Determinants of the Method of Payment in Asset Sell‐Off Transactions

Using a sample of asset sell‐off transactions from January 1990 to April 2010, we find that the method of payment used in asset sell‐off transactions is associated with several characteristics cited in the acquisitions research that reflect cash constraints of the bidder. Specifically, bidders facing more stringent cash constraints are more likely to use equity when purchasing assets, while sellers subjected to cash constraints prefer cash when selling assets. Second, we find that the variation in method of payment among asset sell‐off transactions also is partially explained by variables representing asymmetric information. Third, we apply our model to an expanded sample that includes non‐U.S. sellers of assets and find that an equity payment is more likely when sellers are based in countries that have relatively high country risk (more government restrictions), weak shareholder rights, and a weak legal system. Thus, it appears that bidders prefer that sellers share in the risk of the transaction under these conditions.     

Information Leakage Prior to Company Issued Guidance

We find that information leakages prior to public guidance issued by company management exist even after Regulation Fair Disclosure (FD), and are more pronounced when characteristics of the firm, the guidance, or the industry reflect higher levels of information asymmetry. Since public guidance is only partially leaked, this information leakage can be used to anticipate the information content of the impending public guidance. We simulate a trading strategy based on the preguidance leakage in the period after Regulation FD, which suggests that information leakage is an effective signal of the information content within impending public guidance.     

Mandatory IFRS adoption and management forecasts: The impact of enforcement changes

We examine how concurrent enforcement changes affect the positive relationship between mandatory IFRS adoption and firms’ voluntary disclosure. We show that the increase in the issuance of management forecasts after IFRS adoption is smaller for firms from IFRS-mandating countries with concurrent enforcement changes than for those from countries without such changes. We find no difference in the increase of forecast informativeness between firms from IFRS-mandating countries without concurrent enforcement changes and firms from non-IFRS-mandating countries; however, firms domiciled in IFRS-mandating countries with concurrent enforcement changes exhibit a significantly smaller increase in forecast informativeness. Our findings suggest that better IFRS enforcement distinctly weakens (strengthens) the positive effect of IFRS adoption on voluntary (mandatory) disclosure.     

Changing management roles in the Scottish NHS: implications for management learning and development

The UK government's austerity means that public service providers, such as the National Health Service (NHS), are looking for efficiencies from service integration and collaborative working. This paper highlights how NHS (Scotland) management is coping with these changes and how the role of the manager and the nature of management development is being transformed. New forms and processes of management learning and development are needed for collaborative partnership working in multi-agency public service environments.     

Risky business—reconceptualizing risk and innovation in public services

This paper explores the relationship between risk and innovation in public services, presenting the state of the literature across different disciplines and the academic and policy literature. It suggests a novel framework to approach risk, emphasising the importance of differentiating between different types of risk and risk management. The paper offers a typology of risk types and management approaches that indicates different effects on the type of public service innovation. It concludes by considering the implications for theory and practice.     

When do managers listen to the market? Impact of learning in acquisitions of private firms

We study the influence of market signals and agency problems on the decision to cancel an announced acquisition. We find major differences between deals involving private vs. public targets. First, controlling for the value of expected synergies, acquisitions are less likely to be cancelled when the target is private rather than public. This finding supports learning rather than the alternative common-information hypothesis. Second, better manager-shareholder interest alignment makes the cancellation of a “bad” deal more likely only when the target is a private firm. This suggests bidder agency problems have a greater influence on acquisition outcome (i.e., learning) when the target is private. Third, cancellation is more likely for private targets when their post-announcement abnormal returns are low, especially if the method of payment includes stock. This indicates that it is important to control for bidder overvaluation when testing the managerial learning hypothesis. Overall, both the learning and agency hypotheses help explain observed differences in deal completion by target type.     

Impact of Regulatory Enforcement on Leakages Prior to Analyst Recommendations

The financial press suggests that information is commonly leaked prior to analyst recommendations. We examine the impact that three regulatory actions (Regulation Fair Disclosure, Global Analysts Research Settlement, and the legal case against Galleon Group) have on information leakage prior to analyst recommendations. We find that all three regulatory actions have significantly reduced the leakage of information prior to analyst recommendations, even after controlling for several characteristics that explain the variation in information leakage. Our results are robust when applying an alternative method of measuring information leakage, and when forming various samples of analyst recommendations based on different criteria.     

Client Importance and Audit Quality at the Individual Audit Partner,Office, and Firm Levels

We investigate whether audit partner level data provides a more powerful measure than office or firm level measures of client importance. We find that the likelihood of issuing a going-concern opinion (any and first-time) increases, and the absolute value of discretionary accruals decreases, in relation to the proportion of audit fees to the total audit fees received by audit partners from all their clients. We also find that the likelihood of issuing a going-concern opinion (any and first-time) increases, and the absolute value of discretionary accruals decreases, in relation to the proportion of non-audit services fees from a client to total non-audit service fees, and the proportion of total audit and non-audit service fees from a client to total fees from all their clients at the office and firm levels. Our findings provide evidence to regulators, audit clients, and stakeholders that audit partners do not succumb to pressure from economically more important clients as audit quality has a positive association with client importance.     

Accounting and networks of corruption

This study examines the nature and role of accounting practices in a network of corruption in an influence-market setting. The study focuses on the Canadian government’s Sponsorship Program (1994–2003), a national unification scheme that saw approximately $50 million diverted into the bank accounts of political parties, program administrators, and their families, friends and business colleagues. Relying on the institutional sociology of Bourdieu, the study demonstrates the precise role of accounting practices in the organization of a corrupt network imbued with a specific telos and certain accounting tasks. The study illustrates how accounting is accomplished and by whom, and it shows how the ‘skillful use’ of accounting practices and social interactions around these practices together enable corruption. In so doing, the study builds on a growing body of work examining criminogenic networks and the contextual, collaborative and systemic uses of accounting in such networks.