Thesis (Ph.D.)--Drexel University, 2008. / Includes abstract and vita. Includes bibliographical references (leaves 78-85).

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.

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.

O presente trabalho de pesquisa tem por objetivo analisar algumas das inúmeras decisões do Supremo Tribunal Federal e do Superior Tribunal de Justiça, bem como do Tribunal de Justiça de São Paulo, em matéria de controle jurisdicional dos atos administrativos discricionários e verificar se é possível identificar mudança substancial nos limites desse controle. O trabalho foi dividido em duas partes, sendo a primeira constituída por uma pesquisa bibliográfica destinada, essencialmente, a situar o tema da discricionariedade administrativa, num enfoque conceitual e histórico. A segunda parte refere-se à pesquisa sobre o tema na jurisprudência do Supremo Tribunal Federal, Superior Tribunal de Justiça, Tribunal de Justiça de São Paulo e, ainda, no acórdão relativo à apelação cível nº. 1.422 do Tribunal de Justiça do Rio Grande do Norte, cuja relatoria ficou a cargo de Miguel Seabra Fagundes. Os atos administrativos discricionários, por muito tempo foram considerados insindicáveis pelo Poder Judiciário, ou seja, imunes à apreciação jurisdicional. Contudo, é possível identificar o surgimento de alguns parâmetros jurídicos que objetivaram restringir a atividade administrativa discricionária, inserindo-a, sob determinados aspectos, no âmbito da apreciação jurisdicional. O balizamento inicial restringiu-se à lei, permanecendo o mérito do ato administrativo intocado. Nesse processo de tentativa de contenção dos atos administrativos discricionários desenvolveram-se teorias de controle, como a teoria do desvio de poder e a teoria dos motivos determinantes. Cite-se, também, a teoria dos conceitos jurídicos indeterminados e, mais recentemente, a teoria da vinculação dos atos administrativos aos princípios constitucionais. O mérito do ato administrativo é o espaço que ainda suscita algumas controvérsias. A pesquisa jurisprudencial foi realizada, em sua maioria, diretamente nos sítios do Tribunal respectivo. Nota-se, ao analisar a jurisprudência, que há uma tendência no STF e no STJ em acolher a tese de uma apreciação mais ampla pelo Poder Judiciário, como foi o caso do Resp 429570/GO, cuja relatoria ficou a cargo da Ministra Eliana Calmon; se bem que é ainda, bastante comum, os acórdãos explicitarem que não cabe apreciação pelo judiciário sob o aspecto da conveniência e oportunidade do ato administrativo, ou seja, do mérito do ato. / This research aims to examine some of the numerous decisions of the Supremo Tribunal Federal and Superior Tribunal de Justiça, as well as the Tribunal de Justiça de São Paulo, regarding judicial control of discretionary administrative acts and verify that is possible to identify substantial change in the limits of this control. The work was divided into two parts, the first consisting of a literature research aimed essentially to place the issue of administrative discretion, in a conceptual and historical focus. The second part refers to research on the topic in the jurisprudence of the Supremo Tribunal Federal, Superior Tribunal de Justiça, Tribunal de Justiça do Estado de São Paulo and also in the judgment on the civil appeal nº. 1422 of the Tribunal de Justiça do Rio Grande do Norte, whose rapporteur was entrusted to Miguel Seabra Fagundes. Discretionary administrative acts were long disregarded by the judiciary, in other words immune to judicial review. However, it is possible to identify the rise of some legal parameters that aimed to restrict the discretionary administrative activity by inserting it, in certain respects, within the scope of judicial review. The initial marking was restricted to the law, remaining the substance of the administrative act untouched. In this process to attempt to contain discretionary administrative acts were developed theories of control, as the deviation of power and the theory of determinants reasons. Is mentioned, too, the theory of indeterminate legal concepts and, more recently, the theory of binding administrative acts to constitutional principles. The merit of the administrative act is the space that still shows some controversies. The jurisprudential research was conducted, for the most part, directly on the websites of the respective Court. It is noted, when considering the case law, that there is a trend in the STF and STJ to welcome the idea of a wider appreciation by the judiciary, like was the case Resp 429570/GO, whose rapporteur was in the responsibility of the Minister Eliana Calmon, although it is still quite common, the judgments stating that it is not for consideration by the judiciary under the aspect of convenience and opportunity of the administrative act, in other words, the act of merit.

O presente trabalho de pesquisa tem por objetivo analisar algumas das inúmeras decisões do Supremo Tribunal Federal e do Superior Tribunal de Justiça, bem como do Tribunal de Justiça de São Paulo, em matéria de controle jurisdicional dos atos administrativos discricionários e verificar se é possível identificar mudança substancial nos limites desse controle. O trabalho foi dividido em duas partes, sendo a primeira constituída por uma pesquisa bibliográfica destinada, essencialmente, a situar o tema da discricionariedade administrativa, num enfoque conceitual e histórico. A segunda parte refere-se à pesquisa sobre o tema na jurisprudência do Supremo Tribunal Federal, Superior Tribunal de Justiça, Tribunal de Justiça de São Paulo e, ainda, no acórdão relativo à apelação cível nº. 1.422 do Tribunal de Justiça do Rio Grande do Norte, cuja relatoria ficou a cargo de Miguel Seabra Fagundes. Os atos administrativos discricionários, por muito tempo foram considerados insindicáveis pelo Poder Judiciário, ou seja, imunes à apreciação jurisdicional. Contudo, é possível identificar o surgimento de alguns parâmetros jurídicos que objetivaram restringir a atividade administrativa discricionária, inserindo-a, sob determinados aspectos, no âmbito da apreciação jurisdicional. O balizamento inicial restringiu-se à lei, permanecendo o mérito do ato administrativo intocado. Nesse processo de tentativa de contenção dos atos administrativos discricionários desenvolveram-se teorias de controle, como a teoria do desvio de poder e a teoria dos motivos determinantes. Cite-se, também, a teoria dos conceitos jurídicos indeterminados e, mais recentemente, a teoria da vinculação dos atos administrativos aos princípios constitucionais. O mérito do ato administrativo é o espaço que ainda suscita algumas controvérsias. A pesquisa jurisprudencial foi realizada, em sua maioria, diretamente nos sítios do Tribunal respectivo. Nota-se, ao analisar a jurisprudência, que há uma tendência no STF e no STJ em acolher a tese de uma apreciação mais ampla pelo Poder Judiciário, como foi o caso do Resp 429570/GO, cuja relatoria ficou a cargo da Ministra Eliana Calmon; se bem que é ainda, bastante comum, os acórdãos explicitarem que não cabe apreciação pelo judiciário sob o aspecto da conveniência e oportunidade do ato administrativo, ou seja, do mérito do ato. / This research aims to examine some of the numerous decisions of the Supremo Tribunal Federal and Superior Tribunal de Justiça, as well as the Tribunal de Justiça de São Paulo, regarding judicial control of discretionary administrative acts and verify that is possible to identify substantial change in the limits of this control. The work was divided into two parts, the first consisting of a literature research aimed essentially to place the issue of administrative discretion, in a conceptual and historical focus. The second part refers to research on the topic in the jurisprudence of the Supremo Tribunal Federal, Superior Tribunal de Justiça, Tribunal de Justiça do Estado de São Paulo and also in the judgment on the civil appeal nº. 1422 of the Tribunal de Justiça do Rio Grande do Norte, whose rapporteur was entrusted to Miguel Seabra Fagundes. Discretionary administrative acts were long disregarded by the judiciary, in other words immune to judicial review. However, it is possible to identify the rise of some legal parameters that aimed to restrict the discretionary administrative activity by inserting it, in certain respects, within the scope of judicial review. The initial marking was restricted to the law, remaining the substance of the administrative act untouched. In this process to attempt to contain discretionary administrative acts were developed theories of control, as the deviation of power and the theory of determinants reasons. Is mentioned, too, the theory of indeterminate legal concepts and, more recently, the theory of binding administrative acts to constitutional principles. The merit of the administrative act is the space that still shows some controversies. The jurisprudential research was conducted, for the most part, directly on the websites of the respective Court. It is noted, when considering the case law, that there is a trend in the STF and STJ to welcome the idea of a wider appreciation by the judiciary, like was the case Resp 429570/GO, whose rapporteur was in the responsibility of the Minister Eliana Calmon, although it is still quite common, the judgments stating that it is not for consideration by the judiciary under the aspect of convenience and opportunity of the administrative act, in other words, the act of merit.

This thesis examines the relationship between tax-loss selling (TLS), where investors with taxable gains sell stocks that have declined in value just before the fiscal year-end to generate offsetting tax losses, and managers?? incentives to influence stock prices, either through increased disclosure or by engaging in upwards earnings management. Firms whose stock prices represent greater potential tax losses in investors?? portfolios at year-end are predicted to increase their disclosure level in June to prevent further share price falls due to TLS, and have higher levels of accruals. Using the number of discretionary, market-sensitive news releases in the Signal G announcement database to measure disclosure frequency, this thesis finds that, for a sample of 14,713 firm-year observations drawn from all ASX firms for the years 1994 to 2007, stocks with larger negative returns have higher disclosure in June, after controlling for size, performance, risk and external financing dependence. This is particularly true of small mining and exploration companies that are more reliant on voluntary disclosure as a vehicle for lowering information asymmetry. This increased disclosure does not appear to contribute to the higher July returns earned by stocks that experienced significant TLS in June. Disclosure frequency is negatively associated with the magnitude of operating and total accruals, suggesting that earnings management is less likely for firms with higher disclosure. There is also evidence that smaller firms with poor stock price performance have higher levels of operating accruals and thus may be more likely to engage in earnings management.

The intensification of downtown Vancouver is the result of a structured fiscal, design and planning project. Cardinal to this effort is the realization of public amenities through the development process. However, those involved in the struggle to control the provision of amenities deny that no less than the determination of legitimate public goods is at stake in the contest. Employing Bourdieu's understanding of capital and related description of social space, the objective of the thesis is to examine how amenity production is oriented by the public benefit's utility to the dominant interest of capital accumulation. Reviewing the adoption of discretionary zoning and its corollaries to planning permission explicates the relation of a legalized aesthetic to the process of amenitization. The understanding of physical heritage asa public value is among the derivatives of this association with the introduction of planning mechanisms to encourage the retention of historic structures. The subsequent naturalization of heritage as public value and concurrent endowment of its capacity to facilitate development serves as an appropriate vehicle in the consideration of amenity valuation. By specifying the physical form and the legitimated community value of approved development, City reports and bylaws are the primary means of study. Analysis of these documents finds heritage to be the principal amenity realized through development mechanisms and illustrates its substantial influence on the physical and social space of the city. Case studies further support the thesis objective by addressing the constitution of public amenities aligned with the accommodation of the dominant interest; the unbounded consideration of heritage supports the retention of the physical features most conducive to intensification and results in greater development ability in terms of both private capital and in the realization of more bounded social amenities. The misrecognition of this key utility lends considerable authority over the physical transformation of the city and, more importantly, facilitates control of the related social environment. The thesis concludes that heritage serves the ideological continuation of the field of power, and cautions that recent efforts to consider less tangible qualities are symptomatic of this process.

In this thesis we analyze optimal demand management policies for stochastic systems. In the first system considered, a manufacturer decides how to manage demand from customers that differ in their priority level and willingness to pay. He has limited production capacity and predetermined prices throughout the horizon. We find an optimal production and inventory strategy that rations current and future limited capacity between customer classes through reserving inventory for the future and accepting orders now for future delivery. Next, we extend these results to the case when the customers have different tolerance to delayed fulfillment, namely, first-class customers never accept backlogging whereas second-class customers agree to wait one period for a discount. We find an optimal policy similar to the production and inventory strategy that is used for the first system based on threshold values. The third system considers a firm whose recent performance in meeting quoted leadtimes affects future demand arrivals. We assume that the probability of a customer placing an order depends on the quoted leadtime, and both customer arrivals and processing times are stochastic. When capacity of the firm is infinite, we find the optimal leadtime to quote, and when capacity is finite and leadtime is industry-dictated, we determine that the optimal demand acceptance policy does not necessarily have a nice structure. We comment on the structure of the optimal policy for a special case and develop several heuristics for the general case. The final system considered in this thesis is the Sports and Entertainment industry, where demand is managed for a season of several performances by selling season tickets initially and single events later in the selling horizon. We specifically study the optimal time to switch between these market segments dynamically as a function of the state of the system and show that the optimal switching time is a set of time thresholds that depend on the remaining inventory and time left in the horizon.

After Freeman and Tse (1992), and Hayn (1995) indicated that positive-and negative-earning companies have different responses toward earning compositions based on the negative-earning companies¡¦ information content, Chamber (1996), Subramanyam and Wild (1996), Lipe, Bryant and Widner (1998) proposed the relationship between negative and future earning. In addition, Sloan (1996) suggested that accruals in the market have been over-valued. Xie (2001), however, pointed out that over-valued situation comes from manipulable earning compositions. Recently, Dopuch (2005), and Joos and Plesko (2002) reexamined the properties of negative-earning samples and found that investors¡¦ attitude on negative earnings will depend on predicted reversal possibility for valuation of a company. However, Taiwan has no studies on accrual evaluations after differentiating positive and negative earning for companies. This study adopts Mishkin (1983) evaluation model on abnormal accruals to analyze Taiwan 1391 listed company for the sample period from 1986 to 2005. The empirical results suggest that ERCs¡¦ of negative-earning companies are not significant; if the companies are differentiated by persist negative earning and transitory negative earning, investors tend to overprice transitory negative earning. In addition, investors tend to overprice the (discretionary) accruals positive-earning companies, but make accurate evaluation toward persistent earning companies with low reversal possibility. This study also found that persistency of positive-earning companies is longer than negative-earnings. Finally, by using logistic regression to differentiate the possibility of negative-earning accruals, there is no significant difference between the logistic regression model and cash flow classification from the empirical test. Based on the findings, how Taiwan security market response and evaluate discretionary accruals can be further understood.

The purpose of the study is to use the data of the companies that are listed (including OTC) in Taiwan Stock Exchange to examine whether companies engage in earnings management in the years convertible bonds are issued and de-listed. We also want to know if there is any difference of earnings management whether convertible bonds are issued domestically or abroad. Discretionary current accruals are adopted as proxies for earnings management and the regression models are used to control the related variables. The empirical results indicate that companies conduct earnings management in the years convertible bonds are issued and there is no significant difference of earnings management whether convertible bonds are issued in Taiwan or abroad. However, the data after 2001 indicate that companies that issued convertible bonds abroad have less earnings management than those that issued convertible bonds domestically. The results also show no significant difference in the years convertible bonds are de-listed. The reasons may be due to the relatively small sample size or companies may not use discretionary accruals to conduct earnings management.