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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
- Antecedents and consequences of pay disparity between CEO and non-CEO executives.
- Creator
- Pissaris, Seema., Florida Atlantic University, College of Business, Department of Management
- Abstract/Description
-
This dissertation investigates the antecedents and consequences to pay disparity between the CEO and non-CEO executives from an equity-based perspective. While the principles of agency theory suggest that CEOs are granted higher compensation packages to better align their motives to those of the firm's shareholders, empirical research has not supported a positive relationship between rising CEO pay and firm performance. Some results even suggest a negative relationship. This dissertation...
Show moreThis dissertation investigates the antecedents and consequences to pay disparity between the CEO and non-CEO executives from an equity-based perspective. While the principles of agency theory suggest that CEOs are granted higher compensation packages to better align their motives to those of the firm's shareholders, empirical research has not supported a positive relationship between rising CEO pay and firm performance. Some results even suggest a negative relationship. This dissertation argues that if organizational outcomes are determined by the integrated skills and talents of its dominant coalition, and if the management of a firm's trajectory is a shared process, then, the disparity in rewards between the CEO and those that work closest to him becomes an important area of study., The dissertation investigates the antecedents of pay disparity and proposes that the quality of a firm's governance marked by independent boards as well as higher levels of blockholders will be more likely to temper and better align the CEO's compensation and thereby reduce pay disparity. Empirical results support the major propositions as firms with independent Chairman of the Board, fewer interlocking directors, and higher levels of blockholders were found to have lower levels of pay disparity between the CEO and non-CEO executives. Pay disparity was tested both at the firm level and at the individual executive level and both were found have a significant effect on non-CEO executive turnover for up to two years., Central to the dissertation is a moderation model which proposes that pay disparity has a profound effect on an executive team's ability to integrate its diverse experience and educational background, and consequently, its capacity to respond strategically to its changing competitive landscape. The study examines the education, age, tenure and functional background of top management teams of Fortune 500 firms and finds support for the assertion that the positive relationship between heterogeneously composed teams and firm performance is contingent on rewards equality between the CEO and balance of the top team membership. The findings suggest that higher levels of pay disparity attenuate the negative aspects of cognitive diversity serving to impede the firm's competitive performance.
Show less - Date Issued
- 2008
- PURL
- http://purl.flvc.org/FAU/58009
- Subject Headings
- Chief executive officers, Salaries, etc, Corporate governance, Compensation management, Managerial economics
- Format
- Document (PDF)
- Title
- Big 4 global networks: degree of homogeneity of audit quality among affiliates and relevance of PCAOB inspections.
- Creator
- Kassawat, Paulina M., Higgs, Julia, Florida Atlantic University, College of Business, School of Accounting
- Abstract/Description
-
The Big 4 global networks (Deloitte, Ernst & Young [E&Y], KPMG, and PricewaterhouseCoopers [PwC]) market themselves as providers of worldwide seamless services and consistent audit quality through their members. Under the current environment in which these auditors operate, there are three types of global network members: inspected non-U.S. affiliates (inspected affiliates, hereafter), non-inspected non-U.S. affiliates (non-inspected affiliates, hereafter), and inspected U.S. offices (U.S....
Show moreThe Big 4 global networks (Deloitte, Ernst & Young [E&Y], KPMG, and PricewaterhouseCoopers [PwC]) market themselves as providers of worldwide seamless services and consistent audit quality through their members. Under the current environment in which these auditors operate, there are three types of global network members: inspected non-U.S. affiliates (inspected affiliates, hereafter), non-inspected non-U.S. affiliates (non-inspected affiliates, hereafter), and inspected U.S. offices (U.S. offices, hereafter). The recent suspension of the China-based Big 4 affiliates from auditing U.S.-listed companies calls into question whether these global networks can deliver the same level of audit quality across all their members and whether those located in jurisdictions denying access to the Public Company Accounting Oversight Board (PCAOB or Board, hereafter) to conduct inspections may benefit from such inspections. This study examines the effect of being an affiliate and the effect of PCAOB inspections on perceived audit quality. I use earnings response coefficients (ERCs) as a proxy for perceived audit quality.
Show less - Date Issued
- 2015
- PURL
- http://purl.flvc.org/fau/fd/FA00004385, http://purl.flvc.org/fau/fd/FA00004385
- Subject Headings
- Auditing standards -- United States, Business enterprises -- Computer networks, Corporate governance, Disclosure in accounting -- United States, Financial services industry -- Management, Government accountability, Intternational standard on auditing, Public Company Accounting Oversight Board
- Format
- Document (PDF)
- Title
- Cross-border M&A deal incompletion: institutional processes and outcomes.
- Creator
- Yapici, Nilufer, Hudson, Bryant A., Florida Atlantic University, College of Business, Department of Management
- Abstract/Description
-
My objective in this dissertation was to understand the processes leading to incompletion of the high profile cross-border deals. A conceptual framework was developed which suggests that announcement of a cross-border merger and acquisition (M&A) deal starts a string of institutional processes that leads to incompletion of the bid. I proposed that less powerful host country actors threatened by the MNC’s bid proposal politicize the transaction turning the deal into a transgression. These...
Show moreMy objective in this dissertation was to understand the processes leading to incompletion of the high profile cross-border deals. A conceptual framework was developed which suggests that announcement of a cross-border merger and acquisition (M&A) deal starts a string of institutional processes that leads to incompletion of the bid. I proposed that less powerful host country actors threatened by the MNC’s bid proposal politicize the transaction turning the deal into a transgression. These actors publicize this transgression, initiating a scandal, to gather support of multiple audiences in their attempts to thwart the threat that the MNC poses. Thanks to their efforts in appealing to audiences and publicization of the deal as a transgression, these actors mobilize audiences who reveal hostile reaction against the MNC and the proposed bid. Such mobilization and hostile reaction, in turn, lead to proposed bid’s incompletion. Qualitative analysis results based on a sample of seven high profile cross-border transactions provided support for the conceptualized processes, namely politicization, scandal, mobilization and hostile reaction, while indicating a different order of process progression compared to the linear one conceptualized. I found that in all cases the process of scandal subsumed the other processes that kept scandal alive. In turn, scandal fed these processes giving more leverage to the mobilization efforts and/or increasing the hostility of the actors opposing the deal. The findings revealed that these processes happened simultaneously and that in cases where mobilization did not emerge, hostile reaction substituted for the lack of mobilization. Additionally, analysis showed that not only less powerful actors but also powerful actors, elites, sought to initiate a scandal when the host country political, legal or bureaucratic processes did not work for them in thwarting the deal. This dissertation by examining social construction, power and politics within the host country institutional environment in the context of high profile cross-border deals, presented a framework that explained how and why the hostility leading to deal incompletion emerges in the host country. In so doing, this dissertation strengthens institutional theory, theory of scandal, social movements theory and elite theory as powerful perspectives in international strategic -management.
Show less - Date Issued
- 2014
- PURL
- http://purl.flvc.org/fau/fd/FA00004240
- Subject Headings
- Consolidation and merger of corporations, Corporate governance, International business enterprises -- Management
- 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
- Economic Consequences of Implementing the Engagement Partner Signature Requirement in the UK.
- Creator
- Liu, Min, Kohlbeck, Mark, Florida Atlantic University, College of Business, School of Accounting
- Abstract/Description
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I investigate the effects of requiring the audit engagement partner (EP) signature and individual EP’s quality on information asymmetry, analysts’ forecast errors and forecast dispersion. I predict and find that, ceteris paribus, there is a significant decline in information asymmetry, analysts’ forecast errors and forecast dispersion from the pre- to post-EP signature period in the UK over both of short-term (e.g., 2008-2010) and long-term (e.g., 2004-2014). These findings hold when using a...
Show moreI investigate the effects of requiring the audit engagement partner (EP) signature and individual EP’s quality on information asymmetry, analysts’ forecast errors and forecast dispersion. I predict and find that, ceteris paribus, there is a significant decline in information asymmetry, analysts’ forecast errors and forecast dispersion from the pre- to post-EP signature period in the UK over both of short-term (e.g., 2008-2010) and long-term (e.g., 2004-2014). These findings hold when using a control sample approach and a different proxy for the information asymmetry, which indicate that my results are not likely due to the effect of concurrent events and correlated omitted variables. These findings provide timely and important empirical evidence to the ongoing debate about whether the Public Company Accounting Oversight Board should pass a similar requirement in the U.S.
Show less - Date Issued
- 2016
- PURL
- http://purl.flvc.org/fau/fd/FA00004651, http://purl.flvc.org/fau/fd/FA00004651
- Subject Headings
- Auditing -- Standards -- United States, Corporate governance, Corporations -- Auditing -- Standards -- United States, Disclosure in accounting, Financial risk management -- Forecasting, Financial services industry -- Management, International standard on auditing, Public Company Accounting Oversight Board
- Format
- Document (PDF)
- Title
- Imprinting Effects of Founding Conditions, Structure, and Capabilities on Social and Financial Organizational Outcome Satisfaction.
- Creator
- Lortie, Jason, Castrogiovanni, Gary J., Florida Atlantic University, College of Business, Department of Management
- Abstract/Description
-
My work investigates the effects of founding conditions for organizational founders on the eventual satisfaction founders have with the financial and social outcomes of their organization. First, I introduce two new constructs, social salience and economic salience, which represent the intended social or economic goals of the founder for their organization when they found the new organization. I then utilize organizational imprinting theory to argue that the social and economic salience,...
Show moreMy work investigates the effects of founding conditions for organizational founders on the eventual satisfaction founders have with the financial and social outcomes of their organization. First, I introduce two new constructs, social salience and economic salience, which represent the intended social or economic goals of the founder for their organization when they found the new organization. I then utilize organizational imprinting theory to argue that the social and economic salience, along with founders’ previous work experience, influence the structure of the new organization via the legal form. I then argue that the legal form influences the specific capabilities that the organization will acquire or create early in the organization’s life. Finally, I argue that the capabilities established at founding will influence the eventual satisfaction founders currently have with their organizations’ social and financial outcomes as the capabilities endure over time. Based on a sample of 150 organizational founders that are still actively managing their organizations, my results support the idea that founding conditions for individual founders influence the capabilities that their organizations create or acquire. Further, founders’ current level of satisfaction with the financial and social performance of their organizations is significantly related to these capabilities. These results largely support the process based model of imprinting effects on organizational outcomes, and suggest that founders play a critical role in setting the original imprint of an organization that will endure via organizational inertia, perhaps long after the imprint’s originally designed purpose.
Show less - Date Issued
- 2016
- PURL
- http://purl.flvc.org/fau/fd/FA00004655, http://purl.flvc.org/fau/fd/FA00004655
- Subject Headings
- Corporate governance, Organizational change -- Management, Performance -- Management, Performance -- Measurement, Rational expectations (Economic theory), Social entrepreneurship, Strategic planning
- Format
- Document (PDF)
- Title
- The effect of shareholder rights and information asymmetry on option-related repurchase activity.
- Creator
- Golden, Nan, Kohlbeck, Mark, Florida Atlantic University, College of Business, School of Accounting
- Abstract/Description
-
I investigate the effect of shareholder rights and information asymmetry on option-related repurchase activity. Prior research shows that the dilution effect of the exercise of the employee stock options on earnings per share (EPS) decreases the value of stock options. Thus, managers tend to use stock repurchases rather than dividends to return cash to shareholders (the dividend substitution effect). I document that the executive stock option incentives to repurchase stock as a substitute for...
Show moreI investigate the effect of shareholder rights and information asymmetry on option-related repurchase activity. Prior research shows that the dilution effect of the exercise of the employee stock options on earnings per share (EPS) decreases the value of stock options. Thus, managers tend to use stock repurchases rather than dividends to return cash to shareholders (the dividend substitution effect). I document that the executive stock option incentives to repurchase stock as a substitute for dividends are stronger when firms have weak shareholder rights and the level of information asymmetry positively influences managerial stock option incentives to repurchase stock. Furthermore, prior research indicates that information asymmetry is positively associated with stock repurchases. I also provide evidence indicating that the relationship between information asymmetry and stock repurchases is stronger when firms have weaker shareholder rights.
Show less - Date Issued
- 2015
- PURL
- http://purl.flvc.org/fau/fd/FA00004373, http://purl.flvc.org/fau/fd/FA00004373
- Subject Headings
- Corporate governance, Corporations -- Finance, Dividends -- Econometric models, Employee stock options, Investment analysis, Stock options -- Econometric models
- Format
- Document (PDF)
- Title
- The impact of reputation orientation on marketing strategy formation and performance.
- Creator
- Goldring, Deborah, College of Business, Department of Marketing
- Abstract/Description
-
This research explores the attitudes held by marketing managers about building their company's corporate reputation, and about the impact of their actions on performance. In an environment of costly brand building, declining customer loyalty, and increasing scrutiny from stakeholders who demand corporate responsibility and transparency, a concern for corporate reputation is increasingly important for everyone in the company, including marketing managers. The marketing literature, however, has...
Show moreThis research explores the attitudes held by marketing managers about building their company's corporate reputation, and about the impact of their actions on performance. In an environment of costly brand building, declining customer loyalty, and increasing scrutiny from stakeholders who demand corporate responsibility and transparency, a concern for corporate reputation is increasingly important for everyone in the company, including marketing managers. The marketing literature, however, has not explored how managers who are concerned about the reputation of their companies can effectively adapt marketing strategy for reputation enhancement. The theoretical justification for this research is grounded in stakeholder theory, dynamic capabilities theory, and strategic choice theory. The study contributes to the marketing strategy literature and the nascent field of stakeholder marketing. It makes a theoretical connection between the corporate-level construct of reputation orientation, and its impact on functional-level decisions about marketing strategy. Reputation orientation is the concern that top management and employees share about their company's commitment to nurturing a positive corporate reputation among key stakeholders. A scale for reputation was conceptually defined and empirically tested (Churchill, 1979). It consists of three dimensions: consciously created corporate identity, internal identity dissemination, and external stakeholder impact. Reputation orientation was found to be a valid and reliable construct that was further tested within the framework of how marketing managers formulate, implement, and evaluate their strategic marketing decisions. This research also tested the impact of stakeholder-conscious marketing strategy on corporate reputation and marketing performance., The results from the empirical research indicate that organizations with a reputation orientation devise and select marketing strategies that focus on the needs and concerns of customers and other key stakeholders. Reputation orientation guides a stakeholder-conscious marketing strategy, such that marketing strategy decisions take into consideration both the impacts on corporate reputation and marketing performance without sacrificing either. The implications for marketing practice is that marketing managers can deliberately choose marketing strategies that build a strong corporate reputation by considering the concerns of customers and other key stakeholders at the earliest stages of marketing strategy formulation.
Show less - Date Issued
- 2011
- PURL
- http://purl.flvc.org/FAU/3357426
- Subject Headings
- Communication in marketing, Communication in organizations, Corporate image, Management, Business communication, Corporate governance, Industrial management
- Format
- Document (PDF)
- Title
- PCAOB inspections and audit quality evidence from cross-listed securities.
- Creator
- Stewart, Errol G.G., College of Business, School of Accounting
- Abstract/Description
-
In the period leading up to the early 2000s there were a series of large company failures attributed at least in part to audit failures. Consequently, the Sarbanes Oxley Act (SOX) was promulgated in July 2002 to restore confidence in public company financial reporting and the work of auditors. The Public Company Accounting Oversight Board (PCAOB) was established by SOX and appointed as the regulator of the accounting firms that audit the financial statements of public companies. The PCAOB is...
Show moreIn the period leading up to the early 2000s there were a series of large company failures attributed at least in part to audit failures. Consequently, the Sarbanes Oxley Act (SOX) was promulgated in July 2002 to restore confidence in public company financial reporting and the work of auditors. The Public Company Accounting Oversight Board (PCAOB) was established by SOX and appointed as the regulator of the accounting firms that audit the financial statements of public companies. The PCAOB is required to routinely inspect the operations of these accounting firms in an effort to satisfy its mandate to bring about an improvement in the audit quality of these companies. These inspections extend to the non-US auditors of companies that are cross-listed in the US. Despite various mainly US studies on inspections, there is limited evidence that the inspections have resulted in improved audit quality. ... I examine companies whose securities are cross-listed in the US in the periods before and after inspection in order to provide evidence on the benefits of inspections. I find some evidence that inspections improve the audit quality of companies that are cross-listed in the US. This suggests the audit quality of companies from countries that do not permit inspections may be positively affected should inspections be permitted.
Show less - Date Issued
- 2012
- PURL
- http://purl.flvc.org/FAU/3356016
- Subject Headings
- Auditing, Standards, Financial services industry, Management, Corporate governance, Law and legislation, Corporations, Auditing, Standards
- Format
- Document (PDF)
- Title
- Maturity of IT risk management practices and reporting structure: an it manager perspective.
- Creator
- Vincent, Surani, Higgs, Julia, Florida Atlantic University, College of Business, School of Accounting
- Abstract/Description
-
In December 2009, the Securities Exchange Commission (SEC) approved enhanced proxy disclosure rules requiring companies to disclose the board’s leadership structure and the board’s role in risk oversight. Apart from general business risks, boards are increasingly interested in Information Technology (IT) risks as it affects all aspects of the organization (PricewaterhouseCoopers [PwC], 2013). Since the effectiveness of IT risk management depends on senior managers’ actions, this dissertation...
Show moreIn December 2009, the Securities Exchange Commission (SEC) approved enhanced proxy disclosure rules requiring companies to disclose the board’s leadership structure and the board’s role in risk oversight. Apart from general business risks, boards are increasingly interested in Information Technology (IT) risks as it affects all aspects of the organization (PricewaterhouseCoopers [PwC], 2013). Since the effectiveness of IT risk management depends on senior managers’ actions, this dissertation attempts to answer the question of whether the maturity of IT risk management practices (the extent to which management performs particular activities to identify, assess, monitor and respond to IT-related risks) in organizations depends on the Chief Information Office (CIO) reporting structure and the board’s leadership structure.
Show less - Date Issued
- 2014
- PURL
- http://purl.flvc.org/fau/fd/FA00004336, http://purl.flvc.org/fau/fd/FA00004336
- Subject Headings
- Corporate governance, Decision making, Information technology -- Management, Information technology -- Social aspects, Management information systems, Risk management, Strategic planning
- Format
- Document (PDF)
- Title
- Strategic information disclosure when there is fundamental disagreement: an empirical investigation.
- Creator
- Volkov, Nikanor, Agapova, Anna, Florida Atlantic University, College of Business, Department of Finance
- Abstract/Description
-
I empirically investigate the managements’ decision to voluntarily disclose strategic information. While carrying a benefit of reduced information asymmetry, strategic information disclosure carries a cost of investors disagreeing with managements’ strategy and thus refusing to provide funding to the firm. Using a hand- collected sample of information releases, I identify firm characteristics that affect the likelihood of strategic information disclosure.
- Date Issued
- 2015
- PURL
- http://purl.flvc.org/fau/fd/FA00004473, http://purl.flvc.org/fau/fd/FA00004473
- Subject Headings
- Corporate governance, Corporations -- Auditing, Disclosure of information, Management information systems, Social responsibility of business, Strategic planning
- Format
- Document (PDF)
