Do students’ perceptions matter? A study of the effect of students’ perceptions on academic performance

Prior accounting education literature documents that students typically associate accounting subjects with negative perceptions, but there are also recent suggestions that the stereotype of the accountant has positive associations. These perceptions of accounting are likely to affect students’ attitudes towards learning and, consequently, influence their performance. We examine the relationship between students’ perceptions and students’ performance. The present study involved undergraduate and graduate students enrolled in management accounting subjects. Our findings indicate that students’ performance is negatively affected by the negative perceptions of accounting that students bring to the subject. Our findings also suggest that positive perceptions of accounting held by students at the end of the semester have a positive impact on students’ performance.     

Discussion of ‘Is the objectivity of internal audit compromised when the internal audit function is a management training ground?’

This article provides a critique of the Rose, Rose, and Norman (2013) article. It focuses on four issues: (i) whether institutional details have been appropriately captured; (ii) whether experiments are an appropriate method to answer the authors' research question; (iii) whether the authors' hypotheses should predict an interaction; and (iv) whether the authors have relied on the appropriate theory.     

Survey Under‐Coverage of Top Incomes and Estimation of Inequality: What is the Role of the UK's SPI Adjustment?

Survey under‐coverage of top incomes leads to bias in survey‐based estimates of overall income inequality. Using income tax record data in combination with survey data is a potential approach to address the problem; we consider here the UK's pioneering ‘SPI adjustment’ method that implements this idea. Since 1992, the principal income distribution series (reported annually in Households Below Average Income) has been based on household survey data in which the incomes of a small number of ‘very rich’ individuals are adjusted using information from ‘very rich’ individuals in personal income tax return data. We explain what the procedure involves, reveal the extent to which it addresses survey under‐coverage of top incomes and show how it affects estimates of overall income inequality. More generally, we assess whether the SPI adjustment is fit for purpose and consider whether variants of it could be employed by other countries.     

Can Taxes Shape an Industry? Evidence from the Implementation of the “Amazon Tax”

For years, online retailers have maintained a price advantage over brick‐and‐mortar retailers by not collecting sales tax at the time of sale. Recently, several states have required that online retailer Amazon collect sales tax during checkout. Using transaction‐level data, we document that households living in these states reduced their Amazon purchases by 9.4% following the implementation of the sales tax laws, implying elasticities of –1.2 to –1.4. The effect is stronger for large purchases, where purchases declined by 29.1%, corresponding to an elasticity of –3.9. Studying competitors in the electronics field, we find some evidence of substitution toward competing retailers.     

Do Weather‐Induced Moods Affect the Processing of Earnings News?

We investigate whether unpleasant environmental conditions affect stock market participants’ responses to information events. We draw from psychology research to develop a new prediction that weather‐induced negative moods reduce market participants’ activity levels. Exploiting geographic variation in equity analysts’ locations, we find compelling evidence that analysts experiencing unpleasant weather are slower or less likely to respond to an earnings announcement relative to analysts responding to the same announcement but experiencing pleasant weather. Price association tests find evidence consistent with reduced activity due to weather‐induced moods delaying equilibrium price adjustments following earnings announcements. We also use our analyst‐based research design to re‐examine an existing prediction that unpleasant weather induces investor pessimism, and find evidence of both analyst pessimism and reduced activity in the presence of unpleasant weather. Together, our study provides new evidence that both extends and reaffirms findings of a relation between unpleasant weather and market activities, and contributes to the broader psychology and economics literature on the impact of weather‐induced mood on labor productivity.     

Does the Scope of the Sell‐Side Analyst Industry Matter? An Examination of Bias,Accuracy, and Information Content of Analyst Reports

We examine changes in the scope of the sell‐side analyst industry and whether these changes impact information dissemination and the quality of analysts’ reports. Our findings suggest that changes in the number of analysts covering an industry impact analyst competition and have significant spillover effects on other analysts’ forecast accuracy, bias, report informativeness, and effort. These spillover industry effects are incremental to the effects of firm level changes in analyst coverage. Overall, a more significant sell‐side analyst industry presence has positive externalities that can result in better functioning capital markets.     

Who selects the ‘right’ directors? An examination of the association between board selection,gender diversity and outcomes

Using a sample of companies from the top 500 listed firms in Australia, we investigate whether the presence of a designated nomination committee and female representation on the nomination committee affect board gender diversity. We also examine whether gender diversity on the board affects firm risk and financial performance. We find that board gender diversity is significantly and positively associated with the presence of a designated nomination committee and that female representation on the nomination committee is a significant explanatory factor of increasing board gender diversity following the release of the 2010 Australian Securities Exchange Corporate Governance Council (ASXCGC) recommendations. Further, our results support the business case for board gender diversity as we find greater gender diversity moderates excessive firm risk which in turn improves firms' financial performance. Our results are robust after correcting for selection bias and controlling for other board, firm and industry characteristics.     

Housing Really Is the Business Cycle: What Survives the Lessons of 2008–09?

The downturn of 2008–09 has confirmed that: (i) housing is the single most critical part of the U.S. business cycle, (ii) the proper conduct of monetary policy needs to be cognizant that choices made at one point in time affect the options later, and (iii) the best time to intervene in the housing cycle is when the volume of building is above normal and growing more so. What was different this time was the rapid and substantial decline in home prices.     

Which bank is the “central” bank?

Liquidity flows through a financial network cannot be accurately described using external processing constraints alone. Behavioral aspects of participants also matter. A method similar to Google's PageRank procedure is used to produce a ranking of participants in the Canadian Large Value Transfer System in terms of their daily liquidity holdings. Accounting for differences in banks’ processing speeds is essential for explaining why observed distributions of liquidity differ from the initial distributions, which are determined by the credit limits selected by banks. Delay tendencies of banks are unobservable in the data and are estimated using a Markov model.     

The explanatory power of R&D for the cross-section of stock returns: Japan 1985–2000

This paper examines the role of research and development (R&D) in explaining the cross-section of stock returns in Japanese market for the period from 1985 to 2000. Economic intuition suggests that expected stock return and the risk of return should be positively related to R&D. We find moderate evidence that the average stock return is positively related to R&D expenditure in that period. The relation, however, is not stable over three subperiods of the sample. In the bubble-forming period (1985–1989), the average return is in fact slightly negatively related to the R&D intensity. In the burst-of-bubble period (1990–1992), the relation is slightly positive. Only in the post-bubble period (1993–2000) is the R&D effect positive and significant. We also examine the relations of the total risk and systematic risk of returns with the R&D intensity and find that only in the post-bubble period the R&D intensity contributes positively to the risks and its explanatory power is low.     

Is the effect of shared auditors driven by shared audit partners? The case of M&As

Recent research suggests that shared auditors impact firm outcomes by facilitating information flows across clients and increasing financial statement comparability. This study argues that since client specific knowledge resides with audit partners the effects of shared auditors on corporate outcomes is primarily driven by client engagements with shared audit partners. We test this argument using Australian merger and acquisitions, where there is a longstanding requirement for the disclosure of audit partner details. We find: (i) a positive association between shared audit partners and the likelihood of a friendly acquisition, (ii) a negative association between shared audit partners and takeover premiums, and (iii) a positive (negative) association between shared audit partners and acquirer (target) and total cumulative abnormal returns. We also document that the significant effect of shared auditors is restricted to takeovers with shared audit partners.     

Is there useful information in the ‘use of proceeds’ disclosures in IPO prospectuses?

This study contributes evidence on the valuation relevance of the ‘use of proceeds’ disclosure in the initial public offering (IPO) prospectus. This article develops a classification of ‘use of proceeds’ disclosures that aims to capture information embedded in the disclosures relating to the purpose (growth, production, financing) and amount committed to specific assets. These measures are then related to IPO underpricing, survival prediction and expected and realised prospects of the IPOs. The results suggest the ‘use of proceeds’ disclosure categories have incremental information over other sources of information for underpricing, for predicting firm survival and in the case of some disclosure categories, for investors’ evaluation of the firms’ prospects and risks in the early years after listing.     

Exploring governance of the new European Banking Authority—A case for harmonization?

In the context of the proposed EU financial supervisory reforms, this paper focuses on the governance of the network of national supervisory banking agencies and the newly established Community supervisor (European Banking Authority, EBA). We assess to what extent lack of governance convergence nationally and with EBA could undermine the incentives for cooperation among supervisors. Convergence should particularly focus on (i) the issue of the presence of politicians on decision-making bodies; (ii) the need for clearly defining dismissal procedures of heads of supervision; (iii) autonomy from government in regulatory matters; (iv) supervisory autonomy in matters of licensing and withdrawing licenses; (iv) mechanisms for judicial accountability; (v) legal protection for supervisors handling in good faith. In the absence of full centralization of prudential supervision, early harmonization of national governance arrangements towards best practice would better align supervisors’ incentive structures and, hence, be beneficial for the effectiveness of European supervision.     

When do auctions ensure the welfare‐maximizing allocation of scarce inputs?

We determine when an unfettered auction will ensure the welfare‐maximizing allocation of a scarce input that enhances product quality and may reduce production costs. A supplier values the input for this “use value” and for its “foreclosure value,” because once the input is acquired, it is unavailable to rivals. An unfettered auction often ensures the welfare‐maximizing allocation of an input increment. However, it can fail to do so when the input would increase relatively rapidly the competitive position of a rival with a moderate competitive disadvantage. Bidder handicapping that ensures auctions generate welfare‐maximizing input allocations differ from standard handicapping policies.     

What determines the composition of banks’ loan portfolios? Evidence from transition countries

This paper explores how bank characteristics and the institutional environment influence the composition of banks’ loan portfolios. We use a new and unique data set based on the EBRD Banking Environment and Performance Survey (BEPS), which was conducted for 220 banks in 20 transition countries. We show that bank ownership, bank size, and legal creditor protection are important determinants of the composition of banks’ loan portfolios. In particular, we find that foreign banks play an active role in mortgage lending. Moreover, banks that perceive pledge and mortgage laws to be of high quality choose to focus more on mortgage lending.     

Do Family Firms’ Specific Governance Mechanisms Moderate the Cost of Debt?

This study considers whether the specific governance mechanisms of Spanish family firms decrease their debt cost. We explore the idea of reducing debt costs through specific governance mechanisms of family firms, such as the business succession plan, the family council, as well as other traditional mechanisms like the board of directors. Because most corporate governance research has focused on larger firms, more research on smaller privately held family firms is necessary. For this empirical research, we used a sample of 281 small and medium‐sized family firms. The results show that the implementation of a business succession plan not only serves to solve family conflicts and to plan the business succession but also moderates the cost of financing. Our results confirm that credit institutions receive a positive signal when family firms implement business succession plans as governance mechanisms, reducing both family opportunism and asymmetries of information, influencing risk analysts in their decision‐making processes.     

Accounting Education and the Prerequisite Skills of Accounting Graduates: Are Accounting Firms’ Moving the Boundaries?

The current requisite skills of accounting graduates guide the graduate attributes delivered by university learning outcomes. A recent trend by Australian accounting firms to outsource accounting services may impact on accounting graduates if entry‐level tasks normally completed by graduates are sent to offshore processing centres. This study examines the impact of the outsourcing of accounting services by Australian accounting firms and classifies the current requisite skills for accounting graduates identified by accounting firms. Following a review of the current academic literature, a positivist approach using empirical data is taken in this paper. The responses elicited from a survey questionnaire mailed to a random sample of Australian accounting firms provide information for the data analysis. One of the most widely outsourced services identified is the preparation of income tax returns, which has been identified as a key area where graduate accountants normally learn the basic skills required to phase them into the profession. Accounting firms that considered the outsourcing of accounting services would change the 12 ranked prerequisite skills for graduates presented in this paper in order of importance.     

A note on the behaviour of the “tail” of the mixture-poisson distribution

Abstract

A mixture-Poisson distribution is defined by where U(x) is a distribution function concentrated on (0, ∞). This distribution has been applied as a model of the number of claims occurring in an insurance business during a certain period of time.