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- Title
- Are the regulatory reforms working?: evidence from audit committee members' selection of auditors.
- Creator
- Looknanan-Brown, Veena., College of Business, School of Accounting
- Abstract/Description
-
The Sarbanes-Oxley Act made audit committees directly responsible for the appointment, compensation, and supervision of companies' auditors. Limited research in the auditor selection process and PCAOB inspections suggest that managers, not audit committees, may still be selecting the auditors, and that inspection reports are not useful. This study addresses both of these areas. This paper considers two theories of governance, Agency Theory and Institution Theory, to analyze the audit...
Show moreThe Sarbanes-Oxley Act made audit committees directly responsible for the appointment, compensation, and supervision of companies' auditors. Limited research in the auditor selection process and PCAOB inspections suggest that managers, not audit committees, may still be selecting the auditors, and that inspection reports are not useful. This study addresses both of these areas. This paper considers two theories of governance, Agency Theory and Institution Theory, to analyze the audit committee members' auditor selection process. The study examines whether Audit Committee Members use two specific types of audit quality indicators, other than managers' recommendation, in evaluating auditors. In a setting where the manager recommends the auditor, the auditors' inspection results (favorable/unfavorable) and a prior manager/auditor affiliation (absent/present) are manipulated in a between-subject research design, using financially literate professionals as a proxy for audit committee members. The study finds that audit quality perception and auditor selection are jointly determined. Inspection results are positively associated with audit quality perception and auditor selection. The nature of a manager-auditor affiliation is directly associated with audit quality perception and inversely related to auditor selection. Further, controlling for perception, audit committee members are more likely to recommend auditors with unfavorable inspection results, if a prior affiliation with management is present than if an affiliation is absent. Overall, the results indicate that audit committee members are diligent in evaluating auditors, and PCAOB inspection results are useful. The results of this study contribute to the audit committee effectiveness and PCAOB literature.
Show less - Date Issued
- 2011
- PURL
- http://purl.flvc.org/FAU/3318671
- Subject Headings
- Financial services industry, Management, Financial institutions, Law and legislation, Corporate governance, Law and legislation, Auditing, Standards, Corporations, Auditing, Standards
- Format
- Document (PDF)
- Title
- Asset securitization by non-financial firms: motivation and market valuation.
- Creator
- Huang, Qianyun., College of Business, School of Accounting
- Abstract/Description
-
This dissertation examines several research questions relating to securitization by non-financial firms. Finance theories suggest securitization is most beneficial when there is high demand for liquidity. On the other hand, empirical studies have shown that firms engage in securitization to manage earnings. I find that liquidity demand, not the incentive for earnings management motivates securitization transactions by non-financial firms. I also evaluate whether earnings management in...
Show moreThis dissertation examines several research questions relating to securitization by non-financial firms. Finance theories suggest securitization is most beneficial when there is high demand for liquidity. On the other hand, empirical studies have shown that firms engage in securitization to manage earnings. I find that liquidity demand, not the incentive for earnings management motivates securitization transactions by non-financial firms. I also evaluate whether earnings management in securitization is indeed undesirable from a shareholder's perspective by examining the economic consequences of the practice. Because securitization creates a large infusion of cash, one way to evaluate the economic consequences of earnings management is to examine whether securitization proceeds encourage overinvestment. I find that earnings management in securitization (i.e., recording non-zero securitization income) is unrelated to firms' suboptimal) overinvestment in the post-securitization period. Thus, it appears that earning management in securitization has no negative economic consequence in terms of generating excess securitization proceeds that encourage overinvestment. I also examine the market's valuation of securitizable assets in the accrual components of earnings and the use of securitization proceeds. Because securitizable assets can be converted into cash through securitization, I test whether the market valuation reflects the source of liquidity in securitizable assets that is similar to the cash component of earnings. I find that, for securitization firms, the market valuation of securitizable assets is similar to that of the cash component of earnings., Lastly, I find some evidence supporting the assertion that firms' liquidity prior to securitization influences the market valuation on securitization proceeds retained on the balance sheet, in that the market assigns a discount to retained proceeds for firms with excess liquidity prior to securitiaztion.
Show less - Date Issued
- 2011
- PURL
- http://purl.flvc.org/FAU/3183122
- Subject Headings
- Asset-backed financing, Securities, Mortgage-backed securities, Debt financing (Corporations)
- Format
- Document (PDF)
- Title
- Consequences of real earnings management and corporate governance: evidence from cash holdings.
- Creator
- Greiner, Adam J., College of Business, School of Accounting
- Abstract/Description
-
I examine the impact of real earnings management (REM) and corporate governance on cash holdings. Extant research documents an increase in both cash holdings and REM activity in recent years and shows that agency conflicts influence both the levels and valuations of cash holdings. Motivated by agency problems of REM and Jensen's (1986) arguments concerning the free cash flow problem, I investigate whether opportunistic asset sales and reductions in discretionary expenditures are associated...
Show moreI examine the impact of real earnings management (REM) and corporate governance on cash holdings. Extant research documents an increase in both cash holdings and REM activity in recent years and shows that agency conflicts influence both the levels and valuations of cash holdings. Motivated by agency problems of REM and Jensen's (1986) arguments concerning the free cash flow problem, I investigate whether opportunistic asset sales and reductions in discretionary expenditures are associated with levels and valuations of cash holdings. Prior research also shows that strong corporate governance mitigates opportunistic earnings management behavior and enhances the valuation of cash holdings. Using empirical models from prior research, I document that REM is positively associated with cash holdings, investors discount cash holdings of high REM firms, and, among high REM firms, valuations of cash holdings of weak corporate governance firms are discounted significantly lower relative to those of strong corporate governance firms. My study unites two lines of research by incorporating agency problems concerning REM with levels and valuations of cash holdings.
Show less - Date Issued
- 2013
- PURL
- http://purl.flvc.org/fcla/dt/3360788
- Subject Headings
- Econometrics, Corporate governance, Corporations, Corrupt practices, Corporations, Finance, Accounting, Industrial management
- Format
- Document (PDF)
- Title
- Developing and protecting the "golden idea" in new high-tech ventures: entrepreneurs and advisors.
- Creator
- Fanimokun, Abiola Omoyeni., College of Business, Department of Management
- Abstract/Description
-
The preoperational stage of a new venture is characterized by concept definition, idea enhancement, and strategy formulation. Entrepreneurs consult advisors in knowledge sharing activities. Trust is dominant in these entrepreneur-advisor relationships as entrepreneurs rely on an advisor's judgment to keep venture ideas away from competitors. However, the relationships between trust, knowledge sharing, and knowledge security during the preoperational stage of a new high-tech venture are not...
Show moreThe preoperational stage of a new venture is characterized by concept definition, idea enhancement, and strategy formulation. Entrepreneurs consult advisors in knowledge sharing activities. Trust is dominant in these entrepreneur-advisor relationships as entrepreneurs rely on an advisor's judgment to keep venture ideas away from competitors. However, the relationships between trust, knowledge sharing, and knowledge security during the preoperational stage of a new high-tech venture are not directly examined in many research studies. Concerning types of trust, McAllister (1995) defines two types of interpersonal trust: affective trust, which develops from emotional bonds between individuals, and calculative trust, which is based on an individual's level of competence and reliability. The present study applies McAllister's (1995) theory of types of trust to Kale, Singh, and Perlmutter (2000) findings to examine how trust relationships between entrepreneurs and advisors affect knowledge sharing and an entrepreneur's use of NDAs. This dissertation's research primary question is, "How does trust between an entrepreneur and advisors affect knowledge sharing and choices of knowledge security mechanisms during the preoperational stage of a new high-tech venture?" I used de Koning and Muzyka's (1999) classification of the entrepreneur's social context to define three advisor types: Close Friends, Business Associates, and Licensed Professionals. Linking these types with literature on trust and knowledge, I hypothesize seven relationships dealing with trust, knowledge sharing, and knowledge security. I used structured and non-structured interview formats to collect data on 143 entrepreneur/advisor relationships in South Florida., The results confirmed that relationship length significantly contributed to affective trust and entrepreneurs were more likely to share knowledge with Business Associates than with Close Friends or Licen found t o be the dominant form of trust driving knowledge sharing but affective trust was not significantly found to impact the use of NDAs. Entrepreneurs expected all advisor types to be competent, experienced, and skilled, reporting nonsignificant differences in calculative trust across advisor types. I did not find the use of NDAs to be associated with any particular advisor type. Rather, NDAs were seldom used during the preoperational stage for reasons such as the entrepreneurs' desires to maintain positive relationships with advisors, along with their reliance on a strong institutional background.
Show less - Date Issued
- 2010
- PURL
- http://purl.flvc.org/FAU/2100577
- Subject Headings
- Interpersonal relations, Business etiquette, Organizational behavior, Entrepreneurship, New business enterprises, Creative ability in business, Disclosure of information, Knowledge management
- Format
- Document (PDF)
- Title
- Growth options in mergers.
- Creator
- Davis, Sean M., College of Business, Department of Finance
- Abstract/Description
-
This dissertation is a growth options analysis of high tech mergers. I analyze the impact growth options have on the likelihood of a high tech firm being acquired, the premiums paid for these acquisitions, and the synergies that result from these mergers. I examine how proxies for growth options interact with those for the resources needed to fund growth. A significant part of my analysis involves developing and examining a new growth options proxy, Gamma, the return on investment a firm...
Show moreThis dissertation is a growth options analysis of high tech mergers. I analyze the impact growth options have on the likelihood of a high tech firm being acquired, the premiums paid for these acquisitions, and the synergies that result from these mergers. I examine how proxies for growth options interact with those for the resources needed to fund growth. A significant part of my analysis involves developing and examining a new growth options proxy, Gamma, the return on investment a firm realizes in growth options value from its R&D expenditures. I find that firms that are better than their peers in converting R&D into growth options value, i.e. they have high Gamma, are more likely to be targeted for acquisition than low-Gamma firms. The premiums paid are impacted most by the characteristics of the deal, primarily when deals are competitive, and GDP growth. The acquirer's Gamma, however, is very significant in predicting premiums. Acquiring firms with high Gamma pay significantly lower premiums. The synergies that result from a merger are measured in short and long run returns, and most mergers result in value destruction to the combined firm. In the fewer than 20% of the mergers that resulted in positive long run abnormal returns, the premium paid and whether the deal was competitive significantly reduced the returns. However the two characteristics that significantly increased returns were the acquirer's Gamma and if the acquirer and target had complementary characteristics for growth options levels and free cash flow.
Show less - Date Issued
- 2011
- PURL
- http://purl.flvc.org/FAU/3357425
- Subject Headings
- Consolidation and merger of corporations, Corporations, Finance, Conglomerate corporations
- Format
- Document (PDF)
- Title
- Large shareholder heterogeneity: the effect on firms' accounting quality and information asymmetry.
- Creator
- Trainor, Joseph E., College of Business, School of Accounting
- Abstract/Description
-
I investigate the association between large shareholder heterogeneity and firms' accounting quality and information asymmetry. Specifically, I construct three measures of ownership heterogeneity based on the type, size, and monitoring aggressiveness of large shareholders present in a firm. Applying these three measures of heterogeneity, I examine whether large shareholder heterogeneity is associated with the variation in firms' accounting quality and information asymmetry. I also examine new...
Show moreI investigate the association between large shareholder heterogeneity and firms' accounting quality and information asymmetry. Specifically, I construct three measures of ownership heterogeneity based on the type, size, and monitoring aggressiveness of large shareholders present in a firm. Applying these three measures of heterogeneity, I examine whether large shareholder heterogeneity is associated with the variation in firms' accounting quality and information asymmetry. I also examine new block formations to provide evidence on the consequences of large shareholder investment on firms' accounting quality and information asymmetry. I find that the monitoring aggressiveness of large shareholders is positively associated with firms' accounting quality and information asymmetry. These findings suggest that large aggressive shareholders constrain earnings management, but contribute to firms' overall information asymmetry. Further, using new blockholder data, I find that investments by large aggressive shareholders are positively associated with firms' accounting quality and firms' information asymmetry in the post investment period. This finding provides additional support to my hypotheses that large shareholders play an important role in firms' accounting quality and information asymmetry.
Show less - Date Issued
- 2011
- PURL
- http://purl.flvc.org/FAU/3322515
- Subject Headings
- Investment analysis, Financial services industry, Organizational effectiveness, Measurement, Total quality management
- Format
- Document (PDF)
- Title
- Level of consumer acculturation and the moderating effects of place of birth, and dominant culture on attitudes toward money.
- Creator
- Torres, Luis Eduardo., College of Business, Department of Marketing
- Abstract/Description
-
Although growth in the Hispanic population and its buying power has outpaced by far non-Hispanic U.S. growth in the last decade, only a limited amount of attention has been given to study consumer acculturation among Hispanic subcultures. That lack of research represents one of the biggest gaps in the ethnic marketing literature. Previous research has shown that leveln of acculturation is one of the best ways to segment markets, yet key concepts in the acculturation literature have been used...
Show moreAlthough growth in the Hispanic population and its buying power has outpaced by far non-Hispanic U.S. growth in the last decade, only a limited amount of attention has been given to study consumer acculturation among Hispanic subcultures. That lack of research represents one of the biggest gaps in the ethnic marketing literature. Previous research has shown that leveln of acculturation is one of the best ways to segment markets, yet key concepts in the acculturation literature have been used interchangeably (Wallendorf & Reilly, 1983 ; Metha & Belk, 1991 ; Hui, Laroche and Kim, 1998 ; Webster, 1994 ; Penaloza, 1994 ; Laroche, Kim, Hui, and Tomiuk, 1998 ; Ogden, Ogden & Schau, 2004). This research clarifies such concepts and studies the effects of level of acculturation on attitudes toward money among Mexican Americans. Findings suggest that one of the sub-processes of acculturation, integration, can be effectively used to predict Mexican American attitudes toward money. Results address the need of a better understanding of consumption among Hispanic Americans. The importance of research in this area is underlined for public administrators, marketing managers and scholars alike.
Show less - Date Issued
- 2012
- PURL
- http://purl.flvc.org/FAU/3356017
- Subject Headings
- Target marketing, Consumer behavior, Hispanic American consumers, Hispanic Americans, Cultural assimilation
- Format
- Document (PDF)
- Title
- Target stock price runup prior to acquisitions.
- Creator
- Brigida, Matthew David., College of Business, Department of Finance
- Abstract/Description
-
Information leakage before full acquisitions has been widely documented. The information leakage, and the resulting pre-bid runup in the target's stock, generally increases the total cost of the acquisition. That is, information leakage and the ensuing pre-bid runup is a gain to the target and loss to the acquirer. Herein, I first ascertain the characteristics of full acquisitions that affect the amount of information leakage. I find that if the acquirer borrows to finance the acquisition...
Show moreInformation leakage before full acquisitions has been widely documented. The information leakage, and the resulting pre-bid runup in the target's stock, generally increases the total cost of the acquisition. That is, information leakage and the ensuing pre-bid runup is a gain to the target and loss to the acquirer. Herein, I first ascertain the characteristics of full acquisitions that affect the amount of information leakage. I find that if the acquirer borrows to finance the acquisition then information leakage is greater. Further if the acquirer is foreign, if the target is a high-tech firm, and if the target has options on its stock all increase information leakage. I find hostile deals are effective in reducing information leakage. Lastly, information leakage increases in the percentage of managerial ownership. I next hypothesize that the identity and intent of partial acquirers is known to market participants before the announcement of a partial acquisition. I find that the market can anticipate whether a partial acquirer intends to fully-acquire or take an active role in the management of the target. Also, the market anticipates whether the acquirer is a private investment find or a non-financial corporation. Further, the acquirer's identity or intent is fully reflected in the target's stock price before the announcement of the partial acquisition. These results help explain why there are few partial acquisitions as precursors to full acquisitions., I next hypothesize that macroeconomic factors affect information leakage, and may serve as a signal of when to speculate on acquisitions. I find that information leakage is positively related to shocks in both expected economic conditions and financing costs, the latter signaling to speculators that acquisitions are imminent. I also find information about an imminent full acquisition is leaked earlier when there are positive shocks to economic conditions and financing costs.
Show less - Date Issued
- 2009
- PURL
- http://purl.flvc.org/FAU/368613
- Subject Headings
- Consolidation and merger of corporations, Negotiation in business, Investment analysis, Stocks, Prices, Securities industry, Corrupt practices
- Format
- Document (PDF)
- Title
- What is old is new again: the role of discontinuity in nostalgia-related consumption.
- Creator
- Rutherford, Jana., College of Business, Department of Marketing
- Abstract/Description
-
A 'wave of nostalgia' has gripped the US leading to nostalgic fashions, furniture, television programming and even food. The marketing literature suggests that nostalgic-related consumption is the result of an aging population. It has been proposed that the purchase of nostalgic-products and services is an attempt by mature consumers to return psychologically to the ease, certainties and conflict free periods that existed or seemed to exist during their childhood or adolescence. This paper...
Show moreA 'wave of nostalgia' has gripped the US leading to nostalgic fashions, furniture, television programming and even food. The marketing literature suggests that nostalgic-related consumption is the result of an aging population. It has been proposed that the purchase of nostalgic-products and services is an attempt by mature consumers to return psychologically to the ease, certainties and conflict free periods that existed or seemed to exist during their childhood or adolescence. This paper proposes that discontinuity, as argued by Davis (1979), is a better explanation for why people develop a preference for and consume nostalgic goods. Although some insights have been developed, research focused only on mature consumers and is rather limited in offering alternative explanations for the evocation of nostalgic feelings. MANCOVA was the primary method used to test hypotheses. Findings of this study indicate that discontinuity does not necessarily lead to nostalgia and preference for nostalgic products varies.
Show less - Date Issued
- 2010
- PURL
- http://purl.flvc.org/FAU/2683126
- Subject Headings
- Consumption (Economics), Social aspects, Consumer behavior, Commercial products, Psychological aspects, Nostalgia, Economic aspects, Material culture, Popular culture
- Format
- Document (PDF)
