Does the midpoint of range earnings forecasts represent managers’ expectations?

The accounting literature has used the midpoint of range forecasts in various research settings, assuming that the midpoint is the best proxy for managers’ earnings expectations revealed in range forecasts. We argue that given managers’ asymmetric loss functions regarding earnings surprises, managers are unlikely to place their true earnings expectations at the midpoint of range forecasts. We predict that managers’ true expectations are close to the upper bound of range forecasts. We find evidence consistent with these predictions in 1996–2010, especially in the recent decade. Despite their role as sophisticated information intermediaries, analysts barely unravel the pessimistic bias that managers embed in range forecasts. Furthermore, we find that the upper bound rather than the midpoint better represents investors’ interpretation of managers’ expectations in recent times. Our study cautions researchers to refine their research designs that use management range forecasts and sheds light on the role of financial analysts in the earnings expectations game.     

Perceptions of the true and fair view concept: an empirical investigation

If major groups of financial reporting participants differ in their perceptions of standards for financial reporting quality, such as 'true and fair view', 'present fairly' and 'fair presentation', a financial reporting expectation gap may occur. This article reports the results of a survey designed to explore this potential gap by determining New Zealand financial directors', auditors' and shareholders' perceptions of terms associated with financial reporting quality.
The results show that a clear majority of all three groups share similar perceptions of the 'true and fair view'; but perceive 'true and fair view' to be quite different from 'fairly presents' and 'fair presentation', terms the New Zealand Institute of Chartered Accountants' (2005) describes as equivalent to 'true and fair view'. Thus there appears to be a perception gap between the respondents surveyed and the Institute. The findings also support a literal rather than a technical interpretation of 'true and fair view'; that respondents do not perceive 'true and fair view' as compliance with GAAP; and that 'true' ('truth' in accounting), the word separating 'true and fair view' from terms that include only 'fair', may be perceived as a key factor required for financial reporting quality.     

VALUING CONTRIBUTING SHARES

Contributing shares, which are only partly paid initially, entitle the holder to a pro-rata call on the firm's assets. Subsequent payments, if and when made, convert the contributing share into a full ordinary share. This right to convert effectively may reside with different players in various cases. The valuation of contributing shares is developed in the three cases of a fixed obligation to convert, the option to convert is held by the firm and the option to convert is under the control of the contributing shareholders themselves, such as possibly when the contributing shares are held by board members. The valuation is given in closed form solutions for an indefinite life of the contributing share.     

Counterproductive behaviour at work: an investigation into reduction strategies

The present study examined the interrelation of personality characteristics, organizational justice, organizational citizenship behaviour (OCB), and counterproductive work behaviour (CWB). An anonymous questionnaire survey was conducted, with 1662 participants representing a wide variety of jobs across heterogeneous organizations in Thailand. Statistical analysis indicated that CWB can be predicted by the following personality characteristics; conscientiousness, agreeableness, self-esteem, extraversion, neuroticism and openness to experience. Moderation analysis discovered that the association between personality characteristics and CWB is moderated by three factors; distributive justice, interactional justice and OCB. Structural Equation Modelling was adopted in order to examine the efficacy of the identified moderators, and revealed that interactional justice has the strongest moderating effect, followed by distributive justice and finally OCB. Implications of the findings to organizational management and personnel practitioners are discussed accordingly, including; that the occurrence of CWB could be reduced through the implementation of organizational justice enhancement policies; and that the prevalence of OCB atmosphere at work could also help alleviate the impact of personality characteristics on CWB.     

Lost in translation: Exploring the ethical consumer intention–behavior gap

Ethical consumerism is a burgeoning movement, yet ethically-minded consumers rarely purchase ethically. Understanding obstacles to ethical consumption is limited. This study explores the underlying mechanics of the ethical purchase intention–behavior gap in the context of consumers' daily lives. The study employs multiple qualitative methods across multiple sites, explores the intention–behavior gap in observed modes of shopping behavior, and uses an interpretive approach. The analysis reveals four interrelated factors affecting the ethical intention–behavior gap: (1) prioritization of ethical concerns; (2) formation of plans/habits; (3) willingness to commit and sacrifice; and (4) modes of shopping behavior. Awareness of these four factors provides both strategic and tactical implications for marketing managers seeking to reach the elusive ethical consumer. Understanding and enhancing ethical consumption – closing the gap – has positive outcomes for the future sustainability of economies, societies and environments.     

Fragmented Food Habits and the Disintegration of Traditional Meal Patterns: A Challenge to Public Health Nutrition in Canada?

Abstract

This study examines the shifting patterns in meal consumption practices among Canadians and the sources of disruption of meal habits. It analyses the notion of breakfast, lunch, dinner, out-of-household consumption of food, cooking, and snacking which could be considered as disrupting eating habits. Meal skipping, primarily breakfast and lunch was common, particularly among women, as was consumption of food outside the home, particularly among lower income earners and respondents with lower education attainment. The findings of this survey suggest that contemporary Canadians are experiencing a disruption of meal times, a rise in the frequency of snacking and an erosion of the will or ability to prepare or cook meals at home. For many Canadians, the traditional notion of three-meals a day is becoming an ideal, rather than a daily reality. Fragmented food habits and the disintegration of traditional meal patterns represent a challenge to public health nutrition in Canada.     

Which State Policies Lead to U.S. Firm Exits? Analysis with the Economic Freedom Index

This research investigates the relationship between public policy and firm deaths in the U.S. states. Policies that promote firm births may increase or decrease firm deaths. We use components of the Economic Freedom of North America index as a metric to evaluate the relationship between increased government size and firm deaths for the 50 states during 1989–2004. Elements of economic freedom are significantly related to firm deaths but in conflicting directions. We find that in the relevant range, some increases in state policy lead to firm death more than others. The paper also discusses our results and the implications for both future academic research and public policy.