Matching Items (8)
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- All Subjects: Accounting
- All Subjects: SOX
- Creators: Rykaczewski, Maria
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 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
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
Recent research finds that there is significant variation in stock market participation by state and suggests that there might be state-specific factors that determine household stock market participation in the United States. Using household survey data, I examine how accounting quality of public companies at the state level affects households’ stock market participation decisions. I find that households residing in states where local public companies have better accounting quality are more likely to invest in stocks. Moreover, those households invest greater amounts of their wealth in the stock market. Cross-sectional tests find that the effect of accounting quality on stock market participation is more pronounced for less affluent and less educated households, consistent with prior findings that lacking familiarity with and trust in the stock market is an important factor deterring those types of households from stock investments. In state-level tests, I find that these household outcomes affect income inequality, which is less severe in states where high public-firm accounting quality spurs more stock market participation by poorer households. Conversely, in states where public firms have lower accounting quality, stock market participation among poorer households is less common, and a larger share of high equity returns accrues to richer households, exacerbating income inequality.
ContributorsKim, Min (Author) / Huang, Xiaochuan (Thesis advisor) / Rykaczewski, Maria (Committee member) / White, Roger (Committee member) / Arizona State University (Publisher)
Created2020
Description
This study examines how short selling threats affect firms’ non-generally accepted accounting principles (non-GAAP) reporting quality. From 2005 to 2007, the SEC implemented a Pilot Program under Regulation SHO, in which one-third of the Russell 3000 index stocks were randomly chosen as pilot stocks and exempted from short-sale price tests. As a result, short selling threats increased considerably for pilot stocks. Using difference-in-differences tests, I find that pilot firms respond to the increased short selling threats by reducing the use of low-quality non-GAAP exclusions, resulting in an improvement in the quality of overall non-GAAP exclusions. Further tests show that this effect of short selling threats is more pronounced for smaller firms, firms with lower institutional ownership, firms with lower analyst coverage, and firms with lower ratios of fundamental value to market value. These findings suggest short sellers play an important monitoring role in disciplining managers, as evidenced by the non-GAAP reporting choices of managers.
ContributorsLiu, Junjun (Author) / Faurel, Lucile (Thesis advisor) / Li, Yinghua (Committee member) / Rykaczewski, Maria (Committee member) / Arizona State University (Publisher)
Created2020
Description
The goal of this study is to assess differences that still exist in International Financial Reporting Standards based financial statements between otherwise similar firms. We undertake this study because one primary goal of IFRS is to enhance comparability of financial statements world-wide, but it is unclear to what extent that has happened. First, we assess whether different countries adopt different versions of IFRS. We find, adopting countries fully adopt IFRS with only minor alterations to IFRS as promulgated by the International Accounting Standards Board. We then test whether otherwise similar firms, but from different countries, interpret IFRS differently. IFRS is a principles-based set of accounting standards, and thus offers a wide array of options for companies to choose from in their reporting. The latitude of options in reporting inherently creates room for differences when firms interpret IFRS for their own financial statements. Building on prior studies (e.g., Ball (2016), Nobes (2011)), we find that historical country GAAP is influential, and in documented instances constrains comparability of otherwise similar firms located in different IFRS adopting countries. Based on our findings, we then offer suggestions to preparers and users of these financial statements, and the IASB, to address financial statement comparability issues (see appendix C).
ContributorsWalker, Brooke (Co-author) / Espinosa Jenkins, Lucas (Co-author) / Orpurt, Steven (Thesis director) / Rykaczewski, Maria (Committee member) / School of Accountancy (Contributor) / Department of Economics (Contributor) / Barrett, The Honors College (Contributor)
Created2020-05
Description
This paper consists of a literature review, wherein four papers surrounding Motivation Crowding Theory (MCT) were read and analyzed. The paper then goes into an analysis of a survey I conducted. The survey consisted of three main questions with three sub-questions for each, and all attempted to find a "limit" to MCT. However, results for the survey were ultimately inconclusive. The paper concludes with lessons learned in conducting research and surveys in particular, as well as a nod to the relevancy of MCT in business and personal applications.
ContributorsSmith, Mallory Anne (Author) / Reckers, Phil (Thesis director) / Samuelson, Melissa (Committee member) / Lowe, Jordan (Committee member) / School of Accountancy (Contributor) / Department of Information Systems (Contributor) / WPC Graduate Programs (Contributor) / Barrett, The Honors College (Contributor)
Created2020-05
Description
This thesis seeks to examine a nascent topic pertinent to the future of investment reporting to participants in global capital markets: cryptocurrency reporting. In the age of investor freedom, low to zero brokerage fees, and digital ‘do-it-yourself’ investing, many investors and investing platforms have adopted the use of digital currencies. Since its inception in 2009, cryptocurrency has been surrounded by controversy, which impacted financial institutions holding it, companies using it in transactions, and investors trading it. With cryptocurrency’s inherent volatility and relatively little accounting guidance, these stakeholders have faced difficulty in making capital allocation decisions, properly recording their holdings and transactions, and learning how to engage in activities involving cryptocurrency. Moreover, cryptocurrency has caught the attention of market regulators due to these same factors.
Our project directly addresses this topic and explores the accounting implications of using cryptocurrency based on currently available authoritative and non-authoritative guidance. We further examine the need for authoritative reporting guidance, the regulatory bodies responsible for prescribing reporting guidance, and potential recommendations for future accounting standards. We begin by defining cryptocurrency and distinguishing it from other digital assets in Section 2. In Section 3, we discuss the risks presented by digital currencies and their inherent volatility. In Section 4, we describe the ways in which businesses currently use, treat, and interact with cryptocurrency from both transactional and accounting perspectives. In Section 5, we review, consolidate, and present the current guidance on digital currencies from the Big 4 accounting firms. In Section 6, we investigate the cryptocurrency disclosures of five large public US companies through an analysis of their annual reports. In Section 7, we research the FASB and SEC and their standard-setting processes to determine which organization is best suited to provide guidance on cryptocurrency reporting. As part of this task, we consider the role of these two regulatory agencies, their views and attitudes toward cryptocurrencies, and their jurisdictions over this area of financial reporting. This examination involves regulatory and public policy research, to understand the standard-setting process within the applicable regulatory body. Finally, in Section 8, we directly engage in the standard-setting process by drafting a comment letter to the FASB which includes the results of our research, the necessity (or lack thereof) for authoritative reporting guidance, and key issues that the Board should consider.
ContributorsCady, Kendall (Author) / Hayward, David (Co-author) / Rykaczewski, Maria (Thesis director) / Golden, Russell (Committee member) / Barrett, The Honors College (Contributor) / Department of Finance (Contributor) / School of Accountancy (Contributor)
Created2022-05
Description
This thesis seeks to examine a nascent topic pertinent to the future of investment reporting to participants in global capital markets: cryptocurrency reporting. In the age of investor freedom, low to zero brokerage fees, and digital ‘do-it-yourself’ investing, many investors and investing platforms have adopted the use of digital currencies. Since its inception in 2009, cryptocurrency has been surrounded by controversy, which impacted financial institutions holding it, companies using it in transactions, and investors trading it. With cryptocurrency’s inherent volatility and relatively little accounting guidance, these stakeholders have faced difficulty in making capital allocation decisions, properly recording their holdings and transactions, and learning how to engage in activities involving cryptocurrency. Moreover, cryptocurrency has caught the attention of market regulators due to these same factors.
Our project directly addresses this topic and explores the accounting implications of using cryptocurrency based on currently available authoritative and non-authoritative guidance. We further examine the need for authoritative reporting guidance, the regulatory bodies responsible for prescribing reporting guidance, and potential recommendations for future accounting standards. We begin by defining cryptocurrency and distinguishing it from other digital assets in Section 2. In Section 3, we discuss the risks presented by digital currencies and their inherent volatility. In Section 4, we describe the ways in which businesses currently use, treat, and interact with cryptocurrency from both transactional and accounting perspectives. In Section 5, we review, consolidate, and present the current guidance on digital currencies from the Big 4 accounting firms. In Section 6, we investigate the cryptocurrency disclosures of five large public US companies through an analysis of their annual reports. In Section 7, we research the FASB and SEC and their standard-setting processes to determine which organization is best suited to provide guidance on cryptocurrency reporting. As part of this task, we consider the role of these two regulatory agencies, their views and attitudes toward cryptocurrencies, and their jurisdictions over this area of financial reporting. This examination involves regulatory and public policy research, to understand the standard-setting process within the applicable regulatory body. Finally, in Section 8, we directly engage in the standard-setting process by drafting a comment letter to the FASB which includes the results of our research, the necessity (or lack thereof) for authoritative reporting guidance, and key issues that the Board should consider.
ContributorsHayward, David (Author) / Cady, Kendall (Co-author) / Rykaczewski, Maria (Thesis director) / Golden, Russell (Committee member) / Barrett, The Honors College (Contributor) / Dean, W.P. Carey School of Business (Contributor) / School of Accountancy (Contributor)
Created2022-05