The Effects of Secondary School Accounting Education on University Accounting Performance—A Canadian Experience*

Abstract. This study examined the impact of high school accounting education on students' performance in the first financial accounting course at a Canadian university, specifically the differential impact of different degrees of exposure to high school accounting (i.e., number of courses taken) and the type of courses (i.e., OAC) versus non-OAC courses) on the students' performance. The results strongly suggest that previous experience in accounting has a significantly positive relationship with students' performance in the first university accounting course. Although the results show that there is a significant positive correlation between performance and the number of accounting courses taken in high school, the results also indicate no significant difference in performance between students who have taken one or two courses. When controlling for the type of courses taken in high school, the results suggest that OAC students perform significantly better than non-OAC students. The results reported in this study may have important implications for university curricula policy makers. Résumé. Les auteurs examinent l'incidence de la formation en comptabilité des étudiants de niveau collégial sur leur succès dans le premier cours de comptabilité financière qu'ils suivent dans une université canadienne, et plus précisément la variation de cette incidence selon la mesure dans laquelle ils sont exposés à la comptabilité dans leurs études collégiales (en termes de nombre de cours suivis) et la nature des cours qu'ils suivent (selon que ces cours appartiennent ou non à la catégorie des Ontario Academic Courses (OAC)). Les résultats donnent toutes les raisons de croire que l'expérience préalable en comptabilité a une relation positive significative avec le succès des étudiants dans leur premier cours universitaire de comptabilité. Bien que l'étude aboutisse à la conclusion qu'il existe une corrélation positive significative entre le succès et le nombre de cours de comptabilité suivis au niveau collégial, les résultats n'indiquent aucune différence significative dans le succès des étudiants, selon qu'ils ont suivi un ou deux cours. Selon les résultats de l'analyse, les étudiants ayant suivi des cours appartenant à la catégorie des OAC réussissent beaucoup mieux que ceux qui ont suivi des cours n'appartenant pas à cette catégorie. Les constatations des auteurs pourraient avoir des répercussions majeures sur la conception des programmes universitaires.     

Strategic and Functional Orientation of Small and Medium Sized Enterprises in Professional Services: An Analysis of Public Accountancy

This study examines how SMEs in public accountancy remain competitive, promote and deliver their services. The association among strategic planning, functional diversification (services and markets), methods of promotion and delivery is also examined. These SMEs face considerable difficulty in overcoming both in-house and external barriers in accessing clients requiring non-traditional services (e.g. management consulting), and clients involved in international business (broadly defined). The results show that the proactive, functionally diversified, and/or internationally oriented firms outperform the reactive, functionally concentrated, and local market oriented firms. The competitive advantage for the former categories is based on flexible specialisation such as customisation of services for specific groups of clients, speed of delivery collaboration with other producer service firms, and specialised skills. These firms utilise informal networks to promote their services with minimal investments in sponsorships or media selling. Face-to-face interaction with clients continues to be the preferred mode of service delivery despite the increased adaptation of local area networks and other modes of internationally technology by the proactive, functionally diversified or internationally oriented firms.     

Bringing It Home: A Study of the Incentives Surrounding the Repatriation of Foreign Earnings Under the American Jobs Creation Act of 2004

The American Jobs Creation Act of 2004 (the Act) creates a temporary tax holiday that effectively reduces the U.S. tax rate on repatriations from foreign subsidiaries from 35% to 5.25%. Firms receive the reduced tax rate by electing to take an 85% dividends received deduction on repatriations in 2004 or 2005. This paper investigates the characteristics of firms that repatriate under the Act and how they use the repatriated funds. We find that firms that repatriate under the Act have lower investment opportunities and higher free cash flows than nonrepatriating firms. Further, we find that repatriating firms increase share repurchases during 2005 by approximately $60 billion more than nonrepatriating firms, an amount that cannot be explained by differences in earnings between the two groups of firms. This increase represents about 20% of the $291.6 billion repatriated by our sample firms under the Act.     

Perceived risk and mail order shopping for apparel

The purpose of this study was to explore the relationship between perceived risk regarding apparel selection and mail order shopping. One-hundred and two adult women from a medium-sized midwestern city in the U.S.A. participated in a telephone survey. Factor analysis uncovered four distinct types of risk associated with mail order shopping: economic, performance-related, physical and social/psychological. Multivariate and univariate analyses revealed that economic risk was the only risk that was significantly different from other categories of risk. A Scheffé post hoc comparison indicated that economic risk was higher for respondents who were non- or infrequent mail order shoppers than for frequent mail order shoppers. These results contribute to the literature on mail order shopping by isolating the product category of apparel. The results can aid catalogue and other direct marketing companies by suggesting that they focus on alleviating economic losses of future clients, thereby making it easier for consumers to capitalize on the convenience features of this patronage mode.     

A Reexamination of Behavior in Experimental Audit Markets: The Effects of Moral Reasoning and Economic Incentives on Auditor Reporting and Fees*

This study uses experimental markets to investigate how moral reasoning influences auditor reporting under different levels of economic incentives. In each multiperiod market, auditor subjects could either (1) misreport low observed outcomes as high and thereby reap economic advantages at the expense of third‐party investors, or (2) truthfully report low observed outcomes as low but thereby forgo the economic advantages of misreporting. We extend the Calegari, Schatzberg, and Sevcik 1998 experimental‐markets setting to incorporate moral reasoning, and test hypotheses based on the economic model of Magee and Tseng 1990 and the neo‐Kohlbergian moral reasoning framework of Rest, Narvaez, Bebeau, and Thoma 1999. We document a significant effect of moral reasoning on auditor behavior. Specifically, we find that misreporting and premium fees are more likely with higher than with lower moral reasoning subjects, and the moral reasoning effect diminishes as economic penalties increase in the market. These findings provide valuable insights for specifying the determinants of auditor misreporting, the observable behaviors that signal its existence, and the institutions that can prevent its occurrence in the market. We conclude that the relation between moral reasoning and behavior is more complex than commonly assumed in the accounting literature, and identify directions for future research.     

The Impact of Mandated Disclosure on Performance‐Based CEO Compensation*

Regulators argue that mandated compensation disclosure improves corporate governance by permitting shareholders to enjoin boards of directors to reward executives in ways that are consistent with shareholder value creation. We posit that mandated compensation disclosure, or the absence thereof, has a greater impact on the CEO compensation practices of widely held firms than of closely held firms. More specifically, we expect that, in the absence of mandated disclosure, CEO compensation is likely to be less performance‐contingent among widely held firms than among closely held firms. Moreover, we also expect that the advent of mandated disclosure leads widely held firms to increase the extent to which CEO compensation is performance‐contingent, much more so than closely held firms would. We use a unique data base resulting from the Ontario Securities Commission amendment of regulation 638 in October 1993. For the first time, this amendment required firms listed on the Toronto Stock Exchange to provide detailed executive compensation data similar to those required by the Securities and Exchange Commission, for the current year as well as retroactively for the previous two years. We find that, in the absence of mandated disclosure, CEO cash compensation in widely held firms is less performance‐contingent than in closely held firms. With the imposition of mandated disclosure, performance‐contingent cash compensation increases more in widely held firms than in closely held firms. Results with respect to stock option grants are mixed, with both closely held and widely held firms reacting to the advent of mandated disclosure.     

Connecting Time and Space: The Significance of Transformations in Women's Work in the City

Growing numbers of women with children living in western cities are entering the labour market, raising new questions about changes in the allocation of the tasks of social reproduction between household members and others and about the effects of the increasing time women now spend in the workplace. As Manuel Castells noted over 25 years ago, women's unpaid labour has long been essential, not only in the domestic arena, but also in patching together facilities separated in space. The spatial layout of cities, with its specialized and segregated land‐uses, only works, he argued, if women's unpaid labour is available to connect urban locations. But many women now spend many more hours in the labour market, replacing their former domestic labour with a range of commodified goods and services as well as by help from a range of related or unrelated others, sometimes but not always remunerated and/or by state‐provided or supported services. This article examines the consequences of the growth of women's employment in Britain and the concomitant decline of the old breadwinner family, the growth of workfare policies that assume all individuals are available for waged work and the rise of commodified caring. The arguments are illustrated by empirical examples from interviews undertaken with middle‐class mothers in waged work in London and Manchester in the UK.