The objective of this dissertation is to investigate the effect of the segmental disclosure required by Statement of Financial Accounting Standards No. 14 (SFAS 14) on the operating risk of multisegment firms. This investigation is accomplished in two phases. A theoretical model establishing the relationship between segmental disclosure and operating risk is developed in phase one. In the second phase, this model is employed in an empirical study that evaluates the effect of SFAS 14 on the operating risk of the affected firms. The findings of each of these phases are summarized below. A theoretical model for measuring operating risk is developed first. This model is developed by decomposing systematic risk into operating and financial risks. Then it is shown how the additional segmental disclosure provided by SFAS 14 can be used to assess the value of this measure of operating risk. First, the determinants of operating risk are identified. Then it is argued that if the additional disclosure provided by SFAS 14 had an effect on the assessment of operating risk, this effect would be associated with the disclosure of segmental assets. This argument provides the basis for conducting an empirical study that evaluates the effect of the segmental disclosure provided by SFAS 14 on operating risk. In this dissertation, the empirical study examines the effect of disclosure of segmental assets on the operating risk of firms that disclosed such information for the first time following the initiation of SFAS 14. A sample of these firms form the treatment group. The control group is composed of single-segment firms. The firms in the control group did not disclose segmental assets prior to or after SFAS 14 went into effect. A control group composed of multisegment firms is not used in this study because only two firms are available from the sample taken. Two hypotheses are tested. Hypothesis 1 simply tests whether SFAS 14 had an effect on the operating risk of the affected firms. Hypothesis 2 then tests if SFAS 14 had a favorable effect on operating risk. The effect on operating risk is evaluated by comparing changes in operating risk from pre-regulation period to post-regulation period for the treatment group with those of the control group. In both hypotheses, the null hypothesis that SFAS 14 did not affect operating risk is tested. The Mann-Whitney U test is employed to test Hypothesis 1. The Mann-Whitney U test, the Wilcoxon Matched-Pairs Signed-Ranks Test and multiple regression analysis are used to test Hypothesis 2. The empirical results indicate that neither of the null hypotheses could be rejected at any conventional level of significance. In short, the empirical results tend to suggest that the additional segmental disclosure provided by SFAS 14 did not have a favorable effect on the operating risk of the affected firms. However it is advised that caution should be exercised in drawing inferences based on these results because of the potential effects on operating risk by factors not controlled for in this study. Finally, an alternative future study is suggested. Pending the empirical findings of the future study it is suggested that the empirical results presented in this study should be considered preliminary.

Thesis (Ph. D.)--University of New South Wales, 2001. / Also available online.

Thesis (Ph. D.)--Florida State University, 2004. / Advisor: Dr. Ashley A. Bush and David B. Paradice, Florida State University, College of Business, Dept. of Management Information Systems. Title and description from dissertation home page (viewed June 6, 2005). Document formatted into pages; contains vii, 101 pages. Includes bibliographical references (p. 95-100).

Thesis (Ph. D.)--University of Wisconsin, 1968. / Typescript. Vita. eContent provider-neutral record in process. Description based on print version record. Includes bibliography.

Research report--Massey University, 1998. / Includes bibliographical references (leaves 101-115)

Thesis (Ph. D.)--University of Texas at Austin, 1999. / Vita. Includes bibliographical references (leaves 99-105). Available also in a digital version from Dissertation Abstracts.

This study reports the results of experimental laboratory markets designed to test two propositions set forth by Verrecchia 1982 . The first proposition addressed the change in the level of private information acquisition given a change in the level of public information in a competitive market. The second proposition considered the amount of informedness in the market given an increase in the level of public information and the resultant change in private information. The development of these propositions was motivated by the ambiguous results produced from the market-based accounting research investigating the impact on market price of mandated accounting disclosures. A limitation of the market based research is the inability to control for changes in the level of private information acquisition given a change in the level of public information which may explain the ambiguous results. A laboratory markets method was used to test the propositions because of the control provided by this research method. The market mechanism employed was a version of the PLATO computerized double-auction mechanism described by Smith, Suchanek, and Williams 1985 . This trading mechanism allows traders to communicate bids and offers and to form contracts to buy and sell assets in a computerized market which provides a high degree of control. In addition to the market for assets, a posted offer market for private information was used to allow traders to acquire private information. The results show significant decreases in private information acquisition in markets with higher levels of public information. Thus, public and private information appear to be substitute goods in this experimental setting. The results also indicates that the variance of contract prices around the true dividend value is significantly greater in markets with lower levels of public information. This remains true when controlling for possible confounding variables including market day, the contract number, the dollar value of private information, and the number of informed traders that executed the contract.

This dissertation extends previous studies on firms' differential earnings response coefficients. It provides further theoretical explanation and empirical evidence for the differential earnings response coefficients across firms and time. The empirical evidence found by Ball & Brown (1968) that the sign of unexpected earnings is positively correlated with the sign of market reactions is used to improve the control of measurement errors on investors' prior belief. Revisions of financial analysts' forecasts (FAFs) for firms' future earnings per share (EPS) are used as the event information. Both the impact of FAFs quality on investors' earnings belief revision and the mapping from EPS to security price are considered. Investors are assumed to be Bayesians who are homogeneous in belief. They use FAFs as information for making portfolio investment decisions. FAFs with smaller contemporary dispersion relative to the variance of investors' prior belief are considered to have higher quality. It is proposed that investors have stronger faith on the forecasts with higher information quality. A non-normative approach is used to map EPS into security prices. The market price over (expected) earnings ratio (P/E) is used as a linear approximation for the security valuation function. The major advantage of this approach is that non-earnings factors that have price effect on securities are implicitly controlled. The model predicts that ceteris paribus, the earnings response coefficient adjusted for the differential P/E is positively correlated with the quality of FAFs. Cross-sectional and time series samples of 1097 FAFs revisions from Standard & Poor's Earnings Forecaster in the years 1981 to 1985 are used in the empirical test. The empirical results are consistent with the theoretical implication. The quality of FAFs is found to be positively correlated with the P/E adjusted earnings response coefficient at one percent significance level. The results are robust across event day windows, the estimation periods for market model parameters and the price reaction measurements.

There has been little research on intellectual capital (IC) reporting practices of UK firms or on the incentives/disincentives that motivate them to disclose information about their value drivers. Therefore, this study explores annual report disclosures and seeks to explain why managers choose to disclose. The sample consists of 100 London Stock Exchange firms from nine knowledge-based sectors. Whilst adopting a primarily positive accounting theory explanation of disclosure, a new combination of theories (capital market transactions theory, proprietary costs theory and corporate governance theory) is used to generate explanatory variables. The results show that there is a skewing toward relational capital. However, there were large differences in the amount of information disclosed, both across sectors and, in many cases, inside sectors, suggesting that different sectors, or even different companies, may have quite different value drivers. Initial analysis of possible motives was conducted using an OLS regression including all possible explanatory independent variables. However, neither corporate governance nor proprietary costs are well-theorised, and several different variables were used to proxy each of these. Therefore, reduced regression models were also employed. Principal component analysis was used to generate one composite measure of corporate governance and proprietary costs. The results showed that reporting IC is negatively associated with the extent of external financing, while firms with high market-to-book values also disclose less IC information. However, contrary to expectations, the acquisition variable was insignificant although as expected, the relation between human capital disclosure and foreign operations was found to be positive and significant. For proprietary costs variables, there was a significantly positive relation between entry barriers and IC disclosure, and a negative relationship between IC and the intensity of industry competition. Finally, there was a significant, positive relationship between corporate governance and the disclosure of all types of IC.

Legitimacy theory as an explicator of longitudinal and cross-sectional variability in social and environmental disclosure is explored using a content analysis based method. Annual corporate reports are examined for ten UK FTSE 100 companies in five sectors over the year 1974 to 2000 by extracting word count data into the three categories of employee welfare, community and environmental disclosure. Eight hypotheses are generated, some of which are adapted from previous studies, to ''test for'' legitimacy theory. Three hypotheses test for intersectoral difference by disclosure category, three test for intrasectoral agreement by category and two test for correlation between environmental disclosure over time and environmental group membership in the UK.The ability of the study to yield certainty of explanation upon demonstration of hypotheses is constrained by the epistemogically ''semi-hard'' or ''indicative-only'' quality of the data. Data analysis is carried out and conclusions are drawn within these constraints.Evidence for a legitimacy-based explanation of disclosure variability is found where the categories are sufficiently resolved and circumscribed to discriminate by sector. In this study, community and environmental disclosure demonstrate this and thus provide evidence for a legitimacy-based explanation of social disclosure whilst employee welfare disclosure is found to be a less useful category for this purpose.