Matching Items (8)
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- All Subjects: Accounting
- All Subjects: Occupational Fraud
- Creators: Reckers, Philip
- Member of: Theses and Dissertations
Description
This study provides new evidence on the choice of performance measures used in dual-class firms to incentivize CEOs. The choice of performance measures is informative about the extent to which the board of directors focuses CEO efforts on firms' long-term versus short-term objectives. To empirically operationalize performance evaluation horizon, I measure the length of the performance evaluation period in CEO stock awards, the use of stock-based measures, and the use of peer-based measures. I collect data on 419 dual-class firms and match them with a control group of single-class firms. I find that market-based metrics are less likely to be used by dual-class firms relative to single-class firms. In addition, I find that peer-based measures are much less common for dual-class than single-class firms. These findings suggest that dual-class firms shield their executives from short-term market pressures and design stock compensation contracts that deemphasize volatile stock prices.
ContributorsLi, Ji (Author) / Matejka, Michal (Thesis advisor) / Hwang, Yuhchang (Committee member) / Reckers, Philip (Committee member) / Arizona State University (Publisher)
Created2014
Description
The main goal of this study was to understand the awareness of small business owners regarding occupational fraud, meaning fraud committed from within an organization. A survey/questionnaire was used to gather insight into the knowledge and perceptions of small business owners, while also obtaining information about the history of fraud and the internal controls within their business. Twenty-four owners of businesses with less than 100 employees participated in the study. The results suggest that small business owners overestimate their knowledge regarding internal controls and occupational fraud, while also underestimating the risk of fraud within their own business. In fact, 92% of participants were not at all familiar with the popular Internal Control \u2014 Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission. The results also show that small business owners tend to overestimate the protection provided by their currently implemented controls in regard to their risk of fraud. Overall, through continued knowledge of internal controls and occupational fraud, business owners can better protect their businesses from the risk of occupational fraud by increasing their awareness of fraud.
ContributorsDennis, Lauren Nicole (Author) / Orpurt, Steven (Thesis director) / Munshi, Perseus (Committee member) / Barrett, The Honors College (Contributor) / Department of Information Systems (Contributor) / School of Accountancy (Contributor)
Created2014-05
Description
Within this paper I summarize the key features, and results, of research conducted to support the development, design, and implementation of an internal control system at a startup small business. These efforts were conducted for an Honors Thesis/Creative Project for Barrett, the Honors College at Arizona State University. The research revolved around deciding which financial policies, procedures, and safeguards could be useful in creating an internal control system for small businesses. In addition to academic research, I developed an “Internal Control Questionnaire” for use as a ‘jumping off point’ in conversations about a business’ existing accounting system. This questionnaire is applicable across many industries, covering the major topics which every small business/startup should consider.
The questionnaire was then used in conjunction with two interviews of small business owners. The interviews covered both the overall financial status of their business and their business’ pre-existing accounting system. The feedback received during these interviews was subsequently used to provide the business owners with eleven recommendations ranging from the implementation of new policies to verification of existing internal controls.
Finally, I summarize my findings, both academic and real-world, conveying that many small business owners do not implement formal internal control systems. I also discuss why the business owners, in this specific circumstance, did not yet implement the aforementioned eleven suggestions.
The questionnaire was then used in conjunction with two interviews of small business owners. The interviews covered both the overall financial status of their business and their business’ pre-existing accounting system. The feedback received during these interviews was subsequently used to provide the business owners with eleven recommendations ranging from the implementation of new policies to verification of existing internal controls.
Finally, I summarize my findings, both academic and real-world, conveying that many small business owners do not implement formal internal control systems. I also discuss why the business owners, in this specific circumstance, did not yet implement the aforementioned eleven suggestions.
ContributorsDuncan, Spencer James (Author) / Garverick, Michael (Thesis director) / Casas Arce, Pablo (Committee member) / School of Accountancy (Contributor) / School of International Letters and Cultures (Contributor) / Barrett, The Honors College (Contributor)
Created2019-05
Description
The relative performance evaluation (RPE) hypothesis holds that executive compensation should not depend on uncontrollable exogenous shocks. Nevertheless, prior studies often find limited empirical support for this hypothesis in part because it is difficult to identify peers exposed to the same exogenous shocks. I propose a new way to identify peers and to test the RPE hypothesis in the context of a specific shock. In particular, I select peers based on the sensitivity of their stock returns to exchange rate fluctuations. I find evidence that firms respond to large exchange rate movements by ex post adjusting their peer selection to include peers with similar exchange rate risk exposure. Moreover, after allowing for ex post peer group adjustments, I find a much stronger support for the RPE hypothesis than most of prior work.
ContributorsChen, Bing (Author) / Matejka, Michal (Thesis advisor) / Casas Arce, Pablo (Committee member) / Kaplan, Steve (Committee member) / Arizona State University (Publisher)
Created2017
Description
Auditors are required to communicate significant risks and audit strategy to the audit committee. However, the effect on perceived auditor liability of auditor disclosures to the audit committee has been ignored for the most part in the accounting literature. In an experiment, I examine how the auditor’s choice to disclose a significant risk to the audit committee affects jurors’ negligence assessments of the auditor. Secondarily, I examine whether assessments of auditor negligence vary with the auditor’s use of a specialist. I find that disclosing a risk to the audit committee reduces jurors’ negligence verdicts against the auditor. However, auditor efforts to improve audit quality through use of a specialist do not differentially affect negligence assessments, individually or interactively with disclosure choices. My results further reveal that there is no reduction of negligence assessments by disclosing risks to the audit committee if jurors do not have a pre-existing favorable view of the auditing profession and do not understand the limitations of an audit. Through mediation analysis, I show that these findings are consistent with expectations derived from psychology research examining responsibility attributions in settings with multiple causative agents, where jurors’ diffuse responsibility away from the auditor and toward the audit committee. My results contribute to practice, addressing one cost/benefit consideration related to disclosures to audit committees and the use of specialists, and to accounting research examining the legal ramifications of disclosing identified audit risks.
ContributorsChambers, Valerie A. (Author) / Reckers, Philip (Thesis advisor) / Lowe, David J. (Committee member) / Maksymov, Eldar (Committee member) / Arizona State University (Publisher)
Created2017
Description
Given that lobbying activity by audit firms constitutes a potential advocacy threat to auditor independence, this paper seeks to provide an economic rationale for audit firm lobbying behavior. Specifically, I examine whether federal lobbying activity by audit firms contributes to their ability to retain existing clients and attract new clients. Consequently, I predict and find that greater lobbying activity is associated with a lower probability of auditor switching behavior as well longer auditor tenure when the client is in an industry with high interest in lobbying. I also find that, when switching audit firms, clients tend to choose audit firms with greater lobbying activity and that companies in industries with high interest in lobbying are more likely to choose an audit firm with greater lobbying activity than their previous auditor.
ContributorsKim, Margaret Hyun-Mee (Author) / Hillegeist, Stephen (Thesis advisor) / Reckers, Philip (Committee member) / Kaplan, Steven (Committee member) / Arizona State University (Publisher)
Created2017
Description
Accounting estimates are developed in a bottom-up fashion; subordinates generate estimates that are reviewed by managers. The anchoring heuristic suggests managers may be highly influenced by subordinates’ initial estimates. However, motivated reasoning theory predicts that reporting incentives will bias managers’ review in favor of estimates that are incentive consistent, and managers will selectively attend to information that supports their preferred conclusion, including their perceptions of the subordinate. Using experimental methods I manipulate the consistency of the subordinate estimate with management reporting incentives, and the narcissistic description of the subordinate. Consistent with motivated reasoning theory, I find that managers anchor on incentive consistent subordinate estimates, regardless of subordinate narcissism, but anchor less on incentive inconsistent subordinate estimates, especially when the estimate comes from a narcissistic subordinate. I also find evidence that managers believe narcissistic subordinates act strategically in their own self-interest, and selectively attend to this belief to adjust away from incentive inconsistent subordinate estimates, but not incentive consistent subordinate estimate. My results reveal two potential weaknesses in the management review process: susceptibility to subordinate anchors, and bias created by reporting incentives.
ContributorsHayes, Matthew J (Author) / Reckers, Philip (Thesis advisor) / Lowe, Jordan (Committee member) / Maksymov, Eldar (Committee member) / Arizona State University (Publisher)
Created2016
Description
Depletion can be a common occurrence in today’s world where a rapid pace is the norm. Depletion is the using of a person’s self-monitoring resources that can erode one’s decision making ability. Depletion affects people in their day-to-day personal and professional lives and can especially be problematic when it compromises career prospects. Professionals, such as doctors, lawyers, and accountants, all make important decisions daily and in pursuit of quality decision-making must exert self-control and avoid impulsive reactions to environmental events. Many studies have been conducted providing evidence of the harmful effects of cognitive depletion; an extensive literature focuses on the medical profession where poor decision-making has life-and-death consequences. This thesis reflects on the effect of depletion on accounting professionals. To that extent, behavioral experiments were conducted using student participants: students that will be future accountants. This study found that accounting students’ performance on a subsequent task was influenced if they had completed a difficult first task. Accountants, along with all professionals, need to be made aware of this circumstance to ensure that those who may be more susceptible to their resources being depleted can find ways to be aware of their self-control levels.
ContributorsBlevins, Megan J (Author) / Clausen, Thomas (Thesis director) / Reckers, Philip (Committee member) / School of Accountancy (Contributor) / Dean, W.P. Carey School of Business (Contributor) / Barrett, The Honors College (Contributor)
Created2019-05