Susan Parker, Gary F. Peters and Howard F. Turetsky
When making going concern assessments, Statement on Auditing Standards No. 59 (Auditing Standards Board 1988) directs auditors to consider the nature of management's plans and…
Abstract
When making going concern assessments, Statement on Auditing Standards No. 59 (Auditing Standards Board 1988) directs auditors to consider the nature of management's plans and ability to mitigate periods of financial distress successfully. Corporate governance factors reflect attributes of control, oversight, and/or support of management's plans and actions intended to overcome financial distress. Correspondingly, this study investigates the impact of certain corporate governance factors on the likelihood of a going concern modification. Using survival analysis techniques, we examine a sample of 161 financially distressed firms for the time period 1988–1996. We find that auditors are twice as likely to issue a going concern modification when the CEO is replaced. We also find that going concern modifications are inversely associated with blockholder ownership. We also confirm Carcello and Neal's (2000) findings with respect to the association between an independent audit committee and an increased likelihood of modification. In a repeated events setting, we find that insider ownership and board independence are inversely associated with repeated going concern modifications. Our study concludes by proposing implications for the current financial reporting environment (including the Sarbanes‐Oxley Act of 2002) and future research avenues.
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Susan Parker, Gary F. Peters and Howard F. Turetsky
This study investigates the association of various corporate governance attributes and financial characteristics with the survival likelihood of distressed firms. To address the…
Abstract
This study investigates the association of various corporate governance attributes and financial characteristics with the survival likelihood of distressed firms. To address the manner in which firms evolve over time, we employ survival analysis techniques by incorporating Cox Proportional Hazards regressions. We longitudinally track an ex ante sample of 176 financially distressed firms. The results suggest that firms that replaced their CEO with an outsider, were more than twice as likely to experience bankruptcy. Furthermore, larger levels of blockholder and insider ownership over the sample period are positively associated with the likelihood of firm survival.
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Marco Pagani and Howard F. Turetsky
The purpose of this paper is to analyze the problems faced by Accounting and Finance (A&F) Departments concerning the hiring and retention of tenure/tenure‐track faculty members…
Abstract
Purpose
The purpose of this paper is to analyze the problems faced by Accounting and Finance (A&F) Departments concerning the hiring and retention of tenure/tenure‐track faculty members.
Design/methodology/approach
Analytic research.
Findings
Due to the rigorous Association to Advance Collegiate Schools of Business standards for “academically qualified” classification, increasing enrollment for A&F majors, and demographic trends of faculty members, it is becoming very challenging to hire and retain high‐quality academicians. This challenge is especially dire for public institutions of higher learning that are facing budget cuts and possible steep salary inversion. As an example, the average salary of US faculty members are compared to the salaries allowed under the California State University (CSU) collective bargaining agreement. The paper analytically argues that unless CSU A&F faculty members' salaries are allowed to reflect market conditions, severe negative externalities will impact the educational sector and A&F professionals.
Originality/value
Alumni, the A&F professionals, university administrators and other stakeholders must be made aware of the “perfect storm” on the horizon and the severe consequences that loom in its wake. It will take the collective “wisdom” to provide the necessary strength to resolve these critical issues. Hopefully, the distress siren will not only be heard, but listened to and addressed in a timely manner, so that rather solemn consequences can be avoided. The needs of the college communities at large should not be thwarted by existing inappropriate funding mechanisms.
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Janis K. Zaima, Howard F. Turetsky and Bruce Cochran
Studies that examine the relationship of economic value added (EVA) to market value did not isolate the EVA effect in conjunction with controlling for the economic effect of the…
Abstract
Studies that examine the relationship of economic value added (EVA) to market value did not isolate the EVA effect in conjunction with controlling for the economic effect of the market. Since the EVA metric is viewed as value‐added apart from the market, operational managers will benefit from a procedure that separates the market driven versus firm driven (EVA) effects. Our paper examines the effects of the economy and EVA on MVA. The results indicate that EVA and GDP significantly affect MVA. Furthermore, the MVA‐EVA relationship shows a systematic bias between the largest MVA firms and the smallest MVA firms. Overall, our study provides implications for corporate executives utilizing EVA to evaluate managerial performance linked to MVA.
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Howard F. Turetsky and Thomas R. Tudor
The time dimension of a country is a key determinant of the time horizon prevalent in the business sector. The long‐term horizons of Japan compared with the short‐term horizons of…
Abstract
The time dimension of a country is a key determinant of the time horizon prevalent in the business sector. The long‐term horizons of Japan compared with the short‐term horizons of the United States are integral parts of their distinct business ideologies. There is a direct impact on their respective financial practices. A comparative analysis of the financial management ideologies, practices and techniques, within the framework of time horizon, offers an explanation of Japan's inordinate economic success in the global market.
Elizabeth Addy, Isaac Ayitey and Emmanuel S. Adabor
The purpose of the study is to identify barriers to collaboration among female administrators at a Ghanaian technical university (TU), based on the social identity theory (SIT).
Abstract
Purpose
The purpose of the study is to identify barriers to collaboration among female administrators at a Ghanaian technical university (TU), based on the social identity theory (SIT).
Design/methodology/approach
A mixed-method approach was adopted, integrating qualitative interviews of 15 female administrators and completing structured questionnaires from 117 randomly sampled female administrators. The SIT, as the analytical framework, identified themes emerging from the data on barriers to collaboration among female administrators. While exploratory factor analysis identified measures of factors hindering collaborations, the use of structural equation modeling (SEM) enabled the confirmation of relationships among the barriers to collaboration with female administrators.
Findings
There existed statistically significant relationships between four of the barriers: intergroup relations conflict, trust with stakeholders and among females and structural barriers (SBs). For the quantitative analysis, it was found that SBs, intergroup relations, conflict and trust were statistically significant except for weak cultures. For the qualitative, results showed that SBs, lack of trust with stakeholders and among females and intergroup conflict hinder collaboration.
Research limitations/implications
The study has a limited scope in using only one TU and focusing on a particular gender. The implications of this research will enrich the literature on barriers to female administrative collaboration in technical education based on the SIT.
Practical implications
Promoting administrative collaborations in the TU will ensure sustainability and efficient administrative systems.
Social implications
Institutional policies should include gender inclusivity and equality on networking opportunities and provide mentorship programs for efficient administrative systems.
Originality/value
We used the SIT to determine barriers to collaboration among female administrators in a technical education institution, and the mixed methodology added a unique dimension to the study.
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Virgin Dones, Jose Flecha-Ortiz, Maria Santos-Corrada and Evelyn Lopez
At the onset of the COVID-19 pandemic, social distancing measures and diffuse communication by media led to consumers’ uncontrolled product purchases worldwide. This phenomenon…
Abstract
Purpose
At the onset of the COVID-19 pandemic, social distancing measures and diffuse communication by media led to consumers’ uncontrolled product purchases worldwide. This phenomenon was described as a psychological effect experienced by fictitious scarcity, anxiety and herd mentality exacerbated by the media. This exploratory study aims to analyze the impact of risk communication on the perceived risk from the psychological dimension of consumer behavior amid the COVID-19 pandemic.
Design/methodology/approach
An exploratory study was conducted through an electronic survey one week after implementing social distancing measures in Puerto Rico. With a sample of 353 participants, the data analysis was carried out by PLS-SEM, partial least squares structural equations (PLS-MGA), multi group test (MGA) and hierarchical component models to answer the research hypotheses.
Findings
The results revealed that risk communication activates the perceived psychological risk during the COVID-19 pandemic, and the way in which the consumer faces the psychological risk is explained by the perceptions of scarcity and the bandwagon effect.
Originality/value
To the best of the authors’ knowledge, this study is a pioneer in presenting relationships between risk communication and perceived risk in consumer behavior, a topic that needs to be addressed in the academic literature. The research makes significant contributions to the study of consumer behavior by empirically validating the three phases of the Conchar model – risk framing, risk assessment and risk evaluation – where risk communication offers an excellent delineation to understand the consumer’s behavior during a pandemic.
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Seth D. Baum, Stuart Armstrong, Timoteus Ekenstedt, Olle Häggström, Robin Hanson, Karin Kuhlemann, Matthijs M. Maas, James D. Miller, Markus Salmela, Anders Sandberg, Kaj Sotala, Phil Torres, Alexey Turchin and Roman V. Yampolskiy
This paper aims to formalize long-term trajectories of human civilization as a scientific and ethical field of study. The long-term trajectory of human civilization can be defined…
Abstract
Purpose
This paper aims to formalize long-term trajectories of human civilization as a scientific and ethical field of study. The long-term trajectory of human civilization can be defined as the path that human civilization takes during the entire future time period in which human civilization could continue to exist.
Design/methodology/approach
This paper focuses on four types of trajectories: status quo trajectories, in which human civilization persists in a state broadly similar to its current state into the distant future; catastrophe trajectories, in which one or more events cause significant harm to human civilization; technological transformation trajectories, in which radical technological breakthroughs put human civilization on a fundamentally different course; and astronomical trajectories, in which human civilization expands beyond its home planet and into the accessible portions of the cosmos.
Findings
Status quo trajectories appear unlikely to persist into the distant future, especially in light of long-term astronomical processes. Several catastrophe, technological transformation and astronomical trajectories appear possible.
Originality/value
Some current actions may be able to affect the long-term trajectory. Whether these actions should be pursued depends on a mix of empirical and ethical factors. For some ethical frameworks, these actions may be especially important to pursue.