Chief Executive Officer Equity Incentives and Accounting Irregularities

This study examines whether Chief Executive Officer (CEO) equity‐based holdings and compensation provide incentives to manipulate accounting reports. While several prior studies have examined this important question, the empirical evidence is mixed and the existence of a link between CEO equity incentives and accounting irregularities remains an open question. Because inferences from prior studies may be confounded by assumptions inherent in research design choices, we use propensity‐score matching and assess hidden (omitted variable) bias within a broader sample. In contrast to most prior research, we do not find evidence of a positive association between CEO equity incentives and accounting irregularities after matching CEOs on the observable characteristics of their contracting environments. Instead, we find some evidence that accounting irregularities occur less frequently at firms where CEOs have relatively higher levels of equity incentives.     

BUILDING RELATED HOME ACCIDENTS: A PRELIMINARY STUDY

In the period August 1975 to July 1977 the Building Research Station undertook a pilot study to obtain data on home accidents in co-operation with the Watford General Hospital. Subject to precautions regarding medical confidentiality, information was recorded on patients who attended the Accident and Emergency Department of the hospital following an accident in or around a dwelling. In order to facilitate comparison with data on fatalities, use was made of the International Classification of Diseases ‘External Cause of Injury’ system to categorize accident events. It was found that the four main types of non-fatal accident were falls, accidents caused by cutting or piercing instruments, by striking against or being struck by objects, and by hot substances and steam. The study also showed that building features and services might rank relatively highly in terms of the frequency with which they become involved as agents in accidents when compared to other common household items.     

Towards a Unifying Model of Systems of Law, Corporate Financing, Accounting and Corporate Governance

Several authors have observed a relationship between a country's type of legal system and its style of financial reporting. Generally, the causality is presumed to be from legal system to accounting system. However, one model of accounting differences suggests that the type of accounting is an influence on the regulatory system rather than vice versa. This helps to explain why the Netherlands has Roman law but approximately Anglo-Saxon accounting. It also allows for the extensive use by European companies of US or international rules. This paper expands on these themes, and extends the model to include corporate governance.     

Canadian academic accountants' productivity: A survey of 10 refereed publications, 1976–1989*

Abstract. In this paper we examine the productivity of Canadian academic accountants through analyses of articles published in 10 refereed journals between 1976 and 1989, inclusive. We report the numbers of articles by Canadian institutional affiliation cross-tabulated by subject area, whether theoretical or empirical, and by the journal in which articles appeared. Summary statistics are computed to identify the gross and per capita productivity of the institutions represented and to identify the 10 most productive researchers in this period as well as in the subperiods 1976–82 and 1983–89.     

Do Consumers Care about Ethics? Willingness to Pay for Fair‐Trade Coffee

Consumers’ buying behavior is not consistent with their positive attitude toward ethical products. In a survey of 808 Belgian respondents, the actual willingness to pay for fair‐trade coffee was measured. It was found that the average price premium that the consumers were willing to pay for a fair‐trade label was 10%. Ten percent of the sample was prepared to pay the current price premium of 27% in Belgium. Fair‐trade lovers (11%) were more idealistic, aged between 31 and 44 years and less “conventional.” Fair‐trade likers (40%) were more idealistic but sociodemographically not significantly different from the average consumer.     

Economic Viewpoint The Company Sector and the Economic Recovery

Prospects for the economy in the coming years depend largely on whether the private sector will expand activity and increase its employment. The immediate concern is to reverse the falls of output and employment since 1979; the longer-term concern is to generate sustained growth. In the short term. the recovery of output will depend signficantly on whether companies are prepared to rebuild stock levels. In the longer term, a sustained increase in output and employment will require an expansion of the capital stock. In each case what is needed is an increase in company expenditure. Recent experience suggests that such an increase will require a rise in the company sector's income. In this Economic Viewpoint we consider how an increase in the company sector's income and expenditure could be achieved and argue that a cut in the National Insurance Surcharge is a particularly efficient method .