Earnings and book value are commonly used as the basis for firm valuation. However, the reliability of earnings, as indicated by earnings management, may affect its relevance in determining firm value. This thesis investigates the link between earnings management and firm valuation by assessing the impact of earnings management on the value-relevance of earnings and book value.Three different sources of earnings management are investigated: total discretionary accruals, short-term discretionary accruals, and long-term discretionary accruals. Total discretionary accruals are estimated using the Jones model (Jones 1991). New models are developed to estimate short-term and long-term discretionary accruals. These models enable investigation of the differential impact of earnings management via short-term versus earnings management via long-term discretionary accruals. The primary proposition is that earnings management via long-term discretionary accruals has a greater impact on the value-relevance of earnings and book value than earnings management via short-term discretionary accruals.For firm’s whose discretionary accruals indicate earnings management, the value relevance of earnings is expected to be lower than for firms without earnings management. Moreover, in the presence of earnings management, it is expected that there will be a shift from a reliance on earnings to a reliance on book value in the valuation process. This would be reflected in a decrease in the value-relevance of earnings and an increase in the value-relevance of book value.This thesis provides evidence that earnings management plays a role in the valuation process. A major contribution of this study is the development of models to enable the estimation of short-term and long-term discretionary accruals, thereby extending the earnings management literature by addressing the differential effect of short-term versus long-term discretionary accruals. The results clearly demonstrate that low reliability of information reduces its value-relevance. This link between the integrity of accounting information and its usefulness to market participants supports the need for ongoing regulatory activity to improve the integrity of the financial reporting process.

<p> The purpose of this qualitative exploratory case study was to investigate the reasons why there are an insufficient number of qualified applicants for governmental professional accounting positions. The 2014-2015 curriculum catalogs of four-year colleges and universities were examined to determine if governmental accounting courses were offered as part of the business administration degree programs. Twenty past and current post-secondary business administration students were interviewed to collect data about their educational experiences and their perceptions of careers in governmental service. The data were triangulated using NVivo 10&reg; qualitative analysis software to identify significant patterns. The five significant patterns identified were: a) scarcity of governmental accounting courses, b) no discussion of governmental accounting as a career, c) compensation and job stability most considered factors, d) negative perceptions of a career in governmental service and e) state and local government human resources personnel need to be active in campus recruitment activities. The analyses revealed post-secondary business administration students are not aware of the opportunities in governmental accounting careers. Therefore, findings and recommendations from this research will enable state and local governmental human resources personnel to develop recruitment activities to increase the number of qualified applicants for governmental professional accounting positions.</p>

This dissertation consists of two chapters. Chapter 1 examines the ex-ante optimality of repricing and rescission of executive stock options while considering dilution effects and the tax effects of new accounting rules associated with repricing and rescission. Traditional repricing lowers the exercise price of outstanding options to match the declined market value of the stock. Rescission allows employees to cancel already-exercised options when share prices fall, which was not an issue until 2000 when the stock market plummeted. To my best knowledge, this study is the first research on examining the possible optimality of traditional repricing and rescission while considering the economic impact of changing accounting rules in an ex-ante contracting setting. Chapter 2 examines the ex-ante optimality of repricing alternatives and derives an optimal repricing-triggered policy, which specify how deeply the options are under water before repricing takes place. In practice, traditional repricing practices have become obsolete since new accounting rules took effect in July 2000. To avoid associated variable accounting charges that cause uncertainty in future reported earnings, companies have tried several repricing alternatives as solutions to rescuing underwater options. This study not only justifies the occurrence of some repricing alternatives but also quantifies the impact of the marking-to-market feature imbedded in the new accounting rules.

Three questions regarding the effectiveness of Section 162(m) are addressed by this dissertation: (1) did Section 162(m) target the firms who were paying their executives excessive compensation that was not related to performance? (2) did Section 162(m) achieve its desired result of reducing compensation levels and increasing pay-performance sensitivities? and (3) did stockholders benefit from Section 162(m)? The empirical results indicate that firms subject to Section 162(m) had higher levels of compensation, even after controlling for firm size, performance, industry, growth opportunities and CEO ownership. However, the cash compensation in these firms was more sensitive to firm performance. Therefore, it is questionable whether Section 162(m) affected the intended target. Firms with compensation in excess of 1 million were required to disclose their response to Section 162(m) in their 1994 proxy statements. They had three alternatives: (1) "qualify" compensation in excess of the 1 million by making it contingent on a performance measure, (2) defer excess compensation to a period when it would be deductible, and (3) forego the deduction. Firms were grouped by their response and their compensation levels, pay-performance sensitivities and pay mix were analyzed. Compensation levels increased for all three groups, primarily from the use of more stock options. This also increased the proportion of stock-based compensation (pay mix). Pay-performance sensitivities decreased for qualifying firms which runs counter to the intent of Section 162(m). On the other hand, firms who chose to forego the deduction demonstrate an increase in pay-performance sensitivities. Finally, the evidence indicates a positive market reaction to the announcement that a firm would qualify their compensation or forego the deduction. A negative reaction is documented for deferring firms. This seems to indicate that, overall, stockholders did benefit from Section 162(m).

The Transition cost accounting system integrates clinical, resource utilization, and financial information and is currently being used by several hospitals in Canada and the United States (U.S.) to calculate the costs of patient care. The potential use of the Transition system for estimating in-hospital costs in health services research, however, depends on the accuracy of the system's measurements. Thus, the objectives of this thesis were (1) to assess the use of hospital-based cost accounting systems to measure costs of treatment, (2) to identify potential sources of measurement error inherent to the Transition system methodology, (3) to collect audit documentation in order to evaluate the accuracy of the Transition system's information, and to collect cost of treatment data from Canadian and U.S. hospitals in order to illustrate the system's use in health services research, and (4) to discuss the potential use of the Transition system in health services research in Canada and the U.S. (Abstract shortened by UMI.)

<p> This study employed a qualitative case study methodology to examine some of the challenges that are hindering the fragile state of Liberia from benefiting from the use of country public financial management (PFM) systems for donor-financed projects. The study also examined the effects that these challenges pose to the fragile state. It then explored recommended strategies and policies to resolve the challenges. The data for the study was collected from 15 participants through individual in-depth interviews. The cases of the 15 participants were cross-analyzed based on 4 themes and 13 patterns that arose from the participants' data for the challenges, 4 themes and 6 patterns that emerged from the effects of the challenges, and 5 themes and 13 patterns that emerged from the recommended strategies and policies of the participants. The findings revealed the cardinal or major challenges that, as the participants pointed out, obstruct or hinder the effective use of country PFM systems for donor-financed projects in Liberia. Amid the challenges, some were directly linked to government and others to donors. Moreover, the study observed that some of the challenges were interrelated. In addition, the findings also showed the effects that these challenges could pose to the country's future prospect in regards to country PFM systems use. The study then examined the various recommended strategies and policies for government and donors alike that could help solve the challenges the fragile state faces. The findings of this study fill a gap in practical research on fragile states, specifically Liberia, with regards to country PFM systems and add valuable information on how to effectively and efficiently deal with challenges for eventual full PFM adoption.</p>

<p> Business leaders remain exposed to financial and accounting fraud as well as loss of profitability, despite the dictates of the SOX Act of 2002. The most challenging aspect of corporate management is the unexpected nature of an emerging, existing, or an inherent financial risk. Guided by the evolution of fraud theory, this exploratory case study's purpose was to identify and explore the financial management strategies that corporate financial managers need to adequately protect investors. Twenty participants from a population group of corporate auditors of Fortune 1000 corporations within 70 miles of Columbus, Ohio provided input for this study. Data from the interviews were analyzed through coding, reviewing, categorizing, and combining common statements. The research findings included themes of knowledge and types of risks; the impact of financial fraud and risks on investment; the impact of accounting, auditing, and financial reporting standards; as well as financial management training to minimize audit expectations. These themes formed the focus of exploring the financial management strategies that corporate financial managers need to adequately protect investors and investments. In addition to the antifraud measures, financial managers may detect and control inherent risks in emerging opportunities for positive social change that includes enhanced knowledge in diversification of investments, an increase in economic resources, economic growth, and greater employment in the United States.</p>

This thesis examines the relationship between corporate governance, risk assessment and debt contracting within the Australian context where companies are heavily reliant on intermediated debt financing.

Earnings and book value are commonly used as the basis for firm valuation. However, the reliability of earnings, as indicated by earnings management, may affect its relevance in determining firm value. This thesis investigates the link between earnings management and firm valuation by assessing the impact of earnings management on the value-relevance of earnings and book value.Three different sources of earnings management are investigated: total discretionary accruals, short-term discretionary accruals, and long-term discretionary accruals. Total discretionary accruals are estimated using the Jones model (Jones 1991). New models are developed to estimate short-term and long-term discretionary accruals. These models enable investigation of the differential impact of earnings management via short-term versus earnings management via long-term discretionary accruals. The primary proposition is that earnings management via long-term discretionary accruals has a greater impact on the value-relevance of earnings and book value than earnings management via short-term discretionary accruals.For firm’s whose discretionary accruals indicate earnings management, the value relevance of earnings is expected to be lower than for firms without earnings management. Moreover, in the presence of earnings management, it is expected that there will be a shift from a reliance on earnings to a reliance on book value in the valuation process. This would be reflected in a decrease in the value-relevance of earnings and an increase in the value-relevance of book value.This thesis provides evidence that earnings management plays a role in the valuation process. A major contribution of this study is the development of models to enable the estimation of short-term and long-term discretionary accruals, thereby extending the earnings management literature by addressing the differential effect of short-term versus long-term discretionary accruals. The results clearly demonstrate that low reliability of information reduces its value-relevance. This link between the integrity of accounting information and its usefulness to market participants supports the need for ongoing regulatory activity to improve the integrity of the financial reporting process.

Thesis (Ph.D.)--Capella University, 2007. / (UMI)AAI3263166. Source: Dissertation Abstracts International, Volume: 68-04, Section: A, page: 1535. Adviser: Luis E. Rivera.