does corporate governance influence earnings management in latin american markets although us and european research has documented improvement in earnings quality associated with corporate governance characteristics the situation in latin america is questionable given the business environment in which firms operate which is characterized by controlling family ownership and weak legal protection the purpose of this study is to examine the relation between the internal mechanisms of corporate governance and earnings management measured by discretionary accrual we use a sample of listed latin american non financial companies from the period 2006 2009 our results show how in the latin american context the role of external directors is limited and that boards which meet more frequently take a more active position in the monitoring of insiders so showing a lower use of manipulative practices in addition we find a non linear relation between insider ownership and discretionary accruals also pointing to the fact that ownership concentration may be a manipulative practices constrictor mechanism only when the ownership of main shareholders is moderate the findings have important policy implications since this is to the best of our knowledge the first study to analyze the relation between the effectiveness of the government and the earnings management behavior as policy implications we document how when a country implements controls aimed at reducing corruption strengthening the rule of law or improving the effectiveness of government this leads to a reduction in firm earnings management

regional price level variations and real household incomes in the united kingdom 1979 80 1993 johnston r mckinney m and stark t 1996 regional price level variations and real household incomes in the united kingdom 1979 80 1993 reg studies 30 567 578 for the years 1979 80 to 1993 relative regional price indices rrpis are construced under a variety of definitions the base data are an amalgamation of figures from the reward group s cost of living comparisons and the family expenditure surveys the rrpis are then used to adjust regional household weekly incomes and the impact examined on the inequality of income inequality is decomposed into within region and between region components both components are seen to increase over the time period but both the level and increase in the former are substantially larger than the latter a general conclusion is that inequality within regions far exceeds that between regions johnston r mckinney m et stark t 1996 la variation du niveau des prix regional et les revenus menagers reels au royaume uni de 1979 80 a 1993 reg studies 30 567 578

group loyalty and the taste for redistribution interpersonal preferences preferences that depend on the characteristics of others are typically hard to infer from observable individual behavior as an alternative approach this paper uses survey data to investigate interpersonal preferences i show that self reported attitudes toward welfare spending are determined not only by financial self interest but also by interpersonal preferences these interpersonal preferences are characterized by a negative exposure effect individuals decrease their support for welfare as the welfare recipiency rate in their community rises and racial group loyalty individuals increase their support for welfare spending as the share of local recipients from their own racial group rises these findings help to explain why levels of welfare benefits are relatively low in racially heterogeneous states

why do corrupt governments maintain public support this article addresses an issue often neglected by the current literature on political corruption why do citizens support corrupt governments the authors argue that people in countries where gove

detecting earnings management a new approach this paper provides a new approach to test for accrual based earnings management our approach exploits the inherent property of accrual accounting that any accrual based earnings management in one period must reverse in another period if the researcher has priors concerning the timing of the reversal incorporating these priors can significantly improve the power and specification of tests for earnings management our results indicate that tests incorporating reversals increase test power by around 40 and provide a robust solution for mitigating model misspecification arising from correlated omitted variables

measuring the spatial price differences in china with regional price parity methods the measurement of prices has been an important field in economics and a spatial price index is very useful in comparing the standards of living and well being across regions in a country this paper intends to measure the regional price parities rpps across different provincial areas in china with an urban sample of 140 goods and services in 2015 according to the framework of the international comparison program icp methodology the results show that the rpps that were estimated with commonly used approaches such as the gini elteto koves szulc geks geary khamis gk and weighted country product dummy wcpd are only slightly different the rpps of three regions including guangdong shanghai and zhejiang are greater than 1 with beijing 1 while the other 27 regions are all lower than 1 which represents price levels that are less than beijing in the extrapolation of the rpps from 2000 to 2014 a significant descending trend is found for the standard deviation series of the rpps over time that shows that the price differences across regions decreased during the extrapolating period this finding provides evidence of a phenomenon of spatial price converging in china finally a study on the deflation of provincial aggregates with the rpps reveals that the spatial price adjustment will change the ranks or relative importance of different regions in the country especially the measurement of income inequality proves that the gini coefficients of provincial income deflated by the rppgeks are all lower than the gini coefficients of unadjusted incomes

estimating uk regional price indices 1974 96 hayes p 2005 estimating uk regional price indices 1974 96 regional studies 39 333 344 this paper examines the behaviour and construction of regional expenditure indices published in the croner reward regional cost of living surveys for 1974 96 it identifies a number of problems in using these data as an appropriate deflator to the new earnings survey regional wages series in examining labour supply side decisions instead an alternative method with which to construct regional prices is recommended using a combination of data from croner reward from the published retail price index rpi and from the expenditure and food survey efs formerly known as the family expenditure survey whilst these new data suggest that regional inflation rates were not significantly different from one another over the sample period they point to an episode of increased regional price variation over the late 1980s and early 1990s this paper suggests that these alternative indices would be of interest when examin

earnings quality in uk private firms comparative loss recognition timeliness abstract uk private and public companies face substantially equivalent regulation on auditing accounting standards and taxes we hypothesize that private company financial reporting nevertheless is of lower quality due to different market demand regulation notwithstanding a large uk sample supports this hypothesis quality is operationalized using basu s 1997 time series measure of timely loss recognition and a new accruals based method the result is not affected by controls for size leverage industry membership and auditor size or by allowing endogenous listing choice the result enhances understanding of private companies which are predominant in the economy it also provides insight into the economics of accounting standards

on compliance with ethical standards in tax return preparation the statements on responsibilities in tax practice srtps provide guidance to the cpa when making decisions in tax practice many of these decisions are ethical in nature and have implications for tax compliance in this study a survey methodology is used to test whether the srtps affect decisions that cpas make the findings suggest that a clear majority of cpas follow the srtps when making ethical decisions relating to tax return preparation and that cpas follow the srtps more often than unlicensed preparers on half the issues tested however a statistically significant number of cpas do not follow the srtps and cpas do not follow the srtps any more often than unlicensed tax preparers on three issues

implications for gaap from an analysis of positive research in accounting based on extant literature we review the positive theory of gaap the theory predicts that gaap s principal focus is on control performance measurement and stewardship and that verifiability and conservatism are critical features of a gaap shaped by market forces we recognize the advantage of using fair values in circumstances where these are based on observable prices in liquid secondary markets but caution against expanding fair values to financial reporting more generally we conclude that rather than converging u s gaap with ifrs competition between the fasb and the iasb would allow gaap to better respond to market forces

the provision of public goods under alternative electoral incentives politicians who care about the spoils of office may underprovide a public good because its benefits cannot be targeted to voters as easily as pork barrel spending we compare a winner take all system where all the spoils go to the winner to a proportional system where the spoils of office are split among candidates proportionally to their share of the vote in a winner take all system the public good is provided less often than in a proportional system when the public good is particularly desirable we then consider the electoral college system and show that it is particularly subject to this inefficiency

incentives to cultivate a party vote in candidate centric electoral systems evidence from brazil a prominent question in comparative electoral studies concerns the so called personal vote typically scholars approach this question at a cross national as opposed to a cross party level in this

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

two sided learning and the ratchet principle i study a class of continuous time games of learning and imperfect monitoring a long run player and a market share a common prior about the initial value of a gaussian hidden state and learn about its subsequent values by observing a noisy public signal the long run player can nevertheless control the evolution of this signal and thus affect the market s belief the public signal has an additive structure and noise is brownian i derive conditions for an ordinary differential equation to characterize equilibrium behavior in which the long run player s actions depend on the history of the game only through the market s correct belief using these conditions i demonstrate the existence of pure strategy equilibria in markov strategies for settings in which the long run player s flow utility is nonlinear the central finding is a learning driven ratchet principle affecting incentives i illustrate the economic implications of this principle in applications to monetary policy earnings management and career concerns

on the optimal relation between the properties of managerial and financial reporting systems we develop a theoretical model of the firm that links properties stewardship vs valuation focus of financial reporting regimes with the informational properties of optimal managerial accounting systems we show that contrary to the standard textbook proposition properties of management and financial accounting systems are not independent significantly we provide an explicit connection between exogenous and observable properties of a firm s financial reporting system and the quality of the managerial accounting system on which manager s base real economic decisions as the quality of those economic decisions can also be inferred from publicly available data our theory generates new opportunities for empirical managerial accounting research on large nonproprietary samples further by being able to identify enhanced performance due to improved managerial accounting information our theory provides opportunities to gain a better understanding of the link between particular managerial accounting practices and the quality of the information produced

earnings volatility and earnings predictability abstract survey evidence indicates widely held managerial beliefs that earnings volatility is negatively related to earnings predictability in addition existing research suggests that earnings volatility is determined by economic and accounting factors and both of these factors reduce earnings predictability we find that the consideration of earnings volatility brings substantial improvements in the prediction of both short and long term earnings conditioning on volatility information also allows one to identify systematic errors in analyst forecasts which implies that analysts do not fully understand the implications of earnings volatility for earnings predictability

corruption as a self fulfilling prophecy evidence from a survey experiment in costa rica an influential body of scholarship argues that corruption behaves as a selffulfilling prophecy the idea of this work is that levels of corruption emerge endogenously as a result of a society wide coordination game in which ther individual returns to corrupt behavior are a function of how disposed towards corruption the other members of society are perceived as being an empirical implication of this logic is that if one were to exogenously perturb beliefs about societal levels of corruption upward willingness to engage in corruption should increase as a consequence the current paper evaluates this claim by utilizing an information experiment embedded in a large scale household survey conducted in the gran area metropolitana gam of costa rica from october 2013 to april 2014 n 4200 changes in beliefs about corruption were induced via the random assignment of an informational display depicting the increasing percentage of costa ricans who have experienced or directly observed an act of corruption from 2006 to 2011 the paper finds that on average assignment to this display relative to the control condition increased the probability that a respondent would be willing to pay a bribe to a police officer by approximately 0 04 to 0 08 thereby providing supporting evidence for the self fulfilling prophecy hypothesis

moral judgment and causal attributions consequences of engaging in earnings management recent well publicized accounting scandals have shown that the penalties outsiders impose on those found culpable of earnings management can be severe however less is known about how colleagues within internal labor markets respond when they believe fellow managers have managed earnings designers of responsibility accounting systems need to understand the reputational costs managers impose on one another within internal labor markets in an experimental study 159 evening mba students were asked to assume the role of a manager in a company and respond to a scenario in which another manager the target manager has the opportunity to engage in earnings management participants provided causal attributions assessed the morality of the target manager and indicated whether they would change their judgments about the target manager s reputation the study manipulated three between subjects factors 1 whether the target manager chose to engage in earnings management 2 whether the company s budgetary control system was rigid or flexible and 3 whether the target manager s work history was average or above average we found that causal attributions are affected more by the budgetary systems when the target did not manage earnings than when the manager did we also found that morality judgments were significantly associated with the target manager s behavior but not with the budgetary system in addition participants judgments about the target manager s reputation were more strongly associated with morality judgments than with causal attributions we discuss implications of the role of reputation in management control systems design

voter heterogeneity and political corruption abstract we show that policies that eliminate corruption can depart from socially desirable policies and this inefficiency can be large enough to allow corruption to live on political competition between an honest welfare maximiser and corrupt politicians is studied in our model the corrupt politician is at a distinct disadvantage there is no asymmetric information no voter bias and voters are fully rational yet corruption cannot be eliminated when voters have heterogeneous preferences

debt covenant violations and managers accounting responses abstract this paper examines accounting changes costs of default and accounting based covenants violated by 130 firms reporting violations in annual reports i find that managers of firms approaching default respond with income increasing accounting changes and that the default costs imposed by lenders and the accounting flexibility available to managers are important determinants of managers accounting responses i also document that private lending agreements are the first violated that net worth and working capital restrictions are the most frequently violated restrictions and that in 52 percent of the cases lenders require concessions from borrowers to resolve default

organizational influences on individual ethical behavior in public accounting a framework is presented for studying ethical conduct in public accounting practice four levels of analysis are distinguished individual local office multi office firm and professional institute several propositions are derived from the framework and discussed 1 the effects of ethical vs unethical behavior on an accountant s prospects for advancement are asymmetrical in nature 2 the way individuals perceive or frame the decision problem at hand will make an ethical response more or less likely 3 the economic incentives present in competitive markets influence the work goals of firms and offices and lead to ethical dilemmas for individuals and 4 initiatives at the firm or institute level aimed at compliance with professional ethical standards will by themselves have little effect on individual ethical behavior research into ethical behavior of practitioners will capture self conscious and biased responses unless it is designed so as to permit indirect observation and recording of spontaneous comments to assure valid research findings practitioners should be interviewed and their motives assessed indirectly a longitudinal approach is recommended beginning with students who are choosing an accounting career two types of questions for use in these interviews are described

regional prices and real incomes in the uk official figures on regional incomes in the uk are compiled on a nominal basis this paper develops a contemporary measure of relative regional prices in the uk which suggests that the impact on r

the political economy of government responsiveness theory and evidence from india the determinants of government responsiveness to its citizens is a key issue in political economy here we develop a model based on the solution of political agency problems having a more informed an politically active electorate strengthens incentives for governments to be responsive this suggests that there is a role both for democratic institutions and the mass media in ensuring that the preferences of citizens are reflected in policy the ideas behind the model are tested on panel data from india we show that public food distribution and calamity relief expenditure are greater controlling for shocks where governments face greater electoral accountability and where newspaper circulation is highest

bringing home the bacon an empirical analysis of the extent and effects of pork barreling in australian politics which electorates receive targeted funding and does targeted funding swing votes to answer these questions i analyze four discretionary programs funded by the australian federal government during the 2001 2004 election cycle controlling for relevant demographic characteristics of the electorate those electorates held by the governing coalition received a larger share of discretionary funding and a larger number of program grants among government seats funding does not appear to have been directed towards those that were more marginal more discretionary funding particularly on road building was associated with a larger swing towards the government in the 2004 election

the relevance of the value relevance literature for financial accounting standard setting another view this paper explains that value relevance research assesses how well accounting amounts reflect information used by equity investors and provides insights into questions of interest to standard setters a primary focus of financial statements is equity investment other uses of financial statement information such as contracting do not diminish the importance of value relevance research value relevance questions can be addressed using extant valuation models value relevance studies address econometric issues that otherwise could limit inferences and can accommodate and be used to study the implications of accounting conservatism r 2001 elsevier science b v all rights reserved jel classification m41 m44 g12

recognizing ethical issues an examination of practicing industry accountants and accounting students it has long been recognized that accountants practicing in business settings have a dual role 1 as employees they are bound to the organization and 2 as professionals they are bound by the profession s code of ethical conduct westra journal of business ethics 5 2 119 128 1986 these two roles highlight the need to recognize and consider both the ethical and economic implications of their decisions practicing industry accountants are commonly involved in a broad range of their firm s business practices and decision making and are increasingly exposed to the commercial aspects of their companies also during their education they were trained on their professional responsibilities however in general this education was not recent and may not have been reinforced by contrast accounting students have been recently and repeatedly exposed to and have knowledge about their professional responsibilities as an accountant but limited if any exposure to the commercial aspects of business consequently our first hypothesis predicts that the ethical sensitivity of practicing industry accountants will be lower than that of accounting students we find limited support for this hypothesis second we also examine company reward structure and predict that ethical sensitivity will be lower for those in a company with a reward structure narrowly focused only on financial goals as compared to those in a company with a broad reward structure e g including rewards for both financial and non financial goals third we predict that the difference in ethical sensitivity levels between those in a company with a narrow reward structure as compared to those in a company with a broad financial reward structure will be higher for practicing industry accountants compared to accounting students results from our study generally support these last two predictions ethical sensitivity is lower for those in a company with a reward structure narrowly focused only on financial goals as compared to those in a company with a broad reward structure suggesting that companies may be able to increase ethical awareness in their organizations by including non financial goals in their reward structures

electoral rules and corruption is corruption systematically related to electoral rules recent theoretical work suggests a positive answer but little is known about the data we try to address this lacuna by relating corruption to different features of the electoral system in a sample of about eighty democracies in the 1990s we exploit the cross country variation in the data as well as the time variation arising from recent episodes of electoral reform the evidence is consistent with the theoretical priors larger voting districts and thus lower barriers to entry are associated with less corruption whereas larger shares of candidates elected from party lists and thus less individual accountability are associated with more corruption individual accountability appears to be most strongly tied to personal ballots in plurality rule elections even though open party lists also seem to have some effect because different aspects roughly offset each other a switch from strictly proportional to strictly majoritarian elections only has a small negative effect on corruption jel e62 h3

the economics of fraudulent accounting we argue that earnings management and fraudulent accounting have important economic consequences in a model where the costs of earnings management are endogenous we show that in equilibrium low productivity firms hire and invest too much in order to pool with high productivity firms this behavior distorts the allocation of economic resources in the economy we test the predictions of the model using firmlevel data we show that during periods of suspicious accounting firms hire and invest excessively while managers exercise options when the misreporting is detected firms shed labor and capital and productivity improves our firm level results hold both before and after the market crash of 2000 in the aggregate our model provides a novel explanation for periods of jobless and investment less growth

the difficult transition from clientelism to citizenship lessons from mexico author s fox jonathan a abstract electoral competition is necessary but not sufficient for the consolidation of democratic regimes not all elections are free and fair nor do they necessarily lead to actual civilian rule or respect for human rights if there is more to democracy than elections then there is more to democratization than the transition to elections but in spite of the rich literature on the emergence of electoral competition the dynamics of political transitions toward respect for other fundamental democratic rights is still not well understood political democracy is defined here in classic procedural terms free and fair electoral contestation for governing offices based on universal suffrage guaranteed freedoms of association and expression accountability through the rule of law and civilian control of the military although analyses of democratization typically acknowledge that these are all necessary criteria most examine only electoral competition this study however develops a framework for explaining progress toward another necessary condition for democratization respect for associational autonomy which allows citizens to organize in defense of their own interests and identities without fear of external intervention or punishment

earnings quality evidence from the field abstract we provide insights into earnings quality from a survey of 169 cfos of public companies and in depth interviews of 12 cfos and two standard setters cfos believe that i above all high quality earnings are sustainable and repeatable specific characteristics include consistent reporting choices backing by actual cash flows and absence of one time items and long term estimates ii about 50 of earnings quality is driven by non discretionary factors such as industry and macro economic conditions iii in any given period about 20 of firms manage earnings to misrepresent economic performance and for such firms 10 of eps is typically managed iv earnings manipulation is hard to unravel from the outside but peer comparisons and lack of correspondence between earnings and cash flows provide helpful red flags in addition cfos disagree with current standard setting on a number of issues including the sheer number of promulgated rules the top down approach to rule making the neglect of the matching principle and the emphasis on fair value accounting they indicate that a rules based culture makes the audit function centralized and mechanical and hinders the development of audit professionals a summary impression from our work is that cfos view earnings quality as more of a single and unconditional characteristic in contrast to current research where measures of earnings quality are strongly conditional on the decision setting this cfo view is related to their idea of one number a single earnings metric that shapes both their interactions with external stakeholders and internal decision making

annual bonus schemes and the manipulation of earnings abstract using confidential data of executive specific short term bonus plans we investigate the extent to which executives manipulate earnings to maximize the present value of bonus plan payments as such this paper extends the work of healy 1985 like healy we find evidence consistent with the hypothesis that managers manipulate earnings downwards when their bonuses are at their maximum unlike healy we find no evidence that managers manipulate earnings downwards when earnings are below the minimum necessary to receive any bonus we demonstrate that healy s results at the lower bound are likely to be induced by his methodology

executive overconfidence and the slippery slope to financial misreporting abstract a detailed analysis of 49 firms subject to aaers suggests that approximately one quarter of the misstatements meet the legal standards of intent in the remaining three quarters the initial misstatement reflects an optimistic bias that is not necessarily intentional because of the bias however in subsequent periods these firms are more likely to be in a position in which they are compelled to intentionally misstate earnings overconfident executives are more likely to exhibit an optimistic bias and thus are more likely to start down a slippery slope of growing intentional misstatements evidence from a high tech sample and a larger and more general sample support the overconfidence explanation for this path to misstatements and aaers

the relevance of relative distribution favoritism information and vote choice in africa relative distribution whether one is favored or disfavored by government seems to matter to voters in many african countries but why i demonstrate theoretically that voters who do not have inform

behind the scenes the corporate governance preferences of institutional investors we survey institutional investors to better understand their role in the corporate governance of firms consistent with a number of theories we document widespread behind the scenes intervention as well as governance motivated exit these governance mechanisms are viewed as complementary devices with intervention typically occurring prior to a potential exit we further find that long term investors and investors that are less concerned about stock liquidity intervene more intensively finally we find that most investors use proxy advisors and believe that the information provided by such advisors improves their own voting decisions

the impact of performance based compensation on misreporting abstract this paper examines the effect of ceo compensation contracts on misreporting we find that the sensitivity of the ceo s option portfolio to stock price is significantly positively related to the propensity to misreport we do not find that the sensitivity of other components of ceo compensation i e equity restricted stock long term incentive payouts and salary plus bonus have any significant impact on the propensity to misreport relative to other components of compensation stock options are associated with stronger incentives to misreport because convexity in ceo wealth introduced by stock options limits the downside risk on detection of the misreporting

earnings management to avoid earnings decreases and losses this paper provides evidence that firms manage reported earnings to avoid earnings decreases and losses specifically in cross sectional distributions of earnings changes and earnings we lind unusually low frequencies of small decreases in earnings and small losscs and unusually high frequencies of small increases in earnings and small positive income we find evidence that two components of earnings cash flow from operations and changes in working capital are used to achieve increases in earnings we present two theories based on stakeholder use of information processing heuristics and prospect theory about the motivation for avoidance of earnings decreases and losses

decision making approaches and the propensity to default evidence and implications abstract this paper examines heterogeneity in the responsiveness to default options in a large state retirement plan focusing on individuals decision making approaches as well as their economic and demographic characteristics analyses of a survey of plan participants show that procrastination and the need for cognitive closure are important determinants of the likelihood of default this paper also explores an important implication of defaulting individuals who default are significantly more likely to subsequently express a desire to enroll in a different plan the desire to change plans is also correlated with numerous economic and decision making characteristics including procrastination

a contracting perspective on earnings quality abstract this paper analyzes the impact of signal to noise ratios and the autocorrelation of a performance measure on the principal s welfare in dynamic agencies with renegotiation we consider the impact of changes in the persistent transitory and reversible components of accounting earnings on its usefulness in valuation versus contracting increasing the persistent components and reducing the reversible components are generally desirable for valuation but not for contracting eliminating transitory components of earnings is generally desirable for valuation but not necessarily for contracting we discuss the contracting implications of differences in the autocorrelations of accounting earnings versus stock returns

adjustment to job loss in britain s major cities bailey n and turok i 2000 adjustment to job loss in britain s major cities reg studies 34 631 653 this paper examines the labour market consequences of severe employment decline in britain s major cities between 1981 and 1991 using labour market accounts significant adjustment to employment change occurred through out migration and commuting but unemployment in cities also rose although much of it was recorded as inactivity on average women were less able to adjust through out migration or commuting than men while women in lower skilled jobs showed much less adjustment than those in professional or managerial occupations this suggests that the creation of employment opportunities for less skilled occupations brings far greater direct benefits to the resident population of major cities than the creation of professional or managerial employment bailey n et turok i 2000 ajuster ala suppression d emplois dans les grandes villes de grande bretagne reg studies 34 631 653 a partir des ch

the varying political toll of concerns about corruption in good versus bad economic times under what conditions do citizens connect concerns about corruption to their evaluations of sitting executives in contrast to conventional scholarship positing a direct negative relationship between corruption and political support we build on a small but suggestive body of research to argue that this relationship is conditional on economic context we test this claim with national survey data collected in 19 presidential systems as part of the americasbarometer 2010 study using both fixed effects ordinary least squares and hierarchical linear regression analyses we show that individuals facing bad good collective economic conditions apply a higher lower penalty to presidential approval for perceived political corruption this result holds across both an individual level indicator of national economic assessment and a regional economic measure we further test and find less substantial results for the moderating influence of personal economic conditions on the political toll of corruption perce

the effect of ethical orientation and professional commitment on earnings management behavior the purpose of this study is twofold the first objective is to examine the impact of an individual s ethical ideology and level of professional commitment on the earnings management decision the second objective is to observe whether the presence of a personal benefit affects an individual s ethical orientation or professional commitment within the context of an opportunity to manage earnings using a sample of 375 undergraduate business majors our results suggest a significant relationship between an individual s ethical orientation and decision making further participants with higher levels of professional commitment seem to be less likely to engage in earnings management behavior and less likely to behave opportunistically these results have the potential to add to our understanding of certain behaviors in entry level personnel and should be of interest to managers practitioners academicians and researchers

clientelism and voting behavior evidence from a field experiment in benin the author conducted a field experiment in benin to investigate the impact of clientelism on voting behavior in collaboration with four political parties involved in the 2001 presidential elections clientelist and broad public policy platforms were designed and run in twenty randomly selected villages of an average of 756 registered voters using the survey data collected after the elections the author estimated the effect of each type of message by comparing voting behavior in the villages exposed to clientelism or public policy messages treatment groups with voting behavior in the other villages control groups the author found that clientelist messages have positive and significant effect in all regions and for all types of candidates the author also found that public policy messages have a positive and significant effect in the south but a negative and significant effect in the north in addition public policy messages seem to hurt incumbents as well as regional candidates finally the evidence indicates that female voters tend to have stronger preference for public policy platforms than male voters

who delivers partisan clients in the argentine electoral market why do some parties fail to benefit from patronage in pork ridden political systems this article analyzes the interaction between patronage and partisanship to explain why some incumbents are more likely to benefit from pork politics than others we explain such differences by focusing on political parties access to resources supply side and voters dependence on fiscal largesse demand side we show how these differences affect the patron s choice of public sector wages and employment we use subnational level data to show different electoral returns from patronage for the two major political coalitions in argentina peronism and the ucr alianza and their effect on preferences over public sector wages and employment w hy do some political parties fail to benefit from patronage in pork ridden political systems this article analyzes the interaction between patronage and partisanship to explain why some incumbents are more likely to benefit from pork politics than others we explain returns to patronage by highlighting differences in the political parties access to resources supply side and the voter s dependence on public sector jobs demand side we propose that just as political parties cater their policies to particular groups of voters they pursue different strategies when allocating pork in exchange for support on the supply side we highlight the importance of partisan biases in the fiscal and electoral institutions that regulate the access and distribution of public resources on the demand side we show that patronage is a distributive mechanism that provides different returns to voters with different skills and labor market expectations

real effects of accounting rules evidence from multinational firms investment location and profit repatriation decisions we analyze survey responses from nearly 600 tax executives to better understand corporate decisions about real investment location and profit repatriation our evidence indicates that avoiding financial accounting income tax expense is as important as avoiding cash income taxes when corporations decide where to locate operations and whether to repatriate foreign earnings this result is important in light of the recent research about whether financial accounting affects investment and in light of the decades of research on foreign investment that examines the role of cash income taxes but heretofore has not investigated the importance of financial reporting effects our analysis suggests that financial reporting is an important factor to be considered in the policy debates focused on bringing investment to the united states

earnings management the shapes of the frequency distributions of earnings metrics are not evidence ipso facto we provide evidence that the shapes particularly around zero of the frequency distributions of earnings metrics examined in the extant earnings management literature are affected by 1 deflation using for example price or market capitalization 2 sample selection criteria that lead to differential inclusion exclusion of observations to the left of zero versus observations to the right of zero implicit in studies focusing on firms followed by i b e s and explicit in studies partitioning on a variable differing between loss observations and profit observations 3 differences between the characteristics of observations to the left of zero and observations to the right of zero such as market pricing and analyst optimism pessimism or 4 a combination of these factors since the shapes of the frequency distributions of earnings metrics at zero are likely due to one of the above effects we conclude that the shapes cannot be used as ipso facto evidence of earnings management

does managerial sentiment affect accrual estimates evidence from the banking industry abstract we examine whether managerial sentiment is associated with errors in accrual estimates using public banks we find 1 managerial sentiment is negatively associated with loan loss provision estimates 2 future charge offs per dollar of provision are positively associated with sentiment when the provision is estimated and 3 the effects of sentiment are greater for firms with more uncertain charge offs results are similar for private banks suggesting accrual manipulation related to capital market incentives is unlikely to explain the results although economic fundamentals explain most of the variation in the provision we find sentiment has an incremental and economically meaningful effect