Background – In the year of 2000 the European Commission adopted a communication called EU Financial Reporting Strategy: the Way Forward. The communication intended to make all listed companies within the EU arrange their financial statements in accordance with International Accounting Standards by 2005 at the latest. When the amendments of IFRS 3 was introduced in March 2004 it meant that companies from that moment on, when acquiring another company, have to allocate the part of the purchase price assignable to customer contracts and the related customer relationships as an intangible asset. Problem discussion – IFRS 3 does not give any guidance whatsoever on how to accomplish the above described allocation and estimate a true and fair value of customer contracts and relationships. Let alone any direction regarding the establishment of the remaining useful life of the customer relationships and contracts, which constitutes the foundation of the fair valuation but also a true and fair view regarding amortizations. Purpose – The purpose of this thesis is to examine how the establishments regarding remaining useful life of customer relationships and contracts have been done. Furthermore, the purpose of this thesis is to explain the decision process and motives that results in why management choose to apply the specific remaining useful life of customer relationships and contracts they do. Method – This study has been carried out with a qualitative approach involving two listed group companies within three different industries, hence, six companies are involved in this thesis. Semi-structured telephone interviews have been made with the companies and the annual reports have been examined. In order to explain the actions behind the valuation and establishment process, the positive accounting theory has been used. Conclusion – None of the six companies taking part in this study have applied an outspoken method for the establishment of the remaining useful life of the customer relationships and contracts and only half of the companies have identified different customer groups. A relation can be identified between using an external consultant and applying different remaining lives for different customer groups. All companies amortize the customer relationships and contracts on a straight-line basis. This can be explained by the positive accounting theory to some extent. All companies applied straight-line amortization even though some of them actually admit that a declining balance would provide a fairer view. Furthermore, long amortization plans are used in some companies in order to decrease the amortization costs and hence increase the net income. Positive accounting has been applied in order to shift reported earnings. / Bakgrund – Under år 2000 beslutade den Europeiska kommissionen om att anta ett förslag som hette EU Financial Reporting Strategy: the Way Forward. Antagandet av förslaget innebar att alla noterade bolag inom EU skulle presentera sin redovisning och sina årsredovisningar i linje med bestämmelserna i IAS – International Accounting Standards senast år 2005. När lagändringarna i IFRS 3 introducerades i mars 2004 innebar det att noterade bolag vid företagsförvärv fortsättningsvis skulle allokera den del av köpeskillingen som är hänförlig till kundkontrakt och relaterade kundrelationer som immateriell tillgång i balansräkningen. Problemdiskussion – IFRS 3 ger ingen vägledning överhuvudtaget med avseende på hur bolagen ska genomföra den ovan beskrivna allokeringen och uppskatta ett rättvist värde på kundkontrakt och kundrelationer. Inte heller finns det någon anvisning angående fastställandet av livslängd på kundkontrakt och kundrelationer som i sin tur ligger till grund för en rättvis värdering och en rättvis avskrivningsplan. Syfte – Syftet med den här uppsatsen är att undersöka hur fastställandet av livslängden på kundrelationer och kundkontrakt har utförts. Syftet är även att förklara beslutsprocessen och de bakomliggande motiven till varför företagsledningen väljer att använda den livslängd på kundrelationer och kundkontrakt de faktiskt gör. Metod – Studien har genomförts med en kvalitativ ansats som har involverat två noterade koncernbolag inom tre olika branscher, totalt har alltså sex bolag medverkat i uppsatsen. Semistrukturerade telefonintervjuer har gjorts med de involverade bolagen och även deras årsredovisningar har undersökts. För att kunna förklara handlandet angående värderingsprocessen och livslängdsprocessen har den positiva redovisningsteorin använts. Slutsats – Inget av de sex bolagen som medverkat i studien har använt sig av någon etablerad metod för att fastställa den återstående livslängden av kundrelationerna och kundkontrakten, och endast hälften av företagen har identifierat olika grupper av kunder. Ett samband har identifierats mellan att använda sig av en extern konsult vid fastställandet och att använda sig av olika återstående livslängder för olika kundgrupper. Alla sex företagen använder sig av linjär avskrivning på kundkontrakten och kundrelationerna. Detta kan till en viss gräns förklaras med positiv redovisningsteori. Alla företagen har använt sig av linjär avskrivning även om vissa av företagen till och med medger att degressiv avskrivning skulle ge en mer rättvis bild. Dessutom har långa avskrivningstider använts i en del av företagen för att sänka avskrivningskostnaderna som i sin tur ökar resultatet. Positiv redovisningsteori har alltså använts för att flytta vinster till innevarande år.

The purpose of this paper is to explore problems in current GAAP, including earnings management and illogical accounting practices. The paper then looks at proposed solutions to these problems, but shows how, from a creditor's perspective, these solutions fall short. My conclusion is that by creating two sets of GAAP, one for large publicly traded companies and one for smaller privately held companies, financial statements will be more representationally faithful for the creditors utilizing the financial statements.

This thesis presents a new methodology based on directly measuring user behavior and making decisions based on experimental results. I have built and tested a tool which will enable researchers to use the methodology to determine whether particular financial statement presentations are more beneficial than others. The tool records user movement on a computer screen with mouse tracking, which allows researchers to track user behavior in greater detail than ever before. The methodology was tested on a subject pool of non-professional financial analysts and junior professionals, who were presented with a company’s financial data in the current GAAP and a new proposed FASB presentation format. The results show that this methodology could be useful in differentiating between present GAAP and proposed alternatives.

This paper will examine the history of international accounting that eventually led to the adoption of IFRS in the European Union. It will have an in depth analysis of IFRS and what it may mean for the United States should there be an adoption or a convergence. It will also comment on what needs to be considered in the convergence or adoption process.

This thesis investigates open market repurchase announcements by Toronto Stock Exchange (TSX) listed firms. First, I develop a comprehensive database of normal course issuer bids (NCIB) and report descriptive data on repurchasing activity between 1994 and 2005. I find that repurchase programs peak in 2000 and then decline. I also find evidence that repurchase programs are concentrated in certain industries. Next, using Compustat data, I investigate the characteristics of firms announcing repurchase programs. I find evidence that firms who announce repurchase programs are large in size and have high operating cash flows, low leverage, low share turnover and low dividend yields. I extend the repurchases literature by demonstrating that firms with low trading volume are more likely to initiate repurchase programs, consistent with an attempt to improve sell side liquidity. Finally, I investigate the market reaction to NCIB announcements. The results indicate that TSX firms experienced a significant market reaction to repurchase announcements between 1994 and 2005 as measured by both return and volume tests. I extend the repurchases literature by showing that announcement returns are higher for firms who followed through on their previous repurchase announcements. Little evidence exists of investor response to the disclosed reasons for repurchase programs.

This thesis examines the Government Accounting Standards Board by considering its history, current structure, and treatment of a current accounting standards debate. It then uses this examination to make recommendations as to reforms of the GASB and government accounting.

This thesis investigates open market repurchase announcements by Toronto Stock Exchange (TSX) listed firms. First, I develop a comprehensive database of normal course issuer bids (NCIB) and report descriptive data on repurchasing activity between 1994 and 2005. I find that repurchase programs peak in 2000 and then decline. I also find evidence that repurchase programs are concentrated in certain industries. Next, using Compustat data, I investigate the characteristics of firms announcing repurchase programs. I find evidence that firms who announce repurchase programs are large in size and have high operating cash flows, low leverage, low share turnover and low dividend yields. I extend the repurchases literature by demonstrating that firms with low trading volume are more likely to initiate repurchase programs, consistent with an attempt to improve sell side liquidity. Finally, I investigate the market reaction to NCIB announcements. The results indicate that TSX firms experienced a significant market reaction to repurchase announcements between 1994 and 2005 as measured by both return and volume tests. I extend the repurchases literature by showing that announcement returns are higher for firms who followed through on their previous repurchase announcements. Little evidence exists of investor response to the disclosed reasons for repurchase programs.

<p>This paper examines the role of earnings management for firms that report at least three consecutive years of annual earnings increases (hereafter earnings string firms). Specifically, I examine how levels of earnings management change as earnings string firms approach the end of their earnings string patterns. My results show that earnings string firms engage in income-increasing earnings management consistent with an attempt to stretch these earnings string patterns. I also examine whether the cumulative effect of income-increasing earnings management activities during the earnings string period reduces the ability of these firms to continue reporting earnings increases. I do not find evidence to suggest that earnings string firms, on average, break their earnings string patterns because they ran out of accounting flexibility. However, there are two instances which the accumulated effect of income-increasing earnings management increases the likelihood of ending the earnings string. The two instances relate to firms which repeatedly engage in income-increasing earnings management throughout the earnings string period, and firms whose pre-managed earnings decline in the last year of the earnings string period. Finally, I show that firms that resume a subsequent series of reporting at least three consecutive years of annual earnings increases, on average, exhibit similar earnings management behavior. That is, these firms also increasingly resort to income-increasing earnings management toward the end of their second (or third) earnings strings.</p> / Dissertation

<p>While a considerable body of research examines the determinants of financial reporting decisions, much of the heterogeneity in financial reporting outcomes is not explained by firm and industry factors. Guided by the Upper Echelons perspective of Hambrick and Mason (1984), I examine the relation between the presence of a financial expert, defined as either a CEO or a CFO with an accounting background and earnings quality. I propose that the coupling of decision rights and domain-specific knowledge supports the team's influence discretionary reporting choices, controlling for incentives, corporate governance and firm-specific factors. I find that in the pre Sarbanes Oxley era, executive teams with financial expertise have higher discretionary earnings quality as measured by smaller absolute abnormal accruals; however, this relation is eliminated in the period following Sarbanes Oxley. Building on research that proposes that accruals management and real activities management are substitutes, I examine four proxies for real activities management and do not find evidence of a relation between firms with executive teams with financial expertise and these proxies for real activities management.</p> / Dissertation

This study traces the development of the American public accounting profession from 1927 to 1962. Over the course of these thirty-five years, accounting evolved from an insular, divided group whose professional competence and independence was doubted, even by its own members, to one that spoke with one united national voice, proudly asserted its ability to take on additional responsibilities, and had cemented an essential place in the American economy. The study makes use of archival sources, included large portions of the papers of George O. May, the doyen of the old Wall Street elite whose correspondence into the 1950's reflects the profession's development, and provides the first study of the accounting profession's response to the union corruption scandals. I look at the major events that caused this evolution, including the writings of William Z. Ripley, the New Deal and the creation of the Securities and Exchange Commission, the McKesson-Robbins scandal, the Second World War, the postwar economic expansion, and the union corruption scandals. I show how these events forced the profession to accept the responsibilities American society demanded of it, and how the leadership of the profession passed from a Wall Street-centered elite that styled itself after a British ideal of the professional as a disinterested, independent gentleman who did not promote himself and whose integrity and expertise did not require rigid rules of conduct, to a new generation that embraced a more modern ideal of the professional, one who followed strict rules of conduct and educational requirements, and who embraced a broader vision of public accountancy's responsibilities to American society, as evidenced by the prominent public role the American Institute of CPA's took when Congress looked to impose stricter regulations on trade unions and pensions in the wake of the union corruption scandals of the late 1950's. Finally, I evaluate the consequences of this evolution, consequences that I believe persisted into the twenty-first century with the debate over non-audit services in the wake of the Enron scandal.