contributor) / School of Accountancy (Contributor) / Barrett, The Honors College (Contributor)
Created2015-12
Description
This study explores whether finance students at Arizona State University learn important technical business concepts at a textbook level and, if they do, do they recognize when to use them in real-world scenarios. These questions are important because the ability to learn and adapt knowledge to different situations is a desirable skill for a business professional. I chose NPV as the concept to test because it is arguably the central concept to learn in business school. Additionally, NPV is specifically taught in at least two courses by the time students graduate and it is frequently applied in business. The main hypothesis the study intends to explore is: students that have taken finance 300 will be able to identify the NPV problem. Survey results indicated that only 47% of students could identify the NPV problem. Further results indicated that only 27% of the original 100% (8 out of 30) participants could further apply NPV knowledge. Additional analyses based on grade earned and personal confidence level showed that having higher of either of the attributes generally showed the ability to identify NPV. Based on the results, I propose teaching more application-based learning to enhance career-readiness. Further research, expanding on these results, could be made to formulate a function to predict a student’s ability to identify NPV before being surveyed. This function could then be used to predict the outcome of the next student tested and allow for change to be made in teaching techniques.
ContributorsGomez, Andrew (Author) / Orpurt, Steven (Thesis director) / Hillegeist, Stephen (Committee member) / School of Accountancy (Contributor) / Department of Information Systems (Contributor, Contributor) / Barrett, The Honors College (Contributor)
Created2019-05