Accounting & Taxation

Accounting & Taxation, ISSN:1944-592X (print) and ISSN: 2157-0175 (online), publishes high-quality articles in all areas of accounting, auditing, taxation and related areas. Theoretical, empirical and applied manuscripts are welcome for publication consideration. The Journal is published twice per year by the Institute for Business and Finance Research, LLC. The Journal acceptance rate is between 5 and 15 percent.

Articles

Vol. 7, No. 2, 2015

Do Firms Engage in Aggressive Tax Reporting Prior to Bankruptcy?
(ProQuest: ... denotes formulae omitted.)INTRODUCTIONThis study examines the aggressive financial reporting and aggressive tax reporting of firms just before they file for bankruptcy ("pre-bankruptcy firms"). We conduct this study for two reasons. First,...
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Debt Repayment Capacity of Local Government Sector in Poland during the 2008-2013 Economic Slowdown Period
ABSTRACTThe crisis, which began in 2008, had a negative impact on the financial condition of local governments across the European Union. In Poland, the debt of the local government sector increased from 2.3% of GDP in 2008 to 4.2% of GDP in 2013. The...
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Royal Family Members and Firm Performance: Evidence from Kingdom of Saudi Arabia
ABSTRACTThis study examines the relationship between Royal family members on the board of directors and firm performance of 573 publicly listed in the Saudi Stock Exchange (Tadawul) during 2007-2011 periods. This study utilizes two measurements of the...
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A Test of the Pecking Order Theory of Capital Structure in Corporate Finance
ABSTRACTThis paper utilises a cross section of 12,244 publicly traded corporations in the U.S. from the time period 1999 to 2009 to test the pecking order theory of capital structure. Applying the methodology of Frank and Goyal (2003), limited evidence...
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Earnings Management, Weak Internal Controls, and Firm Size
ABSTRACTWe investigate the association between earnings management and internal control weaknesses as well as the association between earnings management and firm size. We use two samples: one from large accelerated filers, matched with the same number...
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Transfer Pricing: Increasing Tension between Multinational Firms and Tax Authorities
ABSTRACTTransfer pricing taxation is a significant source of tension between Multinational Firms (MNFs) and tax authorities. The tension relates to the different perspectives of MNFs and tax authorities. MNFs view taxes related to transfer prices as...
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Relationships between Institutional Ownership, Capital Structure and Research and Development Investment
ABSTRACTResearch and development (R&D) is vital for an information technology (IT) firm's innovation. This study investigates the relationship among institutional ownership, capital structure, and research and development investment for 336 listed...
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Accounting Knowledge, Practices, and Controls of Micro, Small and Medium Enterprises: Evidence from the Philippines
ABSTRACTOf the business enterprises operating in the Philippines, 99.6% are micro, small, and medium enterprises (MSMEs). The Magna Carta of Small Enterprises (Republic Act 6977) governs these MSMEs. However, they are still subject to laws on the declaration...
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Vol. 7, No. 1, 2015

An Exploratory Study of Professional Ethical Standards, Positive Budgeting Orientation, and the Mediating Role of Corporate Ethical Values
ABSTRACTThe purpose of this exploratory study was to empirically assess interrelationships between professional ethical standards, corporate ethical values, and the concept of positive budgeting orientation. It was believed that perceived ethical values...
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Voluntary Fair Value Disclosures by Bank Holding Companies: The Role of Sec Dear CFO Letters
ABSTRACTThe SEC's Division of Corporate Finance sent "Dear CFO" letters to certain registrants in 2008 requesting voluntary disclosures to improve transparency of Level 3 fair value measures and valuation of financial instruments in inactive or illiquid...
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An Empirical Investigation of Audit Committee Effectiveness and Risk Management: Evidence from Saudi Arabia
ABSTRACTThis study examines the association between audit committee characteristics and the combination of risk management and audit committee activities by industrial Saudi listed firms. Since none of the sample firms has established a stand-alone risk...
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Directors' and Officers' Insurance and Opportunism in Accounting Choice
ABSTRACTIn this paper, the focus is on how excessive directors' and officers' liability insurance coverage is associated with risk-taking behavior in financial reporting. This study examines the implications of two alternative hypotheses. The opportunism...
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Tax Compliance of Small and Medium Enterprises: Evidence from Indonesia
ABSTRACTIt has been argued that regulatory requirements on business, especially those on SMEs can be a constraint on their growth. Indonesian Small and Medium Enterprises (SMEs) play a significant role in the national economy. This paper measures the...
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Internet Financial Reporting and Disclosure Practices of Publicly Traded Corporations: Evidence from Sri Lanka
ABSTRACTAlthough Internet Financial Reporting (IFR) has become standard practice rather than the exception in most Western countries, empirical evidence of the phenomenon is only just emerging in developing economies. This paper examines the use of the...
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Enhanced Relationship Participation Incentives for (Dutch) Multinational Organizations
ABSTRACTThis paper deals with enhanced relationship participation in an international context. The purpose of this study has been to offer insight into the essentials for implementing a Tax Control Framework (TCF) and identify organizations' incentives...
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Measuring Income Inequality: An Application of the Population Dynamic Theil's Entropy
ABSTRACTIn this paper we use the index we call Population Dynamic Theil's Entropy to analyze as the income inequality varies on time. The index may consider both the inequality among the classes in which we assign the individuals and the inequality within...
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Vol. 6, No. 2, 2014

Determinants of Non-Performing Loans in Nigeria
ABSTRACTCredit risk assessment is a major component of macro prudential analysis, with the aggregate non-performing loan ratio serving as a proxy for the economy-wide probability of default of the banking sector 's overall loan exposure. Consequently,...
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The Impact of Culture and Economic Factors on the Implementation of Ifrs
ABSTRACTThis paper examines the effects of culture and other economic factors on a country 's decision to implement International Financial Reporting Standards (IFRS). This work extends the previous literature by using a methodology that assigns an implementation...
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Financial Management in the Family and Non-Family Sme's in the Textile Industry in Mexico
ABSTRACTIn this paper, we analyze differences in financial management practices between family and non-family Small and Medium Enterprises (SMEs) in the textile industry. We hypothesize that family SMEs use different sources of funding for new investments,...
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Internet Financial Disclosure: Evidence from Saudi Arabia and Oman
ABSTRACTThe purpose of this paper is to examine the nature and characteristics of voluntary internet disclosures by listed companies in Saudi Arabia and Oman. This paper uses archival data from listed companies on Tadawul Stock Exchange and Muscat Securities...
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The 2012 Review of Ifrs for Smes: Possible Responses from the Fiji Institute of Accountants
ABSTRACTThe International Accounting Standards Board (IASB) issued a paper reviewing the IFRS for SMEs in 2012 and invited public comments on changes the IASB had under consideration. There was no response from the Fiji Institute of Accountants (FIA),...
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Causality Test of Business Risk and Capital Structure in a Panel Data of Nigerian Listed Firms
ABSTRACTIn economic sense, some events may be subject to spill-over from economy-wide or world-wide shocks. For instance a country's fiscal policy, such as government spending, taxation, and borrowings, influence both the pattern of economic activity...
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The Influence of Corporation Governance Structure on Internal Control Audit Report Lag: Evidence from China
ABSTRACTThis paper examines whether corporation governance structure has influence on internal audit report lag (IARL). The study studies a sample of 1244 observations from Year 2008 to Year 2011, obtained from Shenzhen Stock Exchange in China. Regression...
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Detection and Prediction of Managerial Fraud in the Financial Statements of Tunisian Banks
ABSTRACTThis article models the detection and prediction of managerial fraud in the financial statements of Tunisian banks. The methodology used consist of examining a battery of financial ratios used by the Federal Deposit Insurance Corporation (FDIC)...
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Strategic Implications of Project Portfolio Selection
ABSTRACTThis paper evaluates the relationship between corporate strategy and quantitative financial criteria for choosing the optimal set of projects for the Capital Budget. On the basis of the competitive dynamics of the industry and the corporate strategy,...
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Vol. 6, No. 1, 2014

Determinants of the Bias and Inaccuracy of Management Earnings Forecasts
ABSTRACTThe safe harbor provisions have increased over the years, following the Private Securities Litigation Reform Act (PSLRA) of 1996 and the Securities Litigation Uniform Standards Act (SLUSA) of 1998. The objective is to encourage more earnings...
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When Do Companies Fund Their Defined Benefit Pension Plans?
ABSTRACTThis paper extends the accounting academic literature on pension funding strategy by looking at a more recent data set, directly examining contributions to defined benefit pension plans, and considering the effect of changing economic conditions...
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Marginal Tax Rates around the Hawaii Itemized Deduction Cliff
ABSTRACTThe State of Hawaii allows paid State taxes as an itemized deduction on the State income tax return. The deduction is available only for individuals with Federal adjusted gross income less than $200,000. Hawaii also limits total itemized deductions...
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The Role of Derivatives in the Financial Crisis and Their Impact on Security Prices
ABSTRACTThis study takes on two divergent notions concerning derivatives; that they are dangerous instruments (Warren Buffet) versus the concept that they help to reduce risk (Allen Greenspan). These notions are assessed from the perspective of the recent...
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The Impact of Ifrs Adoption during the 2008 Financial Crisis on the Relationship between Yield and Accounting Variables
ABSTRACTThis research tests the impact of the financial crisis on the informational content of accounting numbers. The study is based on IAS-IFRS in the French context. The period chosen in this study is 2006 to 2011, divided into two periods: Pre-crisis...
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Accounting and Auditing Practices in Non-Governmental Organizations: Evidence from Fiji
ABSTRACTThis paper examines the accounting and auditing practices in non-governmental organizations. It seeks to understand accounting processes and reporting practices in non-governmental organizations. Nongovernmental organizations have become important...
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A Standardized Net Income Shares Model to Develop Basic Child Support Guidelines
ABSTRACTResearch regarding child support typically focuses on the effects of child support awards and its underlying principles within child support models. However, researchers have invested little effort in the analysis of child support guideline comparisons...
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The Risk-Return Trade-Off of Investing in Latin American Emerging Stock Markets
ABSTRACTIn this paper we examine risk-return trade-off of investing in Latin American emerging stock markets. In particular, the study seeks to examine whether equities from Latin American emerging markets might have offered the Canadian investor high...
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Auditors' Perceptions of Audit Firm Rotation Impact on Audit Quality in Egypt
ABSTRACTThis study aims to explore professional auditors' perceptions of the impact of audit firm rotation on audit quality. It also investigates the possible benefits and determining factors of mandatory auditor rotation. A sample of 83 auditors was...
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Information Systems and Accounting Practices in Ghanaian Public Institutions
ABSTRACTThis study examines the effects of Information and Communication Technology on accounting practices in public institutions in Ghana. Data was collected from public institutions in Ghana using a questionnaire. The study revealed positive effects...
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Vol. 5, No. 2, 2013

Capital Gains Taxation and Stock Market Investments: Empirical Evidence
ABSTRACTThe objective of this study is to examine stock market investments responses to changes in capital gains tax rate. A priori, rational taxpayers are expected to respond to changes in this tax rate. For example, a reduction (increase) in capital...
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Does Experience Affect Auditors' Professional Judgment? Evidence from Puerto Rico
ABSTRACTAuditors use professional judgment to collect and evaluate evidence to issue an opinion on the fairness of a business entity's financial statements. Prior research finds that international auditing firms should consider cultural aspects when...
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A Dynamic Panel Model of Capital Structure and Agency Cost in Nigerian Listed Companies
ABSTRACTThis study examines the impact of agency costs on capital structure of Nigeria listed companies for the period of 2000-2006. Using a dynamic panel model, the study demonstrates the extent to which asset utilization helps explain the financing...
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Ownership Structure and Stock Repurchase Policy: Evidence from France
ABSTRACTThis article studies the relationship between ownership structure of French companies and their stock repurchase policy. According to financial theory, the presence of institutional investors negatively influences repurchasing policy because...
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The Impact of Economic Fluctuations on Earnings Forecasts
Prior studies in the area of management forecasts contain a common characteristic, they make no distinction as to the economic cycle of the U.S. when assessing voluntary earnings disclosures. This research tests whether voluntary earnings disclosures...
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Does a Size Limit Resolve Too Big to Fail Problems?
ABSTRACTDoes limiting the size of a large bank reduce its insolvency risk? This paper shows that the answer to this question depends on how exactly paring down of the bank size is done. In fact, the insolvency risk may go down or up depending on the...
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The Impacts of a Microfinance Lending Scheme on Clients in Ghana
ABSTRACTOwning to the success of the Grameen Bank and other microfinance institutions in recent years, microfinance institutions' role as a potential policy tool in poverty alleviation has received considerable attention. Empirical evidence from existing...
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The Effect of Type a Personality on Auditor Burnout: Evidence from Indonesia
ABSTRACTThis study examines the moderating effect of type A personality on the influence of role stressors (role conflict, role overload, and role ambiguity) on burnout. Most burnout research has focused on various environmental factors, while individual...
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Auditor Independence, Audit Fees Low-Balling, and Non-Audit Services: Evidence from Fiji
ABSTRACTThis study empirically examines the supply side of the market for non-audit services. In particular, a model for the supply side of the market for non-audit services is developed. This model is then tested using audit and non-audit fee data from...
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Vol. 5, No. 1, 2013

Employee Benefits and Stock Returns: A Look at Health Care Benefits
ABSTRACTThis study finds firms that pay their employees' health-care premiums earn average positive risk premiums and positive risk-adjusted excess returns. The problem of the study is to analyze risk premiums and risk adjusted returns of an equal-weighted...
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The Relationship between Financial Communication and Firm Performance: Evidence from France
ABSTRACTThis research identifies potential links between performance and the level of financial communication on the web. This study examines 216 firms quoted in 2010 on the Free Market of Paris. We use a content analysis of websites and scoring technique,...
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Internal Control and Financial Quality: Evidence from Post-Sox Restatement
ABSTRACTStudies of post-SOX restatements have examined the cause of the increase and have documented the association with internal controls in a negative light. In general, restatements result from internal control problems because internal controls...
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Stock Market and Tax Revenue Collection in Malaysia: Evidence from Cointegration and Causality Tests
ABSTRACTThis study empirically examined the relationship between stock market performance and taxation in Malaysia over the period 1980 to 2008. The Gregory Hansen methodology was utilized to examine which tax collected by Malaysia's Government most...
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Share Repurchases Announcement Effect on Earnings: Evidence from South Africa
ABSTRACTThis study investigates the effect share repurchases announcements have on earnings of companies listed on the Johannesburg Stock Exchange over a period of 8 years from 2001 to 2008. The study investigates 27 companies listed in the middle capitalization...
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The Impact of Ownership Structure on Voluntary Corporate Disclosure in Annual Reports: Evidence from Fiji
ABSTRACTThe extent of voluntary corporate disclosure by companies in annual reports in recent years has increased due to various factors. A number of prior studies examined the relationship between ownership concentration and voluntary corporate disclosure....
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Managerial Ownership, Leverage and Audit Quality Impact on Firm Performance: Evidence from the Malaysian Ace Market
ABSTRACTThis paper extends the agency cost literature by examining whether managerial ownership, leverage and audit quality are associated with higher performance of companies traded on the Malaysian ACE (Access, Certainty, Efficiency) Market. The sample...
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Generational Differences in Attitudes toward Deficit Reduction Policy
ABSTRACTIn an effort to understand the "generation gap" as it is manifested in attitudes toward current tax policy, this study compares survey responses from experienced tax professionals and inexperienced undergraduate tax students applied to the most...
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Indirect Labor Costs and Implications for Overhead Allocation
ABSTRACTCost accounting typically allocates indirect labor cost to cost object based on direct labor hours. The allocation process implicitly assumes that indirect labor costs vary proportionally with direct labor hours. The assumption of a linear relationship...
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Flexible Working Arrangement and Stress Management Training in Mitigating Auditor's Burnout: An Experimental Study
ABSTRACTThis study examines the effectiveness of two burnout mitigation strategies (flexible work arrangement and stress management training) on auditors' job outcomes. Burnout is characterized by emotional exhaustion, reduced personal accomplishment,...
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Vol. 4, No. 2, 2012

Value Relevance of Book and Tax Income: A Macroeconomic Conditions Perspective
ABSTRACTThis paper tests how macroeconomic conditions affect the value relevance of book and tax income. Based on regression coefficient estimates, more than 8% in the value relevance of book income is dependent on the interaction with a proxy for the...
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Why Higher Levels of Auditor-Provided Tax Services Lower the Likelihood of Restatements
ABSTRACTKinney et al. (2004) ask in the Journal of Accounting Research: Why do higher levels of auditor-provided tax services lower the chances of restatements? In resolving this question, this paper investigates the relationship between auditor-provided...
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Is the IRS a Sore Loser?
ABSTRACTLike all administrative agencies, the Internal Revenue Service is given a fair amount of authority to enforce the laws enacted by Congress. Taxpayers often question the amount of authority granted to the Internal Revenue Service, and whether...
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Distances and Networks: The Case of Mexico
ABSTRACTThe influence of six different distances on the structure of minimum spanning trees is presented in this paper. Measures of complex networks are built based on the closing prices of stocks of the main companies traded on the Mexican Stock Market....
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Factors Associated with Firm Performance: Empirical Evidence from the Kingdom of Saudi Arabia
ABSTRACTThis study investigates the relations between agency cost variables (firm size, leverage and auditor type) and the firm performance of 392 listed companies in the Saudi Stock Exchange (Tadawul) during 20072010. This study identifies two measurements...
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Residual Income versus Discounted Cash Flow Valuation Models: An Empirical Study
ABSTRACTValuation plays a central role in the financing, investing and operating decisions of companies and many methods are employed to approximate the true value of a company. Although these techniques are based on similar theory, they may generate...
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Comprehensive Income Disclosures: Evidence from Italy
ABSTRACTInternational Accounting Standard No. 1 was released in 2007. The standard required publicly traded companies to separately report comprehensive income in the financial statements. International Accounting Standard No. 1 prescribed two alternative...
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Could Peer-to-Peer Loans Substitute for Payday Loans?
ABSTRACTMany consumer advocates consider payday loans-short-term, uncollateralized loans with high interest rates- o be predatory. The demand for short-term funding has spurred the quest for a substitute, an effort encouraged and supported by regulators...
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An Algorithm for the Detection of Revenue and Retained Earnings Manipulation
ABSTRACTThis paper presents a statistical analysis confirming the former empirical findings that positive differences between the growth rates of P-Score and Z-score appears in financial statement data of companies involved in major financial fraud....
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The Impact of Ifrs for Smes on the Accounting Profession: Evidence from Fiji
ABSTRACTAt the turn of the millennium, the many corporate collapses and fraudulent financial reporting practices tarnished the reputation of accountants and resulted in a credibility crisis for the accounting profession. The profession responded by developing...
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Vol. 4, No. 1, 2012

Are Buybacks Increasing Eps?
ABSTRACTTrends indicate that treasury shares or buyback shares are gaining new momentum and intensity and maybe effecting reported earnings per share. This study was undertaken by evaluating the buyback activity of the Standard and Poor's 500, for the...
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Finding the Outer Limits of IRS Accounting Discretion: The Kollman Case
ABSTRACTThe statutory language of the Internal Revenue Code gives cognizance to the methods of accounting used by taxpayers for their financial reporting. The 1979 U.S. Supreme Court opinion of Thor Power acceded to the Internal Revenue Service a significant...
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Country versus Industry Effect on Board Structures
ABSTRACTWe examine the board structures of US and Indian firms in two industries. We examine three aspects of board structures: board size, board independence, and board leadership. The two industries selected for analysis are information technology...
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An Empirical Analysis of Market Reaction to Corporate Accounting Malfeasance
ABSTRACTThis study examines corporate accounting malfeasance from an exploratory and empirical perspective for 100 companies to determine if there is an association between the Jenkins recommendations and SOX requirements and to determine if there are...
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Portrait of a Company: Defined Benefit Pension Plan Sponsors
ABSTRACTThis study describes firms that sponsor defined benefit pension plans (DBPP) based on firm specific characteristics, financial and operating performance. Firms are classified into portfolios based on their funding levels and described accordingly....
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The Ethics of Tax Evasion: A Survey of Hispanic Opinion
ABSTRACTThe present paper is an empirical study, the goal of which is to determine the strength of various arguments that have been used to justify tax evasion and to determine whether results differ based on certain demographic variables. A survey instrument...
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A Comparison of Gradient Estimation Techniques for European Call Options
ABSTRACTAssuming the underlying assets follow a Variance-Gamma (VG) process, we consider the problem of estimating gradients of a European call option by Monte Carlo simulation methods. In this paper, we compare indirect methods (finite difference techniques...
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A Test of the Ohlson Model on the Italian Stock Exchange
ABSTRACTThis article belongs to the current in research literature, which is concerned with value relevance. Its main aim is to test the impact of the current and future accounting variables on the firm's market value, by analyzing these relations with...
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The Relationship between Accruals, Earnings, and Cash Flows: Evidence from Latin America
ABSTRACTThe relationships between earnings, accruals, and cash flows for selected Latin American countries (Mexico, Chile, and Argentina) are investigated in this study from 1990 to 2009. We find a negative relationship between accruals and cashflow...
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