Home rule power gives local governments greater authority to obtain and manage fiscal resources and determine the distribution and extent of public services. By design, this authority alters government outcomes. The vast decentralization and local government structure literature examining horizontal and vertical competition demonstrates the complexity of predicting the effect of home rule on government sector size. Adding to the complexity, home rule is fundamentally distinct from decentralization. Home rule power gives local governments greater fiscal, structural, and functional authority, while state governments may retain partial authority. This can result in duplication of revenue generation and service provision. Under the leviathan hypothesis direct and indirect constitutional constraints are necessary to control government expansion. State restrictions on home rule authority may serve as a form of direct constitutional constraint that has been overlooked in the economic literature. This dissertation uses 1990 and 2000 Census data to empirically test home rule and other institutional factors’ effects on government size. The results of the studies in this dissertation confirm that home rule relaxes a constraint on government size, finding that home rule states tend to have larger government sectors. The empirical evidence supporting the role of institutions in public sector performance is a primary contribution of this dissertation

This dissertation consists of four essays which investigate efficiency analysis, especially when non-discretionary inputs exist. A new approach of the multi-stage Data Envelopment Analysis (DEA) for non-discretionary inputs, statistical inference discussions, and applications are provided. In the first essay, I propose a multi-stage DEA model to address the non-discretionary input issue, and provide a simulation analysis that illustrates the implementation and potential advantages of the new approach relative to the leading existing multi-stage models of non-discretionary inputs, such as Ruggiero's 1998 model and Fried, Lovell, Schmidt, and Yaisawarng's 2002 model. Furthermore, the simulation results also suggest that the constant returns to scale assumption seems to be preferred when observations have similar sizes, but variable returns to scale may be more appropriate when their scales are different. In the second essay, I make comments on Simar and Wilson work of 2007. My simulation evidence shows that traditional statistical inference does not underperform the bootstrap process proposed by Simar and Wilson. Moreover, my results also show that the truncated model recommended by Simar and Wilson does not outperform the tobit model in terms of statistical inference. Therefore, the traditional method, t-test, and the tobit model should continue to be considered applicable tools for a multi-stage DEA model with non-discretionary inputs, despite contrary claims by Simar and Wilson. The third essay raises an example of applying my new approach to data from Texas school districts. The results suggest that a lagged variable (e.g. students' performance in the previous year), a variable which has been used in the literature, may not play an important role in determining efficiency scores. This implies that one may not need access to panel data on individual scores to study school efficiency. My final essay applies a standard DEA model and the Malmquist productivity index to commercial banks in Thailand in order to compare their efficiency and productivity before and after Thailand?s Financial Sector Master Plan (FSMP) that was implemented in 2004.

none

As the majority of trading volume in the Taiwanese stock market is created by retail investors, the Taiwanese government has been aiming to promote professionalism by channelling the money from retail investors into the hands of professional asset managers. The Executive Yuan passed the third reading of the Amended Draft of the Securities & Exchange Law on the 30th June 2000 (Article 18-3, the Securities & Exchange Law) and the Securities & Futures Bureau approved on 5th January 2001 that investment & trust and investment consulting companies may offer services in the discretionary investment business. The discretionary investment business in, in nature, similar with the set-up of mutual funds; however, the discretionary investment business offers bespoke characteristics and specifications catering to specific requests of individual investors. The customization in the scope of investment and underlying targets is made possible to satisfy differing needs of individual clients. As institutional investors are sophisticated in mapping out investment strategies and dedicated in their fundamental analysis of macroeconomic and political situations, industry trends and financial reports of listed companies, they are able to better allocate assets and select the stocks. At first, this research reviews all the relevant literature and looks into the details of the legal framework governing the discretionary investment business. This paper argues that the originally well-intentioned regulations in fact, at least to some degree, hamper the development of the discretionary investment business. Then this research paper examines the characteristics, basic structure and the legal framework of the discretionary investment business, probes into the Taiwanese asset management market and uses Grand Cathay Securities Investment Trust as a case study, as an attempt to shed light to the future development of the discretionary investment business in Taiwan. In this case study, the author investigates the strategies employed by Grand Cathay Securities Investment Trust against the backdrop of the business environment and the market competition by deploying scenarios analysis, SWOT analysis and the Porter¡¦s competitiveness framework (cost leadership vs. product differentiations). The scope of the strategic considerations covers 4P, i.e. price, product, place and promotion. Finally, this research concludes that there are two competitive strategies in this market, i.e. cost leadership and product differentiations and summarize the operational, marketing and operational implications of these two strategies.

Based on the Statement of Financial Accounting Standards No.39, the employee bonus plan is treated as an expense item rather than earnings distribution of a firm. The empirical study examines the relationship between complementary measures of expensing employee bonus plan and earnings management. This research hypothesizes that managers will have stronger incentives to manage earnings when the new regulation will start to implement. This research empirically tests the differences in earnings management behaviors between Taiwanese technology firms and Taiwanese nontechnology firms. This research used the Modified Jones model (1995) to measure the discretionary accruals and design a regression model to testify empirical tests. This research also used pair t-test to examining the mean difference tests. The empirical results indicate that there is a significant difference between the dummy variable for industry classification and discretionary accruals. There is a significant positive relationship between discretionary accruals and earnings. There is a significant negative relationship between discretionary accruals and cash flow from operations. There is a significant difference between the discretionary accruals and administrative expenses. There is a strong connection between new regulation and managers¡¦ bonus. In order to protect their self-interests, the results show the changeable of earnings management behaviors.

Through the utilization of school discipline policies, millions of students nationwide have been harshly disciplined and/or removed from the regular school setting – with lasting impact on both students and their communities. With regards to discretionary school discipline policies, those tasked with implementing them – both at the district and school level, as well as in the classroom – could have a real influence on the outcomes of the policies, due to the basic viewpoints and interpretations that each policy administrator brings to the table. In other words, the way administrators make sense of discipline – including their interpretation of its purpose or efficacy – may be a key factor in the policy implementation process and in policy outcomes (including the over-use of discretionary policies and an over-reliance on more punitive consequences), something to be considered by those examining implementation and outcomes. This study explores the role of principals’ and assistant principals’ own viewpoints in the execution of such policies – specifically, in an urban school district in Texas – which no research has solely and fully touched on in Texas prior to this study. This researcher has sought to examine and explain the potential relationships between the following: a) middle and high school administrators’ interpretation of discretionary school discipline policies (including administrators’ views about purpose and efficacy to provide this researcher with context for each administrator); b) these administrators’ understandings about the factors (“affinities”/themes) that may influence their actual implementation of discipline policies (including both school-specific conditions and student-specific characteristics); and c) the rate of disciplinary actions taken by schools, in comparison to the predicted rate of such action. To provide an examination and explanation of administrators’ interpretation of, as well as the drivers behind, their implementation of discretionary school discipline policies, this researcher has utilized a qualitative research method highly informed by Interactive Qualitative Analysis (IQA), which also incorporates a quantitative data component. This researcher hopes that this study will allow for a broadened discussion of alternative ways of thinking – including considerations of effective alternative programming and strategies – that administrators can employ when dealing with students determined to be problems in the classroom. / text

This study provides evidence between auditors' fees and earnings management in New Zealand. The fee measures used in this study are audit fees, non-audit fees and total fees paid by a client to the audit firm. For each of the three fee measures, I derive client importance fee measures that reflect a client’s economic importance to the auditor relative to other clients of the auditor at the city office and national levels. This study employs both performance adjusted discretionary accruals and current accruals as proxies for earnings management. Using a sample of 224 firm-years comprising firms listed on the New Zealand Stock Exchange (NZX) in fiscal years 2004 and 2005, the results of multivariate tests indicate an adverse association between non-audit fees and earnings management. In other words, non-audit fees paid by a client relative to fees paid by other clients, at the office and national levels, appear to impair the auditor’s independence because clients generating relatively more non-audit fees report greater discretionary and current accruals. Such evidence is more pronounced for income increasing accrual proxies for earnings management. The results also show that audit fee is not related to earnings management. As the results in this study are consistent across both discretionary and current accruals, the validity of the results is strengthened. This study contributes to the literature by providing insight into how auditors’ fee metrics indicating client importance affect earnings management in a legal and institutional environment of a small economy, and where the audit market is largely saturated with little room for growth. This study raises implications for relevant regulatory bodies in New Zealand pertaining to future developments of auditor independence and financial reporting regulations.

abstract: In this dissertation, I examine the source of some of the anomalous capital market outcomes that have been documented for firms with high accruals. Chapter 2 develops and implements a methodology that decomposes a firm's discretionary accruals into a firm-specific and an industry-specific component. I use this decomposition to investigate which component drives the subsequent negative returns associated with firms with high discretionary accruals. My results suggest that these abnormal returns are driven by the firm-specific component of discretionary accruals. Moreover, although industry-specific discretionary accruals do not directly contribute towards this anomaly, I find that it is precisely when industry-specific discretionary accruals are high that firms with high firm-specific discretionary accruals subsequently earn these negative returns. While consistent with irrational mispricing or a rational risk premium associated with high discretionary accruals, these findings also support a transactions-cost based explanation for the accruals anomaly whereby search costs associated with distinguishing between value-relevant and manipulative discretionary accruals can induce investors to overlook potential earnings manipulation. Chapter 3 extends the decomposition to examine the role of firm-specific and industry-specific discretionary accruals in explaining the subsequent market underperformance and negative analysts' forecast errors documented for firms issuing equity. I examine the post-issue market returns and analysts' forecast errors for a sample of seasoned equity issues between 1975 and 2004 and find that offering-year firm-specific discretionary accruals can partially explain these anomalous capital market outcomes. Nonetheless, I find this predictive power of firm-specific accruals to be more pronounced for issues that occur during 1975 - 1989 compared to issues taking place between 1990 and 2004. Additionally, I find no evidence that investors and analysts are more overoptimistic about the prospects of issuers that have both high firm-specific and industry-specific discretionary accruals (compared to firms with high discretionary accruals in general). The results indicate no role for industry-specific discretionary accruals in explaining overoptimistic expectations from seasoned equity issues and suggest the importance of firm-specific factors in inducing earnings manipulation surrounding equity issues. / Dissertation/Thesis / Ph.D. Business Administration 2011

Previous studies have concluded that mandatory audit firm rotation (MAFR) has not been successful in controlling the outcomes of the auditor-client relationship. Additionally, the literature concludes that high institutional ownership enhances audit quality through monitoring the management-auditor relationship. This paper hypothesizes that better corporate governance in terms of high institutional ownership percentage will enhance audit quality during a MAFR regime. Since countries that have implemented MAFR in the past have their data in their local languages, I use the special case of Arthur Andersen clients based in the US as my treatment group. I carry out a descriptive statistical analysis and run linear OLS regressions with discretionary accruals as a proxy for audit quality as my dependent variable. Results suggest that the percentage of institutional ownership does not have a significant impact on audit quality in a MAFR regime.

Ainda existem muitas controvérsias práticas e acadêmicas sobre o modo adequado de se regular a contabilidade (Cole et al., 2012). Por um lado, autores como Sunder (2009), Schipper (2003) e d\'Arcy (2000) defendem que os padrões mais flexíveis (aqueles baseados em princípios) aumentam a variabilidade do produto final dos relatórios financeiros e como consequência diminuem a sua comparabilidade. Agoglia et al. (2011) e Collins et al. (2012), por outro lado, encontraram evidências empíricas exatamente do contrário, ou seja, os padrões baseados em princípios geraram resultados menos discrepantes, o que poderia sugerir uma maior comparabilidade dos relatórios financeiros. Nesta pesquisa, o objetivo foi avaliar diretamente o impacto de um movimento de flexibilização regulatória contábil sobre a comparabilidade dos relatórios financeiros. O país escolhido para análise foi o Brasil, pois ele foi um dos poucos países no mundo em que houve um processo radical de mudança regulatória de um padrão totalmente baseado em regras com forte vinculo com a contabilidade fiscal (Lopes, 2011) para um padrão baseado em princípios com maior necessidade de julgamento por parte dos gestores que elaboram os relatórios financeiros. Para medir a comparabilidade foi utilizado o modelo de similaridade da função contábil desenvolvido por DeFranco et al. (2011) e outras medidas alternativas para análise de sensibilidade. Para medir o impacto da flexibilização regulatória foram utilizados dois modelos. O primeiro modelo separou o período de transição por ano e comparou os resultados obtidos nos anos 2006 a 2012 individualmente com o período de referência 2004 e 2005. O segundo modelo separou o antes e o depois do impacto da adoção das normas internacionais que ocorreu em 2010. As companhias analisadas foram todas as de capital aberto que apresentaram dados completos para o período analisado e possuíam, no mínimo, uma companhia par dentro do mesmo setor de atividades econômicas. Os resultados obtidos comprovam que, na média, não houve uma diminuição significativa do nível de comparabilidade within-country durante o período de transição regulatória nem com o impacto da adoção do padrão IFRS no Brasil. Pelo contrário, houve um aumento da comparabilidade genuína com a adoção do padrão internacional no Brasil para as companhias analisadas nesta pesquisa. Para as medidas alternativas de comparabilidade, a uniformidade de movimentação do lucro (covariação) foi a única que apresentou variação negativa significativa durante o período de transição. Isto reforça o resultado da pesquisa e mostra que enquanto houve uma diminuição no nível de uniformidade dos relatórios financeiros a comparabilidade não diminuiu, contrariamente, aumentou. A principal conclusão deste trabalho é que aumentar o poder discricionário do gestor por meio da flexibilização dos padrões contábeis não diminui a comparabilidade dos relatórios financeiros. / There are still many practical and academic controversies about the proper way to regulate accounting (Cole et al., 2012). On the one hand, authors like Sunder (2009), Schipper (2003) and d\'Arcy (2000) argue that more flexibility allowed in standards (those based on principles) increases the variability of the end product of financial reporting and as a consequence their comparability is reduced. Agoglia et al. (2011) and Collins et al. (2012), on the other hand, found empirical evidences showing exactly the opposite, standards based on principles generated less variability in accounting outcomes, which could suggest a greater comparability of financial reporting. In this research, the objective was to directly assess the impact of a movement in accounting regulatory easing on the comparability of financial reporting . The country chosen for analysis was Brazil because it was one of the few countries in the world where there has been a radical process of regulatory change of a fully rule-based with a strong bond with the tax accounting (Lopes, 2011) for a standard based on principles with greatest need of judment for managers who prepare financial reports. To measure the level of comparability in financial reports this research choosed the model similarity of accounting function developed by DeFranco et al. (2011). To measure the impact of regulatory flexibility two approaches were used. The first approach separated the transition period by year and compared the results obtained in the years 2006 - 2012 with the reference period of 2004 and 2005. The second approach separated the adoption of IFRS in Brazil in two periods, before and after 2010. The companies surveyed were all public corporations with stocks traded in brazilian\'s stock market that had complete data and had at least one pair within the same company sector of economic activities. The results shows that, on average for the companies analysed in this research, there was no significant decrease in the level of within-country comparability during the regulatory transition in Brazil. They also show that impact of adopting IFRS was positive rather than negative. This fact proves that there was na increase in genuine accounting comparability with the adoption of international standard in Brazil for the companies analyzed in this research. For the alternative measures of comparability, the earnings co-movement was the only one that showed a significant negative change during the transition period. This reinforces the results of this work and shows that while there was a decrease in the level of uniformity of financial reporting, the genuine comparability has not decreased, in contrast, it rose. The main conclusion of this work is: the increase in the discretion of the manager through the flexibility of accounting standards does not reduce the comparability of financial reporting .