<p> This study examines changes in a company&rsquo;s audit committee accounting expertise following an M&amp;A transaction. M&amp;A accounting (ASC 805) is complex, nuanced, and error-prone. An M&amp;A also involves significant operational and financial changes for the acquirer, including changes in internal control over financial reporting. Thus, an acquirer&rsquo;s demand for accounting expertise is likely heightened at the time of an M&amp;A. This study provides the first insights (to my knowledge) regarding the role of accounting experts in the dynamic M&amp;A setting. In a sample of relatively large (on average) M&amp;As, I document that there are financial reporting benefits (reduced likelihood of restatements, higher likelihood of timely goodwill impairments, and smaller allocations of purchase price to in-process research and development) associated with changes/increases in audit committee accounting expertise. Further, my results suggest that changes/increases in audit committee accounting expertise matter more than changes/increases in other types of audit committee expertise (supervisory, industry, and M&amp;A contextual). I document that changes/increases in audit committee accounting expertise are positively associated with accounting and business complexities. Collectively, the evidence suggests that accounting expertise is valuable in the M&amp;A setting. This provides support for the SEC&rsquo;s definition (in its 2002 proposal, although not in its final 2003 rule) of audit committee financial experts as those with accounting-specific backgrounds (SEC 2002, 2003).</p>

I examine the costs and benefits to the issuer of hiring an IPO auditor specialist in the U.S. Initial Public Offerings market. I quantify IPO auditor expertise at the market share level and the market concentration level and then I investigate the audit fees of IPO audit expertise and the issuer underpricing in the U.S. IPO market. I find that there are significant fee premiums when an audit firm is a national IPO audit specialist and when an audit office is a city IPO audit specialist. I also find that IPO specialist auditors reduce first-day issuer underpricing. These results are robust to controlling for extant endogeneity with respect to choice of auditor. This paper contributes to both the auditor specialization literature and the IPO literature by investigating IPO audit specialization. This study also provides useful information to IPO market participants, such as issuers, investors, auditors, and regulators.

In recent years, the Public Company Accounting Oversight Board’s (PCAOB) inspections have frequently reported audit deficiencies related to fair value measurements. Motivated by PCAOB’s concern, this paper examines investors’ perceptions on audit quality of fair value measurements. Using a sample of U.S. public banks from 2008 through 2013, I document a significant positive (negative) association between stock prices (bid-ask spreads) and audit quality of fair value measurements. This finding indicates that audit quality adds incremental value to investors as it mitigates reliability concerns relating to fair value estimates. Furthermore, using the fair value hierarchy mandated by Statement of Financial Accounting Standards (FAS) 157, I find the audit quality effect is stronger for Level 3 fair value estimates; suggesting high audit quality mitigates the reliability concerns relating to the substantial estimation uncertainties and management bias inherent in the more opaque Level 3 financial assets. Additional cross-sectional evidence shows that the effect of audit quality on the pricing of fair value estimates is greater for smaller banks and banks with a declining regulatory capital.

The purpose of this study was to examine whether dialogic reading, an evidence based intervention involving interactive storybook reading, improved the basic concept knowledge of preschool children using flap books or storyline books. A multiple baseline design was used with four children to teach eight basic concepts. Concepts were identified for each child from the Boehm Test of Basic Concepts (Boehm, 2001) and embedded within the two different types of books, flap and storyline books, to determine if the type of book would have an intervention effect on vocabulary learning. A positive change in basic concept comprehension was demonstrated on the Boehm Test of Basic Concepts (Boehm, 2001) following implementation of dialogic reading strategies using flap books and basic storyline books indicating that overall the intervention was effective. However, the implications of the results regarding the type of storybook most appropriate for the intervention are not clear. Further research is warranted on the use of flap books and dialogic reading. / A Thesis submitted to the School of Communication Science and Disorders in partial fulfillment of the requirements for the degree of Master of Science.. / Degree Awarded: Summer Semester, 2010. / Date of Defense: June 17, 2010. / Basic Concepts, Preschool Children, Dialogic Reading, Storybook Reading, Flap Books / Includes bibliographical references. / Juliann Woods, Professor Directing Thesis; Carla Wood Jackson, Committee Member; Ramonda Horton-Ikard, Committee Member.

Previous studies of audit task structure and auditor knowledge structure have concluded that judgment performance is improved when a match between structures exists. Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting That is Integrated with an Audit of Financial Statements (2007) (AS No. 5) establishes a top-down task structure on the audit of internal control over financial reporting. The new AS No. 5 structure, unlike most other internal control task structures, includes a hierarchical analysis of both schematically and taxonomically organized information. Prior research suggests that auditor knowledge structures of internal controls are organized both schematically by transaction flow and taxonomically by audit objective. This study investigates how an auditing task characteristic (task structure) interacts with decision maker characteristics (attention and knowledge structure) to examine whether the new AS No. 5 task structure of internal control evaluation affects governmental auditors' processing of internal controls in three audit tasks: control risk assessment, analytic risk assessment, and pattern identification. Results indicate that auditors were better able to sort internal controls according to a traditional internal control task format as compared to the new AS No. 5 task format. However, results also suggest that in a weak control environment, the task format of AS No. 5 affected auditor ability to weight cues, as evidenced by control risk assessments and assessments of the probability of misstatement, such that risk assessments were greater in the AS No. 5 treatment than those of auditors using a categorical task structure. Finally, study findings support prior literature that suggests that as task complexity increases, auditor problem-solving ability correlates with improved decision performance. / A Dissertation submitted to the Department of Accounting in partial fulfillment of the requirements for the degree of Doctor of Philosophy. / Degree Awarded: Spring Semester, 2009. / Date of Defense: October 28, 2008. / Auditing Standard No. 5, Risk assessment, Decision-making, Pattern identification, Auditing / Includes bibliographical references. / Gregory J. Gerard, Professor Directing Dissertation; K. Anders Ericsson, Outside Committee Member; William A. Hillison, Committee Member; Jessen L. Hobson, Committee Member.

This study examines whether the mandated disclosure of CEO-to-employee pay ratios motivates firms to curb CEO pay. In July 2010, the U.S. Congress directed the SEC, via Section 953(b) of the Dodd-Frank Act, to enforce a rule that requires firms to disclose the ratio of the CEO’s pay to the median employee’s pay (the “rule”). The SEC proposed the rule in September 2013 and adopted it in August 2015. Though the SEC contends that the rule is intended to benefit shareholders, opponents claim that the rule is intended to shame firms into reducing CEO pay. I consider the merits of the opponents’ claim and conclude that it is consistent with theory that posits that disclosure mandates can be used to motivate disclosers to behave in a desired way. I then analyze the origins of the rule in light of this theory and conclude that it presents a suitable setting to test the said theory. Based on this conclusion, as well as evidence indicating that firms are likely to incur reputational losses from disclosing pay ratios, I hypothesize that firms that are required to comply with the rule (relative to firms that are not) will curb CEO pay prior to their first pay ratio disclosures. I further hypothesize this relative curb on CEO pay will be greater for firms that are more sensitive to the reputational effects of the rule (i.e., firms that are more susceptible to public scrutiny of pay ratios or adverse stakeholder reactions to pay ratios). While I find no evidence to support the former, I do find evidence to support the latter. In particular, although I find no evidence of a curb on residual CEO pay (i.e., the portion of pay that is not predicted by economic determinants) in response to the SEC’s proposal (or adoption) at the average firm, I do find evidence of a curb in response to the SEC’s proposal (but not adoption) at select firms that are more sensitive to the reputational effects of the rule. This result is important because it shows that, regardless of the rule’s intended objectives, reputational concerns motivate some firms to behave as if the rule shamed them into curbing CEO pay. / A Dissertation submitted to the Department of Accounting in partial fulfillment of the requirements for the degree of Doctor of Philosophy. / Summer Semester 2018. / July 16, 2018. / Includes bibliographical references. / Richard M. Morton, Professor Directing Dissertation; Yingmei Cheng, University Representative; Bruce K. Billings, Committee Member; Tianming Zhang, Committee Member.

The Securities and Exchange Commission and popular press have expressed concern that corporations guide analysts' forecasts with the purpose of managing earnings surprises and producing desired market reactions. Evidence suggests that firms that guide analysts' forecasts downward during the period and then beat the latest forecast earn a market premium. Furthermore, alternative paths by which earnings expectations evolve over the reporting period are associated with differential valuation consequences. In an experiment, I explore potential explanations (rooted in judgment effects) for observed market reaction patterns to the earnings expectations path and its components. I conjecture that the presence of uncertainty affects investor reaction to the expectations path in predictable ways. I further examine how investors respond to analyst forecasts and forecast revisions in forming their own earnings expectations. I find that investors are more pessimistic than analysts in their earnings expectations. Further, the divergence between investors' and analysts' expectations plays an important role in their reaction. My finding of a premium to beating the latest forecast appears to stem directly from the difference between the investors' own expectations and the analysts' consensus forecast. Because investors tend to be more pessimistic than the analysts, they perceive a positive (negative) earnings surprise to be larger (smaller) than reported which explains why investors appear to reward positive earnings surprises more than they penalize negative earnings surprises. / A Dissertation submitted to the Department of Accounting in partial fulfillment of the requirements for the degree of Doctor of Philosophy. / Degree Awarded: Summer Semester, 2004. / Date of Defense: June 21, 2004. / Firm Valuation, Analysts' Forecasts, Expectations Management, Earnings Expectation Paths, Individual Investor Reaction / Includes bibliographical references. / Richard Morton, Professor Directing Dissertation; Neil Charness, Outside Committee Member; Richard Dusenbury, Committee Member; Martin Fennema, Committee Member.

According to SAS No. 99 and the "Fraud Triangle" there are three major classes of fraud risk factors: pressures, opportunities, and rationalizations. This study first investigates the manner in which auditors react to pressures and opportunities, while assessing fraud risk and, searching for possible material misstatements. Then, this study investigates if SAS No. 99 recommended brainstorming sessions would accentuate or attenuate the tendency to be more sensitive to high pressures, and relatively less sensitive to high opportunities. It is hypothesized that brainstorming in groups will make the auditors even less (more) sensitive to the presence of high opportunities (high pressures) than, in cases where they act independently. In a 2 x 2 x 2 between-subjects design, using Big 4 auditors as participants, pressures and opportunities are manipulated at high and low levels, and brainstorming is manipulated at individual and group levels. The results indicate that, in the presence of high pressures (high opportunities), auditors assess a higher (lower) fraud risk and find significantly more (less) instances of potential material misstatements. This tendency to underweight opportunities and overweight pressures while assessing fraud risk and searching for material misstatements is accentuated in a group brainstorming setting. Hence, the recommendations of SAS No. 99 could reduce the overall effectiveness of an audit in a scenario where only high opportunities are observed. / A Dissertation submitted to the Department of Accounting in partial fulfillment of the requirements for the degree of Doctor of Philosophy. / Degree Awarded: Summer 2008. / Date of Defense: July 7, 2008. / Pressures, Fraud, Brainstorming, Opportunities / Includes bibliographical references. / Gregory Gerard, Professor Directing Dissertation; Richard Dusenbury, Committee Member; William Hillison, Committee Member; Colleen Kelley, Committee Member.

Numerous studies have been conducted involving preschoolers with speech and language disorders, suggesting a potential relationship between their communicative abilities and social acceptance. Because social status is highly valued by children and youth, this possible relationship warrants further exploration. The purpose of this study was to further describe children with speech sound disorders (SSD) and language learning disorders (LLD) in preschool and kindergarten, to determine if there was a difference between their social ratings and social skills in relation to the ratings and social skills of their typically developing peers (TDP). Participants for this study included seventeen children with communication disorders and 93 classroom peers. The rating-scale sociometric measure was used to compare the peer acceptance of these two groups. The Social Skills Rating System (SSRS) was also used to assess and compare the social skills of these two groups. Results indicated that children with communication disorders were less preferred playmates according to their mean social rating and demonstrated fewer social skills according the SSRS. Children with communication disorders also demonstrated a higher occurrence of negative ratings and problem behaviors than their TDP. Speech-language pathologists, parents, and educators should consider the implications of SSD and LLD beyond the arena of academic achievement and target social language skills as well. / A Thesis submitted to the School of Communication Science and Disorders in partial fulfillment of the requirements for the degree of Master of Science. / Degree Awarded: Summer Semester, 2010. / Date of Defense: June 21, 2010. / Popularity, Communication Disorders, Peer Acceptance / Includes bibliographical references. / Carla W. Jackson, Professor Directing Thesis; Kenn Apel, Committee Member; Murray Krantz, Committee Member.

This study investigates the framework of how litigation risk affects management forecasting of bad news and good news differently, resulting in differential optimism in these forecasts. I argue that distinct stock price patterns following these two types of management forecasts expose them to differential litigation risk ex post. While optimistic management forecasts of good news attract lawsuits, truthful rather than optimistic forecasts of bad news are more likely to trigger immediate lawsuits. As a result, managers adjust the optimism in bad and good news forecasts differently to reduce litigation risk. Consistent with my hypotheses, I find that ex ante litigation risk increases the optimism in bad news management forecasts but does not change the optimism in good news management forecasts, and the optimism in bad news management forecasts is higher than that in their good news counterparts. In addition, I use RegFD as a natural setting to demonstrate how arguably exogenous shocks amplify this effect. It appears that litigation risk in the pre-RegFD period is not sufficient to affect management forecasting behavior, and my findings only exist in the post-RegFD period. Last, I present evidence that is consistent with investors correctly perceiving and responding to the relative bias in bad new and good news management forecasts.