Earnings management,incentive contracts and private information acquisition

This paper analyzes the optimal design of compensation contracts in the presence of earnings management incentives, and its interplay with investors’ information acquisition decisions. We consider a setting in which compensation contract is based on both accounting earnings and stock price when an agent engages in predictable, pernicious earnings management and stock price is endogenously determined in a Noisy Rational Expectations Equilibrium (NREE) that reflects both the public information from reported earnings and a costly, noisy signal privately acquired by investors. We show that an increase in the precision of the firm’s financial reporting system could reduce the informativeness of stock price and exacerbate the agency problem by inducing lower productive effort and higher earnings management, implying that the firm may not choose a more precise financial reporting system.     

Institutional investor inattention and audit quality

We hypothesize and provide empirical evidence that higher institutional investor inattention is associated with lower audit quality. We employ an inattention measure that captures the extent to which institutional investors are distracted by attention-grabbing events irrelevant to the focal firm. Results suggest that a higher degree of institutional investor inattention is associated with a lower propensity of a going-concern opinion, a lower probability of the auditor reporting a material internal control weakness, and a higher likelihood of the audit client misstating the financial statements. Further analyses show that these associations vary by auditor litigation risk, their workload pressure, auditor industry expertise, and analyst coverage. Overall, our findings reveal that while institutional investors play an important monitoring role, the distractions they face undermine the quality of monitoring they provide.     

A bold move or biting off more than they can chew: examining the performance of small acquirers

Review of Quantitative Finance and Accounting - Small acquirers enjoy announcement period returns that are significantly higher than announcement returns for larger acquirers, but small acquirers...     

A ‘glocalization’ approach to the internationalizing of crisis communication

This article focuses on the field of international crisis communication, whereby multinationals and their expatriate staff respond to crisis events in international and/or multicultural contexts. The field of international crisis communication is at or near a state of crisis due to lack of research and, more importantly, methods useful for practitioners. ‘Glocalization’—which is used successfully in fields as diverse as marketing, education, theology, and others as an effective and expedient way of leveraging global capabilities to meet local demands—is proposed as one method for addressing this need pragmatically. Using glocalization for the internationalizing of crisis communication benefits practitioners and researchers alike in a way that avoids imposing Western frameworks and interpretations onto non-Western crisis situations. We demonstrate the approach with a case study involving multinational McDonald’s Corporation and its foreign subsidiary, McDonald’s Japan.     

On the political utterances of plantation tourists: vocalizing the memory of slavery on River Road

ABSTRACT

Within the study of southern plantation house museums, the cultural power that tourists exercise in interpreting, reacting to, and even shaping historical narratives has received limited attention. The purpose of this paper is to advance our understanding of the agency of visitors at plantation museums, paying particular attention to their verbal expressions as they respond to the depiction of slavery on guided tours. Spoken words, questions, and conversations of plantation tourists are not unproblematic transmissions of information but represent “political utterances” that play a crucial role in the constitution and mediation of the process of remembering (or forgetting) the enslaved. We consider the importance of tourist voice and outline two analytical settings for studying the political utterances of plantation visitors – the vocalizing of interpretative communities in post-tour or exit interviews and docent reaction to on-tour comments and questions posed by visitors. Drawing evidence from interviews with visitors and docents at four tourist plantation along the River Road District, we demonstrate the diversity and impact of the political utterances of tourists, and how these vocalizations of memory can possibly lead to greater changes in the way in which slavery is dealt with and remembered at southern plantation museums.     

Foreign tourism under socialism the Albanian “Stalinist” model

While most state socialist societies attempt to attract large scale foreign tourism, the Albanians continue to constrain the numbers and movements of foreign tourists permitted onto their soil. Within the framework of three “contexts”—the organizational, the environmental, and the perceptual—this paper briefly looks at the individuality of the Albanian approach to foreign tourism: implicitly, as a possible model for other small, less developed societies. Finally, questions are raised as to the future of tourism in Albania given an imminent change —after forty years—in the country's dogmatic leadership.