Direct and indirect transmission of avian influenza: results from a calibrated agent-based model

Journal of Economic Interaction and Coordination - This paper develops an agent-based model of the spread of highly pathogenic avian influenza in a regional poultry sector. Spatially located flocks...     

The Impact of Ethical Leadership, the Internal Audit Function, and Moral Intensity on a Financial Reporting Decision

Two elements of corporate governance??the strength of ethical executive leadership and the internal audit function (IAF hereafter)??provide guidance to accounting managers making decisions involving uncertainty. We examine the joint effect of these two factors, manipulated at two levels (strong, weak), in an experiment in which accounting professionals decide whether to book a questionable journal entry (i.e., a journal entry for which a reasonable business case can be made but there is no supporting documentation). We find that ethical leadership and the IAF interact to determine the likelihood that accountants book the entry. Specifically, accountants are less likely to book a questionable journal entry when there is a weak ethical leader and a strong IAF compared to all other conditions. In addition, we find that accountants question the appropriateness and ethicalness of the request to book an undocumented journal entry more in the weak ethical leader and strong IAF condition than in the other conditions. These results suggest that the IAF has a different impact on financial reporting decisions depending on the ethicalness of executive leadership and that a strong IAF may cause accountants to question the appropriateness and ethicalness of an undocumented journal entry when combined with weak ethical leadership. We also find that the interactive effect of ethical leadership and the IAF on an accountant??s decision is fully mediated by his/her perception of the moral intensity of the issue. Thus, accountants, who perceive greater moral intensity associated with booking the entry, are less willing to do so.     

Good disclosure doesn't cure bad accounting—Or does it?: Evaluating the case for SFAS 158

This paper investigates whether the newly required recognition of the funded status of defined benefit (DB) plans under SFAS 158 is incrementally value relevant in its adoption year (2006) relative to the corresponding amounts which were previously disclosed from both equity investor and credit rating perspectives. In equity valuation models, we use a sample of 878 firms (1756 firm years) offering DB plans in 2005 (disclosure year) and 2006 (recognition year), and find no incrementally significant association with market prices of newly recognized amounts under SFAS 158 over the same information that was disclosed pre-SFAS 158. Our credit rating tests, using a sample of 428 DB firms (856 firm years) for 2005 and 2006 also show no differential impact of recognition over disclosure. Overall, we find that equity investors price the SFAS 158-imposed pension differential while credit rating agencies do not, regardless of whether such information is recognized or disclosed in the financial statements. Our results are consistent with efficiency in both equity and credit markets with respect to pension information and suggest that SFAS 158 has not changed the way market participants in aggregate use pension-related financial statement information.     

The agency problem and the moderating role of culturally based management style on Chinese managers’ discretionary accruals

Upon completion of overseas acquisitions, Western firms typically hire Chinese locals or expatriates to run their Chinese operations. This action is an important consideration because a Western executive's managerial style may impact Chinese employee behavior differently than a Chinese executive's managerial style. Utilizing an experiment with Chinese managers as participants, we examine the effect of the agency problem (when both an incentive and opportunity to act in line with one's self-interest are present) on Chinese managers’ discretionary accrual decisions, as well as the role that their executives’ culturally based management style (Eastern versus Western) plays in affecting their propensity to manage earnings. We find that Chinese managers tend to override corporate concerns and recommend higher discretionary expense accruals in an effort to maximize their two-year bonus potential when the agency problem is present. Conversely, they tend to recommend lower discretionary expense accrual figures to help achieve corporate goals when the agency problem is not present. Interestingly, we also find that an executive's culturally based management style moderates the impact of the agency problem in that Chinese managers’ willingness to manage earnings across agency problem conditions is significantly more pronounced in the presence of a Western (U.S.) executive than in the presence of an Eastern (Chinese) executive.     

Adolescents’ brand sensitivity in apparel: influence of three socialization agents

Wearing clothes with prestigious brand names seems to be very important for adolescents. This phenomenon was studied in the context of consumer socialization by examining the influence of three socialization agents, namely parents, peers and TV, on the development of French Canadian adolescents’ brand sensitivity and their relative importance. Controlling for socio‐economic variables, multiple regression analyses were conducted separately for boys and for girls. For both genders, brand sensitivity is related to peer influence. Girls’ brand sensitivity is related to the importance fathers give to clothing brands. TV exposure is not related to adolescents’ brand sensitivity. For boys and girls, peers represent the most important predictor of this consumer socialization. The results are discussed in the light of social and economic pressures and family relationships.     

Quebec young adults’ use of and knowledge of credit

This research aimed to study young adults’ use of and knowledge of credit. A large representative sample of Quebec young adults aged 18–29 years participated in a telephone survey. Results reveal that their use of credit has increased remarkably over the last decade. The mean score on the credit knowledge scale used in this study is 49.4% for the entire group. Ordinary least squares (OLS) regression analysis show that credit knowledge is positively related to personal income, number of debts, amount of total debt, number of credit cards and favourable attitude towards credit and debts. Young adults reporting either personal experience or family and relatives as their main source of learning about personal finances were found to have a lower level of knowledge about credit in general than those reporting having learned of this subject from courses, the media or financial counsellors. The learning of basic knowledge about credit and personal finances, with stress on the sensible use of credit, should be part of the educational agenda for young consumers.