Accounting Theory - Analytical Models eJournal最新文献

{"title":"Asset Impairment Model, Monitoring, and Investment Decisions: Evidence from Regression Kink Design","authors":"S. Ahn, Yupeng Lin, Hojun Seo","doi":"10.2139/ssrn.3950063","DOIUrl":"https://doi.org/10.2139/ssrn.3950063","url":null,"abstract":"We examine whether the application of the asset impairment model spurs monitoring activities and investment decisions for long-term growth. For identification, we use the regression kink design (RKD) and focus on a narrow window around a point at which a firm’s book-to-market ratio of assets (BTM) equals 1. We first show that the sensitivity of asset impairments to the BTM ratio substantially increases when the BTM ratio exceeds 1, identifying the kink point where the application of the asset impairment model is triggered. We then test whether monitoring and investment activities change around the kink point. We find an increase in shareholder voting against management and an increased likelihood of forced CEO turnover around the kink point. We also find increased R&D investments but decreased over-investments in capital expenditures and acquisitions around the kink point. Further analyses reveal that patent filings and patent values increase at the kink point.","PeriodicalId":115534,"journal":{"name":"Accounting Theory - Analytical Models eJournal","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-10-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133875591","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Prudential Regulation under CECL: Cycle Turns and Reward/Risk Combinations","authors":"Tong Lu, Lanyi Zhang","doi":"10.2139/ssrn.3735135","DOIUrl":"https://doi.org/10.2139/ssrn.3735135","url":null,"abstract":"This study investigates the implications of the current expected credit losses<br>(CECL) model for capital requirements in prudential regulation, and demonstrates<br>the interaction between the dual role (valuation role and regulatory role)<br>of CECL. In contrast with the conventional wisdom that stresses only credit supply<br>to the real sector, the risk attribute of loan portfolios, and countercyclical<br>capital requirements, we highlight the balance between two functions of banks<br>(both credit supply to the real sector and liquidity provision to households) and<br>derive the optimal capital requirements under CECL that are contingent on (1)<br>the combination of reward and risk attributes of loan portfolios, and (2) cycle<br>turns.","PeriodicalId":115534,"journal":{"name":"Accounting Theory - Analytical Models eJournal","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-06-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127888322","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Principles-Based Accounting – A Practical Enquire Into the Concept Based on Related Party Transactions Disclosures","authors":"D. Beerbaum","doi":"10.2139/ssrn.3839052","DOIUrl":"https://doi.org/10.2139/ssrn.3839052","url":null,"abstract":"The International Financial Reporting Standards (IFRS) are followed and adopted in more than 140 jurisdictions worldwide nowadays. This tremendous success for the last 20 years in terms of worldwide coverage is also attributable to the main principles-based character of IFRS. This also makes mainly a difference to its “sister” Accounting Standards United States Generally Accepted Accounting Principles (US-GAAP), which is rule-based. All attempts that for U.S. companies it would be allowed to follow IFRS, did not succeed, given the litigious nature of the society of the United States to introduce a principle-based system has barriers, as fundamentals of the Case-laws would need to be restructured and changed. This research paper will look into the practical application and implication of accounting based on principles with the case of related part transactions disclosures. Many of the most well-known accounting scandals were associated to related party transactions (RPT) such as Enron, Wordcom or Parmalat. In general, there are two contrasting views on RPT: they represent either conflicts of interest as they can violate against management’s agency responsibility to shareholders or supervisory board purpose of monitoring. This view is the conflict of interest hypothesis and can be derived from agency theory by Berle and Means (1932) and Jensen and Meckling (1976). The alternative view is the efficient transactions hypothesis, which assumes that RPT efficiently fulfill underlying economic needs of the company, as they represent possibilities to achieve lower refinancing costs. This article will practically enquire into the concept of principles-based accounting. In this research paper, what implies principles-based accounting is inquired considering practical disclosure cases. Many accountants share the expectation that a standard should define disclosure rules, which companies should follow, however principles-based accounting is still after so many years new and challenging. Principles-based accounting requires the accountant to look into the standard and get an understanding what are the principles to comply with and to look through the underpinning of the standard. A lot of tools support the accountants to comprehend the meaning of the standard such as disclosure checklist or the IASB XBRL taxonomy. However, these can never fully substitute the prerequisite to fully comprehend and look into the essence of the principle laid down in the specific standard.","PeriodicalId":115534,"journal":{"name":"Accounting Theory - Analytical Models eJournal","volume":"80 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126995172","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Effects and Value of Financial Information Under a Power Utility CAPM","authors":"D. Johnstone","doi":"10.2139/ssrn.3827485","DOIUrl":"https://doi.org/10.2139/ssrn.3827485","url":null,"abstract":"Using a distribution-free \"payoffs\" CAPM derived under power utility, we examine the parameters of the payoff distribution that have greatest effect on the market equilibrium price, cost of capital and investor welfare. Results are necessarily all numerical, and are obtained by simulating from lognormal and normal payoff distributions. Those distributions are calibrated to approximate the empirical probability distribution of returns and payoffs on the S&amp;P500. The overriding result is that the benefits to investors of better information arise most strongly via better estimates of the mean payoff. Estimation risk surrounding the payoff risk or variance prove surprisingly much less important. That result under our CRRA CAPM replicates similar results in finance under the conventional CARA mean-variance CAPM. We also confirm the inherent disconnection under equilibrium between the market cost of capital and investor welfare. <br>","PeriodicalId":115534,"journal":{"name":"Accounting Theory - Analytical Models eJournal","volume":"140 ","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-04-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133455759","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Audit Committee Independence and Auditor-Manager Disputes","authors":"Sandra Kronenberger, Sebastian Kronenberger, Minlei Ye","doi":"10.2139/ssrn.3671569","DOIUrl":"https://doi.org/10.2139/ssrn.3671569","url":null,"abstract":"Conventional wisdom suggests that audit committee independence can strengthen auditor independence, increase audit quality, and thereby improve financial reporting quality and shareholders' value. Built on a one-period strategic model, this paper analyzes the role of audit committee independence in resolving disagreements between management and the auditor regarding financial reporting. We find that an audit committee may always agree with management irrespective of its independent level if underinvestment is more costly. Otherwise, a partially independent audit committee is indifferent between agreeing with the auditor or management. The optimal level of audit committee independence that maximizes shareholders' value is affected by the trade-off between the losses of underinvestment and overinvestment, as well as the strategic interactions of shareholders, managers, auditors, and audit committees.","PeriodicalId":115534,"journal":{"name":"Accounting Theory - Analytical Models eJournal","volume":"55 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131479406","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Accounting Information and Risk Shifting with Asymmetrically Informed Creditors","authors":"Tim Baldenius, Mingcherng Deng, Jing Li","doi":"10.2139/ssrn.3750846","DOIUrl":"https://doi.org/10.2139/ssrn.3750846","url":null,"abstract":"This paper explores the effects of public information (e.g., accounting earnings) in a competitive lending setting where the borrower can engage in risk shifting. If a privately informed \"inside\" creditor bids against outsider creditors, public information levels the playing field with nontrivial effects on bidding and risk-shifting. A perfect public signal would yield the least efficient outcome: introducing some measurement noise alleviates risk shifting by subjecting the outsider to the winner's curse. However, for pessimistic priors about the borrower, greater precision can alleviate risk shifting, locally. We derive conditions under which greater signal precision lowers the probability of creditor turnover and discuss implications for financial reporting regulations along the business cycle.","PeriodicalId":115534,"journal":{"name":"Accounting Theory - Analytical Models eJournal","volume":"67 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132149355","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Complementarity between Signal Informativeness and Monitoring","authors":"Pierre Chaigneau, Nicolas Sahuguet","doi":"10.2139/ssrn.3324589","DOIUrl":"https://doi.org/10.2139/ssrn.3324589","url":null,"abstract":"When assessing managerial ability, a firm can rely on two sources of information: a signal of firm value, such as earnings, and monitoring. We show that a more informative signal can surprisingly increase the value of monitoring. This happens if a more informative signal makes some signal realizations more ambiguous indicators of managerial ability, or if the signal leads to negative belief updating on managerial ability yet does not trigger termination. Then, termination decisions will paradoxically rely less on the signal when it is more informative. In private equity owned firms, the model predicts that monitoring intensity is increasing in signal informativeness conditional on a bad performance. These firms can fall into a \"bad governance trap'' such that a less informative signal is compounded by worse monitoring upon a bad performance.","PeriodicalId":115534,"journal":{"name":"Accounting Theory - Analytical Models eJournal","volume":"105 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124072220","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Information, Insider Trading, Executive Reload Stock Options, Incentives, and Regulation","authors":"David B. Colwell, Dave Feldman, Wei-Yin Hu, M. Pontier","doi":"10.2139/ssrn.3329078","DOIUrl":"https://doi.org/10.2139/ssrn.3329078","url":null,"abstract":"We introduce a theoretical model of executives with insider information who receive executive stock options (ESOs) as incentives and optimize their “outside wealth” portfolios. We show that insider information nullifies ESO incentivizing, misaligning executives’ and shareholders’ interests. We offer realigning methods: granting executives with reload stock options (RSOs) while imposing a blackout trading period. Effective blackouts keep executives incentivized without over-restricting, i.e., reducing executives’ welfare below that of outsiders. We introduce RSO pricing for insider executives and offer policy implications: reestablishing the currently “out of favor” RSOs, allowing firms, not regulators, to set effective blackouts on securities they issue.","PeriodicalId":115534,"journal":{"name":"Accounting Theory - Analytical Models eJournal","volume":"58 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128180202","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Are CEOs’ Purchases More Profitable Than They Appear?","authors":"C. Armstrong, Terrence Blackburne, Phillip J. Quinn","doi":"10.2139/ssrn.3678297","DOIUrl":"https://doi.org/10.2139/ssrn.3678297","url":null,"abstract":"Abstract Little is known about why CEOs voluntarily purchase shares of their firm other than to earn direct profits. Since CEOs are risk-averse, undiversified, and face litigation costs from trading on private information, direct profits are unlikely to be the sole motive—especially since many purchases are ultimately unprofitable. We find that CEOs who have recently purchased shares are less likely to be terminated following poor performance and that this relation varies predictably with (i) their cost of purchasing shares, (ii) the profitability of their prior purchases, and (iii) their board’s access to alternative sources of information about them. We find that some CEOs voluntarily purchase shares despite the cost of foregone diversification—and, sometimes outright unprofitability—to indirectly benefit by prolonging their tenure. Our estimates imply that the average abnormal returns that CEOs earn from their purchases increases from 3% to 58% after incorporating the indirect benefit of prolonged tenure.","PeriodicalId":115534,"journal":{"name":"Accounting Theory - Analytical Models eJournal","volume":"68 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-08-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129993280","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Jock Tax: How the National Football League Can Level the Playing Field","authors":"Mike Dignetti","doi":"10.2139/ssrn.3674527","DOIUrl":"https://doi.org/10.2139/ssrn.3674527","url":null,"abstract":"There are thirty-two NFL teams located across twenty-three different states. State and local tax rates assessed in the different locations range from 0% to 13.3%. NFL teams play at least sixteen games every year, eight of which are played at opposing team’s locations. Due to this, NFL players can be required to file upwards of nine different state and local tax returns per season. This study analyzes the effects the difference in tax rates have on the competitive landscape of the NFL and proposes a solution to eradicate the competitive advantage state and local taxes currently create within the NFL. Specific player contracts and hypothetical player movements are analyzed to demonstrate the actual effects of state and local taxation on NFL players.","PeriodicalId":115534,"journal":{"name":"Accounting Theory - Analytical Models eJournal","volume":"51 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127851329","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}