Allied Academies International Conference. Academy of Accounting and Financial Studies. Proceedings

News

Cpas' Political Ideology and Rule-Based Moral Reasoning

CPAs have been shown to exhibit a tendency to exercise rule-based moral reasoning when faced with resolving an ethical dilemma. Based on coupling the results of the prior subject research, the present study addressed the relationship of CPAs' rule-oriented moral reasoning to their political ideology to determine if perhaps an alternative explanation to Lampe and Finn's as to why CPAs tend to be rule-oriented in their moral reasoning may be found in the CPA's political ideology. The results of...

Corporate Social and Financial Performance: A Canonical Correlation Analysis

A major stream of research has resulted from efforts to understand the relationship between social performance and financial performance that exists for corporations. Can a company do well by doing good? Using canonical correlation, the results of this study indicate a strong relationship between a company's social performance and its financial performance. Further, this association differs across industries. In examining social performance, both strengths and concerns are important and shoul...

Ethical Predisposition of Certified Public Accountants: A Large-Scale Study of Gender Differences

Using a large sample of 304 CPAs, this paper investigates gender differences in moral development and personal value preferences of CPAs. We used the Defining Issues Test (DIT) to measure moral development, the Rokeach (1973) Value Survey (RVS) to determine value preferences, and the Musser and Orke (1992) typology to determine value type preferences. The typology analysis indicates that all CPAs in our sample prefer personal values to social values. However, while males prefer competence val...

Discharging Taxes in Bankruptcy

This paper focuses on the use of bankruptcy when Federal tax liabilities are the sole or primary consideration. The tax related implications and rules for using Chapters 7, 11 or 13 bankruptcy protections are reviewed. In addition, the mechanical rules that must be followed to discharge individual income tax liabilities and the rules regarding the discharge of employment taxes are discussed. A final section on tax planning includes 14 specific planning ideas.

Twenty-Four Seven Accounting

While technology has very noticeably affected our daily lives in major ways, the overall impacts of technology on accounting are not as apparent and have not occurred as rapidly. However, current developments in technology have created the ability to issue financial statements that include transactions that occurred within the most recent hours or even minutes. CPAs in public practice, accountants in industry, non-profit organizations and governments, financial managers of all types, and othe...

A Cross Sectional Study of Financial Measures in Predicting Stocks' Riskiness During Year 2008 Crash Period

The study tests the use of financial measures in predicting stocks' riskiness during 2008 crash period. The stock market witnessed a number of crashes with the most recent one in year 2008. Crashes cause instability in the stock market and a collapse of investor confidence. In a study, Bahhouth and Maysami (2009) showed evidence that Beta had a marginal effect in predicting stocks riskiness. The paper explores the ability of using financial ratios to identify stocks' riskiness (i.e. stocks th...

Internal Customer Service in Accounting Departments

Regardless of whether the customer service area of accounting is communicating with board members, management, coworkers, vendors, creditors, government agencies or even the final consumer, good customer service should prevail. These customers of the accounting department have predetermined ideas regarding the treatment they expect from accounting customer services. These expectations include a staff of competent individuals that exhibit a willingness to understand and the ability to listen t...

Implementation of Portfolio Diversification Methodology in the Asean Countries

In this paper, we implement a portfolio diversification methodology based on partial-correlation proposed by Choudhury and Naidu (2009). Their approach utilizes market relationship that is independent of world market influence. In this paper, portfolios are constructed using both partial-correlation approach and Markowitz (or correlation) approach in the ASEAN countries for two different home markets, namely Japan and Singapore. Three different strategies were explored to measure performances...

Seasonality in Index Membership When the Index Shows None

Seasons such as the "January effect" or the "turn-of-the-week" effect have had significant study since the early 1980s. Extant research tends to rely on index returns observations and finds the markets have become generally efficient with respect to calendar periods of trading. This research examines the Dow Jones Industrial Average returns and trading volume for seasonalities as well as the returns and trading volumes of the individual members of the index. We find that while the overall ind...

Financial Reporting of Small Cities

Prior studies that have investigated the disclosure compliance issue in the public sector have focused on municipalities with populations greater than 25,000. Consequently, public sector accounting literature is void of any empirical evidence regarding determinants of disclosure compliance by small municipalities. This paper extends prior research by investigating and comparing financial reporting of small (population less than 25,000) and large (population greater than 25,000) cities.

Martingales, Efficient Market Hypothesis and Kolmogorov's Complexity Theory: A Note

Empirical observations have challenged the stricter form of the efficient market hypothesis. These empirical observations and theoretical considerations show that price changes are difficult to predict if one starts from the time series of price changes. But the 'fair game' description of price change in terms of martingale is rather formal. This brief note provides a new direction or explanation - in terms of Algorithmic complexity theory of Kolmogorov that makes a clearer connection between...

Contributing Success Factors Within the Financial Planning Profession: Inside Financial Planner Perceptions

Financial planner perceptions are made up of a complex neural blend of client management qualities, client demographic qualities, personal qualities, business practice qualities, and job qualities. This study empirically assesses perceptions of the financial planning professional to find those factors seen to be most important and least important contributing to financial planner self reported success. The data utilized within this study were gathered via a survey instrument developed and adm...

Corporate Governance in the Limelight - Again: Do We Need Global Standards?

This paper investigates whether the existing corporate governance structures in different countries are performing well. Second, given increasing integration of world economies, the paper also addresses the question of whether we need global standards for corporate governance to prevent or minimize the recurrence of recent events.

Pre-Operating Performances and Ipos After Market Returns

This study examines IPOs' initial underpricing, price momentum in the short run, and long run market performances via their pre-IPO operating performances. Variables like years existing before IPO, offer size, pre-IPO operating performances, and sales growth rate are chosen as the proxies to measure firms' ex-ante uncertainty. Empirical tests are thus conducted in these three stages: first trading day, 6 months and 36 months after issuing. The high initial returns are explainable by investors...

The Relationship Between Profitability and the Level of Compliance to the International Financial Reporting Standards (Ifrs) of Telecommunication Industry in the Philippines

This paper is to empirically identify the magnitude of financial disclosures by Philippine companies particularly those that belong to Telecommunication Industry, investigates whether Philippines publicly listed corporations comply with International Financial Reporting Standard, aims to develop strategy to which maximum compliance with IFRS and study the determinants affecting the level of compliance among publicly listed corporations in the Philippines for the year 2008. Ergo, the financial...

Are Companies That Report Material Weaknesses in Internal Control More Likely to Restate Their Financial Statements?

This study provides empirical evidence on the relationship between reported material weaknesses in internal control and the probability of a company restating its earnings, based on a sample of 518 restating companies and 518 matching companies selected from the period January 1, 2004 through December 31, 2005. First, this study finds a significant relationship between the incidence of material weaknesses reported by the firm and the probability of a firm restating its earnings. Second, the m...

Alternative Assets: Reported Versus Realized Returns

Alternative asset funds often are in the process of marketing a new fund during the lifetime of an existing fund. The marketing materials for the new fund include the interim results of the existing fund, which are self-reported. Thus the possibility exists of there being an incentive to overstate those interim rates of return. This study employs actual data on contributions, distributions, and reported rates of return for a sample of alternative asset funds. We formally test whether there is...

Monthly Seasonality in U.S. Long Term Corporate Bonds

We explore monthly seasonality in high grade long term corporate bonds from January 1926 to December 2008. We test three types of month effects. In addition, we analyze the data based on Republican and Democratic presidencies. The mean of monthly total returns for the entire data set (0.50%) is significantly greater than zero. The mean return of January is significantly higher than the mean of the other eleven months stacked together; the mean of March is significantly lower. We find signific...

Seasonality in U.S. Stock Indexes: Efficient Markets in Trading Returns and Volume?

Research in seasonalities in stock returns (January effect, day-of-the-week effect and so forth) generally showed a disappearance by the end of the last century. The presumption has been that the stock markets, at least the major ones, are efficient with respect to timing of trades. This research finds differently. First, while the main indexes tend to not show seasons of higher or lower returns, there are still some seasons remaining as found in the period of 2001 through 2008. Second, often...

Financing New Business Ventures: Accounting & Finance Concerns in Customer Service Management

This paper is written to explore the many aspects of financing new business ventures and projects in customer service management organizations. New business financing can take many forms at different stages. The stages of a new business venture can include research and development, demonstration, early commercialization, and demand-driven commercialization. The various financial instruments that help ventures through these stages include Government finance, International funding Mechanisms, P...

Evidence On the Association Between Major and Performance in the Introductory Financial Accounting Course

This study investigates the differences in student performance in the introductory financial accounting course across various combinations of majors. The study utilizes the Kruskal-Wallis test and discriminant analysis in conducting empirical tests. The results suggest that, relative to students of other majors, the accounting majors are more likely to have higher grades in the introductory financial accounting course. A closer examination reveals that the accounting and finance majors share ...

Evidence From an Auditing Course: Performance and Student Use of Instructional Technology

This paper provides a descriptive analysis of the impact of instructional technology on student activities on Blackboard Vista in a face-to-face auditing course. To supplement the lectures in the classroom, the instructor utilizes the web-based instructional tools and encourages students to use the technological aids on a voluntary basis. Further analysis is conducted on the dataset containing student performance statistics and student activity data gathered from the Blackboard Vista, a platf...

Reviewing Abc for Effective Managerial and Financial Accounting Decision Making in Corporate Entities

The traditional product-costing system failed to show that the low-volume products were driving more than their share of overhead costs. As a result of these misleading costs, the company's management was mispricing its products. An activity-based costing system is a two-stage process of assigning costs to products. In stage one, activity-cost pools are established. In stage two a cost driver is identified for each activity-cost pool. Then the costs in each pool are assigned to each product l...

Corporate Financial Reporting Complexity: Recommendations for Improvement

This paper examines the Final report of the Advisory Report of the Advisory Committee on Improvements to Financial Reporting and offers recommendations to progressively redress the existing complex system of standards, rules, and regulations that fail to provide relevant and transparent financial information. Furthermore, this complexity has been mounting for many years as a result of different forces; structural, institutional, cultural, behavioral, and political. It is believed that these r...

The Market Effect of the Troubled Asset Relief Program (Tarp)

This study was undertaken to assess the effect the Troubled Asset Relief Program (TARP) has had in its brief life to stockholders. An analysis was conducted using a sample of 25 firms which participated in the Program. This analysis compared the security prices of these firms in the year preceding TARP (pre-TARP) to the security prices of the same firms in the year after TARP (post-TARP). Findings indicate that stockholders of these firms realized a drop in security prices between the two per...

Does the Weighted Cost of Capital Associate with Returns On Operating and Financial Assets with Investor Anticipation or Reaction? [And Do Operating and Financial Assets Have Synergy?

This study focuses on the investors' perspective of the consequences of management's actions with respect to the cost of firm capital and the returns on assets. Conventional thought hypothesizes management to maximize the return on asset investments within the rubric of minimizing the firm weighted average cost of capital. Within this framework, we investigate financial statement relevance with regard to whether investors anticipate or react to firm asset investment returns. The study also ex...

Adverse Internal Control Over Financial Reporting Opinions and Auditor Dismissals/Resignations

This paper describes a study of the factors that affect a firm's choice to either dismiss or remain with their incumbent auditors when faced with adverse auditor opinions on the design and effectiveness of their internal controls. The study focuses on a unique sample of firms that received an adverse opinion in one year, followed by an unqualified opinion in the following year, thereby isolating a critical time in the client/auditor relationship. Auditor dismissals and a limited number of aud...

A Case Study On One Nation's Attempt to Move to Accrual Accounting

This paper reports on an investigation into Fiji's attempt to use accrual accounting as its financial reporting format. Findings suggest that, due to the nation's low-skilled public service, high labor turnover and insufficient investment in capital equipment, undertaking the move to accrual accounting for this and similar developing nations requires a different approach to that used by developing economies. This paper concludes with recommendations on how to effectively introduce accrual acc...

Modeling Cost Behavior

Literature acknowledges that costs might not be linear and proportional with activity levels. However, conjectures about the sticky behavior of costs are largely based on anecdotal and empirical evidence despite sufficiently advanced economic theory that explains cost behavior. The paper firstly derived a basic cost behavior model which will allow us to test asymmetric behavior. Then using Philippine company data from 2004 to 2008, the study will run different linear models, particularly OLS ...

Stock Split Announcements: A Test of Market Efficiency

An efficient market is a market where all relevant information is available to all participants at the same time, and where prices respond immediately to available information. Stock markets are considered the best examples of efficient markets. This means that possibility exists for investors to make sustainable, above normal, returns. The purpose of this study is to test market efficiency - effects of stock split announcements on stock price. This analysis will focus closely at the semi-str...