Robert J. Trulaske, Sr. College of Business (MU)The Robert J. Trulaske, Sr. College of Business is a college within the University of Missouri-Columbia.https://hdl.handle.net/10355/52412024-03-28T16:44:55Z2024-03-28T16:44:55ZAccrual persistence and accrual anomalyMartin, Xiumin, 1972-https://hdl.handle.net/10355/48242022-09-27T15:49:33Z2007-01-01T00:00:00ZAccrual persistence and accrual anomaly
Martin, Xiumin, 1972-
The first essay, "Inter-temporal accrual persistence and accrual anomaly" investigates whether accrual persistence and accrual anomaly vary with the state of economy. Prior accounting research argues that diminishing marginal returns on new investments drive lower persistence of accruals relative to cash flows. Macroeconomic research documents that marginal profitability is counter-cyclical, which implies that diminishing marginal returns on new investments are more pronounced during periods of expansions than recessions. Linking the cyclicality of diminishing returns on investments with the argument that diminishing returns to investments contribute to lower persistence of accruals relative to cash flows, this paper predicts that the differential persistence of accruals is greater during expansionary periods than recessionary periods. Using a U.S. sample from 1972 to 2003, I find that the differential persistence of accruals is greater during economic expansions than recessions. When I focus on the components of accruals, I find that depreciation, change in accounts receivable, change in raw materials,and change in finished goods are the main drivers of cyclical differential accrual persistence. These findings are robust to alternative conditioning sets, estimation procedures, and measures of the business cycle. I also find that investors are unable to assess the cyclical differential persistence of accruals, leading to higher returns (both raw and abnormal returns) from an accrual-based trading strategy during expansionary periods. The second essay "Can cyclical property of accrual persistence explain the accrual anomaly?" examines whether cyclical accrual persistence documented in the first essay can provide an explanation to accrual anomaly based on consumption based assets pricing theory. Specifically, I posit that accruals decrease in consumption risk because of cyclical property of accrual persistence (i.e., accruals are less persistent during economic expansions than during recessions). The implication is that the observed abnormal returns from accrual-trading strategy represent compensation for the underlying consumption risk. Using a U.S. sample from 1972 to 2003, I find that consumption risk decreases in the level of accruals. I also show that after controlling for other known risk factors, pricing kernel (a proxy for the state of economy) can explain about 11 percent of abnormal returns from accrual-based trading strategy. These findings are robust to alternative conditioning set and estimation procedures.
The entire dissertation/thesis text is included in the research.pdf file; the official abstract appears in the short.pdf file (which also appears in the research.pdf); a non-technical general description, or public abstract, appears in the public.pdf file.; Title from title screen of research.pdf file (viewed on September 28, 2007); Vita.; Thesis (Ph. D.) University of Missouri-Columbia 2007.
2007-01-01T00:00:00ZArchival evidence on bias in auditors' assessment of client risk and the consequences for audit fees and auditor changesHallman, Nicholashttps://hdl.handle.net/10355/606272022-09-27T19:35:58Z2016-01-01T00:00:00ZArchival evidence on bias in auditors' assessment of client risk and the consequences for audit fees and auditor changes
Hallman, Nicholas
As part of planning and performing financial statement audits, auditors are required to make judgments regarding client risk. These judgments permeate the audit process, driving decisions regarding client acceptance, audit pricing, the extent of audit testing, and the nature of auditors' written opinions. Although auditors may aim to assess each client's risk independently, prior research suggests individuals' draw on their idiosyncratic experiences and environments for benchmarks against which to contrast the case at hand. These "contrast effects" can result in judgments that deviate from those that would be reached using normative principles and may cause bias in auditors' assessment of client risk. Consistent with this theory, the archival evidence presented in this paper shows that, after controlling for clients' actual risk levels, auditors perform more (less) conservative audits and charge higher (lower) audit fees when clients appear riskier (less risky) in the context of other clients audited by the same practice office. Moreover, clients subject to increased (decreased) conservatism and higher (lower) audit fees due to auditors' biases are more (less) likely to switch auditors during the following period.
2016-01-01T00:00:00ZAre dividends and share repurchases substitutes? : evidence from the reaction of financial analystsDickson, Anamaria C.https://hdl.handle.net/10355/661612022-09-27T19:36:12Z2018-01-01T00:00:00ZAre dividends and share repurchases substitutes? : evidence from the reaction of financial analysts
Dickson, Anamaria C.
In this study, I propose a novel test that can contribute towards resolving whether repurchases do in fact substitute for dividends. I contend that using the reactions of financial analysts to announcements of dividends initiations / increases and share repurchases can effectively test whether repurchases do substitute for dividends. If the substitution hypothesis holds, then the analysts' changes in recommendations following the announcement of a dividend initiation or increase and a repurchase announcement should be the same, ceteris paribus. My findings show that when analysts' reactions include no changes, positive and negative changes in recommendation, dividends and repurchases are viewed as substitutes. However, when there is an actual change in the analysts' recommendation following a distribution announcement, the analysts downgrade more and upgrade less the firms that announce share repurchases programs as opposed to dividend initiations / increases. They are also more likely to make a recommendation change when there is a share repurchases announcement. Further, I explore whether the analysts' preference might be justified. Specifically, I investigate how the signal quality of the payout method, the potential for earnings management of the payout method, or behavioral biases might play a role in the analysts' decision making process. I find that, given an actual change in recommendation, financial analysts upgrade less and downgrade more firms with share repurchases announcements when the firms are associated with higher earnings management, during period of higher demand for dividends, and when the firms have been downgraded in the month preceding the announcement. Financial analysts view dividends and repurchases as substitutes post 2004 and when repurchases are classified as serial repurchases.
Dr. Stephen P. Ferris, Dissertation Supervisor.; Includes vita.; Field of study: Business administration.; "May 2018."
2018-01-01T00:00:00ZAssociative and item memory for brands among elderly consumersMohanty, Praggyanhttps://hdl.handle.net/10355/143022020-11-22T04:43:48Z2011-01-01T00:00:00ZAssociative and item memory for brands among elderly consumers
Mohanty, Praggyan
[ACCESS RESTRICTED TO THE UNIVERSITY OF MISSOURI AT REQUEST OF AUTHOR.] A key imperative for marketers is to generate high levels of brand awareness and create favorable and distinctive brand associations in the minds of consumers. Memory for brand information is typically created through brand-based experiences, which get stored in a person's episodic memory system. Past research suggests that episodic memory of an individual declines with age. Further, studies suggest that the effect of aging on two types of episodic memory, i.e., item memory and associative memory, is differential. Older adults compared to younger adults seem to have poorer associative memory than item memory. Episodic memory deficits in older adults can not only impede the brand building efforts of marketers but also compromise the quality of the former's brand choices. Therefore, the overarching objective of this dissertation was to study item and associative memory deficits among elderly consumers in a branding context and investigate managerially relevant ways to improve episodic memory for brand information. Specifically, this thesis looked at the effects of meaningfulness of brand logos (study 1) and relatedness between brand logos and brand names (study 2) on associative and item memory in elderly versus younger consumers. The dissertation thus adds to the existing body of literature on episodic memory decline among the elderly. In doing so, it also advances our knowledge of consumer behavior from a brand management standpoint.
Title from PDF of title page (University of Missouri--Columbia, viewed on May 22, 2012).; The entire thesis text is included in the research.pdf file; the official abstract appears in the short.pdf file; a non-technical public abstract appears in the public.pdf file.; Dissertation advisors: Dr. S. Ratneshwar and Dr. Moshe Naveh-Benjamin; Vita.; Includes bibliographical references.; "July 2011"
2011-01-01T00:00:00Z