Matching Items (3)
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- All Subjects: Accounting
- All Subjects: Investment analysis--Law and legislation--United States--History--21st century.
- All Subjects: Investor differential reaction
- Creators: Lamoreaux, Phillip T
- Member of: ASU Electronic Theses and Dissertations
- Status: Published
Description
Responding to the allegedly biased research reports issued by large investment banks, the Global Research Analyst Settlement and related regulations went to great lengths to weaken the conflicts of interest faced by investment bank analysts. In this paper, I investigate the effects of these changes on small and large investor confidence and on trading profitability. Specifically, I examine abnormal trading volumes generated by small and large investors in response to security analyst recommendations and the resulting abnormal market returns generated. I find an overall increase in investor confidence in the post-regulation period relative to the pre-regulation period consistent with a reduction in existing conflicts of interest. The change in confidence observed is particularly striking for small traders. I also find that small trader profitability has increased in the post-regulation period relative to the pre-regulation period whereas that for large traders has decreased. These results are consistent with the Securities and Exchange Commission's primary mission to protect small investors and maintain the integrity of the securities markets.
ContributorsDong, Xiaobo (Author) / Mikhail, Michael (Thesis advisor) / Hwang, Yuhchang (Committee member) / Hugon, Artur J (Committee member) / Arizona State University (Publisher)
Created2011
Description
This study investigates the relation between the line of service (audit, tax, advisory) of Big Four office managing partners (OMPs) and both non-audit service fees and audit quality. Given that audit quality has been shown to vary across offices and because changes in office-level leadership can impact the office culture, I examine the impact of the OMP’s line of service on non-audit service fees and audit quality. I find that when an accounting firm office changes leadership to an advisory OMP, non-audit service revenues increase while audit quality suffers. This finding is consistent with advisory partners encouraging an office culture that emphasizes selling non-audit services more than conducting quality audits. Overall, this study provides evidence consistent with regulators’ concerns that the recent trend toward greater advisory services at the largest accounting firms reduces their focus on providing high-quality audits, thereby leading to decreased audit quality.
ContributorsMowchan, Michael (Author) / Kaplan, Steven E (Thesis advisor) / Lamoreaux, Phillip T (Committee member) / Call, Andrew C. (Committee member) / Arizona State University (Publisher)
Created2016
Description
Companies commonly offer temporary price discounts to stimulate product demand. Despite the considerable impact that such promotional strategies have on performance, firms disclose limited information regarding the extent to which they provide discounts. In this study, I evaluate whether market participants understand the implications of current period couponing activity – a special case of price discounts – for future performance. Using a sample of public manufacturers, I use transaction-level data to construct a firm-level measure of couponing activity and find that earnings are less persistent when generated with heavy reliance on couponing. Further, greater couponing in the current quarter increases analyst optimism for future periods, leading to an increased likelihood that the firm misses analyst expectations in the subsequent period (which results in predictably negative earnings announcement returns). Collectively, my findings highlight how market participants’ forecasting and trading decisions can benefit from information regarding price discounting.
ContributorsSnow, Mason C. (Author) / Call, Andrew C (Thesis advisor) / Lamoreaux, Phillip T (Committee member) / White, Roger M (Committee member) / Arizona State University (Publisher)
Created2022