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Financial statements are one of the most important, if not the most important, documents for investors. These statements are prepared quarterly and yearly by the company accounting department, and are then audited in detail by a large external accounting firm. Investors use these documents to determine the value of the

Financial statements are one of the most important, if not the most important, documents for investors. These statements are prepared quarterly and yearly by the company accounting department, and are then audited in detail by a large external accounting firm. Investors use these documents to determine the value of the company, and trust that the company was truthful in its statements, and the auditing firm correctly audited the company's financial statements for any mistakes in their books and balances. Mistakes on a company's financial statements can be costly. However, financial fraud on the statements can be outright disastrous. Penalties for accounting fraud can include individual lifetime prison sentences, as well as company fines for billions of dollars. As students in the accounting major, it is our responsibility to ensure that financial statements are accurate and truthful to protect ourselves, other stakeholders, and the companies we work for. This ethics game takes the stories of Enron, WorldCom, and Lehman Brothers and uses them to help students identify financial fraud and how it can be prevented, as well as the consequences behind unethical decisions in financial reporting. The Enron scandal involved CEO Kenneth Lay and his predecessor Jeffery Skilling hiding losses in their financial statements with the help of their auditing firm, Arthur Andersen. Enron collapsed in 2002, and Lay was sentenced to 45 years in prison with his conspirator Skilling sentenced to 24 years in prison. In the WorldCom scandal, CEO Bernard "Bernie" Ebbers booked line costs as capital expenses (overstating WorldCom's assets), and created fraudulent accounts to inflate revenue and WorldCom's profit. Ebbers was sentenced to 25 years in prison and lost his title as WorldCom's Chief Executive Officer. Lehman Brothers took advantage of a loophole in accounting procedure Repo 105, that let the firm hide $50 billion in profits. No one at Lehman Brothers was sentenced to jail since the transaction was technically considered legal, but Lehman was the largest investment bank to fail and the only large financial institution that was not bailed out by the U.S. government.
ContributorsPanikkar, Manoj Madhuraj (Author) / Samuelson, Melissa (Thesis director) / Ahmad, Altaf (Committee member) / Department of Information Systems (Contributor) / School of Accountancy (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05
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Description
Executive compensation is broken into two parts: one fixed and one variable. The fixed component of executive compensation is the annual salary and the variable components are performance-based incentives. Clawback provisions of executive compensation are designed to require executives to return performance-based, variable compensation that was erroneously awarded in the

Executive compensation is broken into two parts: one fixed and one variable. The fixed component of executive compensation is the annual salary and the variable components are performance-based incentives. Clawback provisions of executive compensation are designed to require executives to return performance-based, variable compensation that was erroneously awarded in the year of a misstatement. This research shows the need for the use of a new clawback provision that combines aspects of the two currently in regulation. In our current federal regulation, there are two clawback provisions in play: Section 304 of Sarbanes-Oxley and section 954 of The Dodd\u2014Frank Wall Street Reform and Consumer Protection Act. This paper argues for the use of an optimal clawback provision that combines aspects of both the current SOX provision and the Dodd-Frank provision, by integrating the principles of loss aversion and narcissism. These two factors are important to consider when designing a clawback provision, as it is generally accepted that average individuals are loss averse and executives are becoming increasingly narcissistic. Therefore, when attempting to mitigate the risk of a leader keeping erroneously awarded executive compensation, the decision making factors of narcissism and loss aversion must be taken into account. Additionally, this paper predicts how compensation structures will shift post-implementation. Through a survey analyzing the level of both loss- aversion and narcissism in respondents, the research question justifies the principle that people are loss averse and that a subset of the population show narcissistic tendencies. Both loss aversion and narcissism drove the results to suggest there are benefits to both clawback provisions and that a new provision that combines elements of both is most beneficial in mitigating the risk of executives receiving erroneously awarded compensation. I concluded the most optimal clawback provision is mandatory for all public companies (Dodd-Frank), targets all executives (Dodd-Frank), and requires the recuperation of the entire bonus, not just that which was in excess of what should have been received (SOX).
ContributorsLarscheid, Elizabeth (Author) / Samuelson, Melissa (Thesis director) / Casas-Arce, Pablo (Committee member) / WPC Graduate Programs (Contributor) / School of Accountancy (Contributor) / Barrett, The Honors College (Contributor)
Created2018-12
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Description
Blockchain is a sophisticated and complex technology that will have a massive impact on the public accounting industry. Currently there is concern surrounding how blockchain may impact the industry as a whole. Auditors and accountants are worried that this technology has the potential to replace the responsibilities they fulfill. However,

Blockchain is a sophisticated and complex technology that will have a massive impact on the public accounting industry. Currently there is concern surrounding how blockchain may impact the industry as a whole. Auditors and accountants are worried that this technology has the potential to replace the responsibilities they fulfill. However, blockchain technology will not replace accountants and will enhance their daily activities by eliminating menial tasks, providing increased transparency, and allowing time to be spent in areas that require more consideration. This will change the role of accountants and professionals, requiring them to be more technologically proficient and analytically minded. This paper is organized as follows. There will be an initial explanation of the technology to inform the reader of what blockchain is and how it works. Then there will be a discussion regarding how blockchain technology relates to, and can be utilized by, public accounting firms as well as the implications of blockchain on the public accounting industry. These implications will be discussed followed by why they are extraneous, and how to combat them in both the assurance and advisory practices. In conclusion, recommendations will be provided for public accounting firms on how to effectively utilize the technology to their benefit.
ContributorsLomsdalen, Stephen A (Co-author) / Charen, Stephanie (Co-author) / Samuelson, Melissa (Thesis director) / Garverick, Michael (Committee member) / School of Accountancy (Contributor) / WPC Graduate Programs (Contributor) / Barrett, The Honors College (Contributor)
Created2018-12
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Description
Given its impact on the accounting profession and public corporations, Sarbanes-Oxley Act of 2002(SOX) is a widely researched regulation among accounting scholars. Research typically focuses on the impact it has had on corporations, executives and auditors, however, there is limited research that illustrates the impact SOX may have on average

Given its impact on the accounting profession and public corporations, Sarbanes-Oxley Act of 2002(SOX) is a widely researched regulation among accounting scholars. Research typically focuses on the impact it has had on corporations, executives and auditors, however, there is limited research that illustrates the impact SOX may have on average Americans. There were several US criminal code sections that resulted from the passing of SOX. Statute 1519, which is often referred to as the "anti-shredding provision", penalizes anyone who "knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to" obstruct a current or foreseeable federal investigation. This statute, although intended to punish behavior similar to that which occurred in the early 2000s by corporations and auditors, has been used to charge people beyond its original intent. Several issues with the crafting of the statute cause its broad application and some litigation even reached the Supreme Court due to its vague wording. Not only is the statute being applied beyond the intent, there are other issues that legal scholars have critiqued it for. This statute is far from being the only law facing these issues as the same issues and critiques are found in the 14th amendment. Rewriting the statute seems to be the most effective way to address the concerns of judges, lawyers and defendants regarding the statute. In addition, Congress could have passed this statute outside of SOX to avoid being seen as overreaching if obstruction of justice related to documents was actually an issue outside of corporate fraud.
ContributorsGonzalez, Joana (Author) / Samuelson, Melissa (Thesis director) / Lowe, Jordan (Committee member) / School of Accountancy (Contributor) / Barrett, The Honors College (Contributor)
Created2016-12
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Description
At a time when the national and world community is viewing collegiate business programs as complicit in many recent business scandals rooted in ethical violations and breaches of trust, improving ethics education is a high priority. Review of current research on techniques for effectively teaching ethics highlights the importance of

At a time when the national and world community is viewing collegiate business programs as complicit in many recent business scandals rooted in ethical violations and breaches of trust, improving ethics education is a high priority. Review of current research on techniques for effectively teaching ethics highlights the importance of incorporating conversational learning, decision models, and relevant, personalized case discussions into undergraduate ethics lessons. Focusing exclusively on ethics education in the first-year business seminar WPC 101, we evaluated the current ethics/academic integrity module and found it to be lacking many research-supported techniques. To develop an updated curriculum, we first used the EthicsGame Ethical Lens Inventory in a survey of 114 W. P. Carey students to explore whether a connection between students' majors and primary ethical lenses would demonstrate the effectiveness of designing different, tailored ethics curricula for students in each major. Regression analysis of the survey responses indicated that this research was inconclusive for every major except for Accountancy, which already has a specific (upper-division) ethics course. This initial research stage led to the creation of a universally applicable ethics curriculum based on the Baird Decision Model. Incorporating techniques from the literature review, the new WPC 101 Academic Honesty & Ethics curriculum includes a presentation on the Baird Decision Model, a small-group discussion of a relevant ethical dilemma, and a class role play. The curriculum additionally includes detailed Facilitator Guidelines for educators. The curriculum was piloted in WPC 101 classes during Spring 2016, and we present student and facilitator feedback as well as suggestions for further research and improvement. Use of this research-backed curriculum and further study into its impact on student decision making will allow W. P. Carey to continue advancing in pursuit of training students to be effective ethical leaders.
ContributorsMcClelland, Allison (Co-author) / Mayper, Rebecca (Co-author) / Samuelson, Melissa (Thesis director) / Parker, John (Committee member) / Department of Information Systems (Contributor) / Department of Management (Contributor) / School of Accountancy (Contributor) / WPC Graduate Programs (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05
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Description
The goal of this study was to explore the relationship between locus of control and the influence of an unethical authority figure. This research is a preliminary, exploratory study given research design limits. It was hypothesized that subjects oriented towards internal locus of control are better able to resist pressure

The goal of this study was to explore the relationship between locus of control and the influence of an unethical authority figure. This research is a preliminary, exploratory study given research design limits. It was hypothesized that subjects oriented towards internal locus of control are better able to resist pressure from an unethical authority figure. Subjects oriented towards the powerful others and chance orientations were hypothesized to be less able to resist pressure from an unethical authority figure. The results found that the presence of an unethical authority figure had little to no influence on self-perceived unethical decision-making; the difference in unethical behavior between cases with an authority figure present and without one present was not statistically significant. Further, no support was found for the hypotheses as no statistically significant relationship between locus of control orientations and the difference between the control case and test case was found (R2 = 0.02, model P-value > 0.05). Further analysis confirmed the results of Detert et al. (2008), finding no relationship between survey subjects’ locus of control orientations and unethical decision-making. Additional analysis indicates a relationship between unethical decision-making and gender (B = -5.14, P = 0.03, P < 0.05), providing some interesting avenues for future research.
ContributorsAmorosi, Kaitlin (Author) / Samuelson, Melissa (Thesis director) / Orpurt, Steven (Committee member) / Department of Finance (Contributor) / School of Accountancy (Contributor) / Barrett, The Honors College (Contributor)
Created2020-05