Matching Items (14)
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- All Subjects: Accounting
- Creators: Department of Finance
Description
Existing literature consistently documents a relationship between book-tax differences and future financial performance. Specifically, large book-tax differences are associated with lower earnings persistence. I contend that one reason the tax information contained in financial statements is informative about future earnings is that the relationship between book income and taxable income captures information about a firm's life cycle stage. Using a life cycle measure from the literature, I use fundamental analysis to group firm-year observations into life cycle stages and document a link between book-tax differences and firm life cycle. I build on prior studies that find a relation between earnings persistence and book-tax differences, and earnings persistence and firm life cycle. I find that after controlling for firm life cycle stage, the association between large positive book-tax differences and lower earnings persistence does not hold. My results offer an economic theory based explanation for the relation between book-tax differences and earnings persistence as an alternative explanation to findings in prior research.
ContributorsDrake, Katharine D (Author) / Mikhail, Michael (Thesis advisor) / Brown, Jennifer (Committee member) / Martin, Melissa (Committee member) / Arizona State University (Publisher)
Created2012
Description
This paper examines whether CEOs with general managerial skills are better at achieving the goals of external communication. Using the General Ability Index developed by Custodio, Ferreira, and Matos (2013) to measure CEOs' general managerial skills, I find that firms with generalist CEOs are more likely to obtain the desired outcomes of communication, including the smaller difference between analyst forecasts and management guidance, less dispersion in analyst forecasts, higher analyst following, and higher institutional ownership, after controlling for CEO talent and the impact of Regulation FD. Moreover, I provide direct evidence that general managerial skills are more important to external communication under poor information environments. I also investigate the characteristics of analysts who follow firms with generalists, and my findings suggest the private interaction with analysts is an important communication channel for generalists. Finally, I find that generalists are able to attract dedicated investors and gain long-term capital for their firms. Overall, I provide evidence on the growing importance of general managerial skills in external communication. This paper offers new insights into why CEOs with general skills are paid at a premium over those with specific skills, as documented in previous studies.
ContributorsYeh, Eugenia (Author) / Hillegeist, Steve (Thesis advisor) / Brown, Jennifer (Committee member) / Custodio, Claudia (Committee member) / Arizona State University (Publisher)
Created2015
Description
U.S. based multinational firms are able to use foreign subsidiaries as a means to reduce their overall tax burden. As disclosure requirements are vague, there is very little useful information provided to firm outsiders to analyze a firm’s foreign operations activity and earnings. I demonstrate that even sophisticated financial statement users, financial analysts, have difficulty predicting the effective tax rate for firms with foreign operations, as evidenced by increased forecast errors for multinational firms as compared to domestic firms. I examine factors that may contribute to the increased difficulty of forecasting for multinationals and find that decreased ETR persistence and the presence of a loss may affect the difficulty of the forecasting task, but the presence or quality of management forecasts may not. The market finds tax forecasts important as evidenced by the positive response to the tax and non-tax components of earnings forecasts. This evidence is useful to investors, policy makers, and others interested in the tax activities of multinational firms.
ContributorsJordan, Erin (Author) / Brown, Jennifer (Thesis advisor) / Hugon, Artur (Committee member) / Huston, Ryan (Committee member) / Arizona State University (Publisher)
Created2018
Description
Company X is one of the world's largest manufacturer of semiconductors. The company relies on various suppliers in the U.S. and around the globe for its manufacturing process. The financial health of these suppliers is vital to the continuation of Company X's business without any material interruption. Therefore, it is in Company X's interest to monitor its supplier's financial performance. Company X has a supplier financial health model currently in use. Having been developed prior to watershed events like the Great Recession, the current model may not reflect the significant changes in the economic environment due to these events. Company X wants to know if there is a more accurate model for evaluating supplier health that better indicates business risk. The scope of this project will be limited to a sample of 24 suppliers representative of Company X's supplier base that are public companies. While Company X's suppliers consist of both private and public companies, the used of exclusively public companies ensures that we will have sufficient and appropriate data for the necessary analysis. The goal of this project is to discover if there is a more accurate model for evaluating the financial health of publicly traded suppliers that better indicates business risk. Analyzing this problem will require a comprehensive understanding of various financial health models available and their components. The team will study best practice and academia. This comprehension will allow us to customize a model by incorporating metrics that allows greater accuracy in evaluating supplier financial health in accordance with Company X's values.
ContributorsLi, Tong (Co-author) / Gonzalez, Alexandra (Co-author) / Park, Zoon Beom (Co-author) / Vogelsang, Meridith (Co-author) / Simonson, Mark (Thesis director) / Hertzel, Mike (Committee member) / Department of Finance (Contributor) / Department of Information Systems (Contributor) / School of Accountancy (Contributor) / WPC Graduate Programs (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05
Description
In A Comparative Analysis of Indoor and Greenhouse Cannabis Cultivation Systems, the two most common systems for commercial cannabis cultivation are compared using an operational and capital expenditure model combined with a collection of relevant industry sources to ascertain conclusions about the two systems' relative competitiveness. The cannabis industry is one of the fastest growing nascent industries in the United States, and, as it evolves into a mature market, it will require more sophisticated considerations of resource deployment in order to maximize efficiency and maintain competitive advantage. Through drawing on leading assumptions by industry experts, we constructed a model of each system to demonstrate the dynamics of typical capital deployment and cost flow in each system. The systems are remarkably similar in many respects, with notable reductions in construction costs, electrical costs, and debt servicing for greenhouses. Although the differences are somewhat particular, they make up a large portion of the total costs and capital expenditures, causing a marked separation between the two systems in their attractiveness to operators. Besides financial efficiency, we examined quality control, security, and historical norms as relevant considerations for cannabis decision makers, using industry sources to reach conclusions about the validity of each of these concerns as a reason for resistance to implementation of greenhouse systems. In our opinion, these points of contention will become less pertinent with the technological and legislative changes surrounding market maturation. When taking into account the total mix of information, we conclude that the greenhouse system is positioned to become the preeminent method of production for future commercial cannabis cultivators.
ContributorsShouse, Corbin (Co-author) / Nichols, Nathaniel (Co-author) / Swenson, Dan (Thesis director) / Cassidy, Nancy (Committee member) / Feltham, Joe (Committee member) / School of Accountancy (Contributor) / Department of Finance (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05
Description
This research project examines the craft brewing industry and its position in the North American market. Specifically, this research will highlight the most important aspects of the product market, cost structure, market trends, as well as an assessment of the viability of several modes of entry. The data and analysis provided indicates that the industry is promising and poised to grow in comparison to many other sectors within the alcoholic beverages industry, as demand for differentiated craft beer products is relatively strong. The continued existence of craft brewing would not be made possible without the devotion and dedication of individuals simply interested in brewing recipes at home. Although the process of brewing remains relatively traditional, the paper will discuss the possibilities to diversify as a successful craft brewing brand due to consumers' willingness and curiosity to try new beverages. Production details and supply chain processes will be discussed to fully understand the fruitful beginnings of a local brewer to a large scale company that distributes nationwide. Nonetheless, prominent risks include extensive regulatory hurdles ranging from local to federal levels and threats from significant established competitors. These competitors and their business activities will be heavily discussed as it pertains to the question of whether entering the market is a smart business decision. The purpose of this research is to provide potential business owners and investors the strength and knowledge to engage in the craft brewing industry. In essence, the business decision to participate in the craft brewing industry is met with encouragement from an avid consumer base, collaboration with competitors, and an undying passion to brew quality beer for consumption.
ContributorsKnapp, Kurt (Co-author) / Wu, Katherine (Co-author) / Nguyen, Kelley (Co-author) / Budolfson, Arthur (Thesis director) / Bhattacharya, Anand (Committee member) / Department of Finance (Contributor) / Department of Economics (Contributor) / Department of Supply Chain Management (Contributor) / School of Mathematical and Statistical Sciences (Contributor) / School of Accountancy (Contributor) / Hugh Downs School of Human Communication (Contributor) / Barrett, The Honors College (Contributor)
Created2016-12
Description
The competitive nature of business requires managers to consistently work towards eliminating unnecessary costs and improving financial management. Worldwide, fraud remains a pervasive and expensive problem for businesses. Fraud involving misappropriation of assets (commonly referred to as embezzlement) and fraudulent financial reporting cost organizations trillions of dollars worldwide. To better understand the most effective ways of combating misappropriation and to a lesser extent, fraudulent financial reporting, this paper evaluates research and reports the results of expert interviews with accountants, forensic experts, and security specialists.
ContributorsMurnane, George (Author) / Munshi, Perseus (Thesis director) / Pany, Kurt (Committee member) / School of Accountancy (Contributor) / WPC Graduate Programs (Contributor) / Department of Finance (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05
Description
I was interested to see if there were any statistically significant differences in political ideology between Master's of Accountancy students (MACC) and Master's of Taxation students (MTax) at Arizona State University. I hypothesized that the MACC students would tend to be more liberal or less conservative than the MTax students, while the MTax students would tend to be more conservative or less liberal than the MACC students. Scholars have found ways that conservatives and liberals differ, including differences in personality traits of conscientiousness and openness, as well as the types of careers they are drawn to. Scholars have also performed personality tests on accountants, accounting students, and accounting faculty to show how they differ. I distributed a voluntary online survey to students to discern their political beliefs. Most of the questions I asked did not reveal any statistically significant differences between students from the two programs, but the questions that did reveal some statistically significant differences showed that MACC students were more likely to be liberal or less conservative on certain issues, while the opposite was true for the MTax students. The statistically significant differences tended to appear for questions related to social policy rather than economic policy. This finding supports previous studies that show how social policy tends to be more divisive than economic policy.
ContributorsAnderson, Brett Patrick (Author) / Lewis, Paul (Thesis director) / Lowe, D. Jordan (Committee member) / Department of Finance (Contributor) / School of Accountancy (Contributor) / Barrett, The Honors College (Contributor)
Created2015-12
Description
Generating an astounding $110.7 billion annually in domestic revenue alone [1], the world of accounting is one deceptively lacking automation of its most business-critical processes. While accounting tools do exist for the common person, especially when it is time to pay their taxes, such innovations scarcely exist for many larger industrial tasks. Exceedingly common business events, such as Business Combinations, are surprisingly manual tasks despite their $1.1 trillion valuation in 2020 [2]. This work presents the twin accounting solutions TurboGAAP and TurboIFRS: an unprecedented leap into these murky waters in an attempt to automate and streamline these gigantic accounting tasks once entrusted only to teams of experienced accountants.
A first-to-market approach to a trillion-dollar problem, TurboGAAP and TurboIFRS are the answers for years of demands from the accounting sector that established corporations have never solved.
ContributorsPreston, Michael Ernest (Co-author) / Capuano, Bailey (Co-author) / Kuhler, Madison (Co-author) / Chen, Yinong (Thesis director) / Hunt, Neil (Committee member) / Computer Science and Engineering Program (Contributor) / Barrett, The Honors College (Contributor)
Created2021-05
Description
The PPP Loan Program was created by the CARES Act and carried out by the Small Business Administration (SBA) to provide support to small businesses in maintaining their payroll during the Coronavirus pandemic. This program was approved for $350 billion, but this amount was expanded by an additional $320 billion to meet the demand by struggling businesses, since initial funding was exhausted under two weeks.<br/><br/>Significant controversy surrounds the program. In December 2020, the Department of Justice reported 90 individuals were charged for fraudulent use of funds, totaling $250 million. The loans, which were intended for small business, were actually approved for 450 public companies. Furthermore, the methods of approval are<br/>shrouded in mystery. In an effort to be transparent, the SBA has released information about loan recipients. Conveniently, the SBA has released information of all recipients. Detailed information was released for 661,218 recipients who have received a PPP loan in excess of $150,000. These recipients are the central point of this research.<br/><br/>This research sought to answer two primary questions: how did the SBA determine which loans, and therefore which industries are approved, and did the industries most affected by the pandemic receive the most in PPP loans, as intended by Congress? It was determined that, generally, PPP Loans were approved on the basis of employment percentages relative to the individual state. Furthermore, in general, the loans approved were approved fairly, with respect to the size of the industry. The loans, when adjusted for GDP and Employment factors, yielded a clear ranking that prioritized vulnerable industries first.<br/><br/>However, significant questions remain. The effectiveness of the PPP has been hindered by unclear incentives and negative outcomes, characterized by a government program that has essentially been rushed into service. Furthermore, limitations of available data to regress and compare the SBA's approved loans are not representative of small business.
ContributorsMaglanoc, Julian (Author) / Kenchington, David (Thesis director) / Cassidy, Nancy (Committee member) / Department of Finance (Contributor) / Dean, W.P. Carey School of Business (Contributor) / School of Accountancy (Contributor) / Barrett, The Honors College (Contributor)
Created2021-05