Template-Type: ReDIF-Article 1.0 Author-Name: Akinloye Akindayomi Title: CAPITAL GAINS TAXATION AND STOCK MARKET INVESTMENTS: EMPIRICAL EVIDENCE Abstract: The 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 gains tax rates may make taxpayers to unlock (lock-in) substantial amounts of accrued (realizable) appreciated gains. The findings of this study however reveal that capital gains realization and not capital gains tax rates impacts stock market investments in the U.S. Classification-JEL: M40, M41 Keywords: Stock Market Investment, Capital Gains Tax Rates, Realized Capital Gains Journal: Accounting & Taxation Pages: 1-12 Volume: 5 Issue: 2 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v5n2-2013/AT-V5N2-2013-1.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:5:y:2013:i:2:p:1-12 Template-Type: ReDIF-Article 1.0 Author-Name: Carmen B. Ríos-Figueroa Author-Name: Rogelio J. Cardona Title: DOES EXPERIENCE AFFECT AUDITORS’ PROFESSIONAL JUDGMENT? EVIDENCE FROM PUERTO RICO Abstract: Auditors 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 planning an audit examination and that the experience and knowledge possessed by an auditor influences the decision-making processes in an audit. This paper examines whether experience could affect the professional judgment of auditors during the planning phase of an audit. The investigation consists of a survey made among auditors working in audit and accounting firms, Independent Practitioners, and university senior students majoring in accounting to determine if the years of work experience of an auditor influences the evaluation of the internal control environment and the assessment of fraud risk for a firm operating in different countries with different cultural characteristics. The results obtained suggest that experience does not seem to affect their decisions when they are based on professional judgment. Classification-JEL: F23, M40, M41, M42 Keywords: Experience, Culture, Internal Control, Fraud Risk, Individualism/Collectivism, Power Distance, Uncertainty Avoidance, Short and Long-Term Vision, Professional Judgment Journal: Accounting & Taxation Pages: 13-32 Volume: 5 Issue: 2 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v5n2-2013/AT-V5N2-2013-2.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:5:y:2013:i:2:p:13-32 Template-Type: ReDIF-Article 1.0 Author-Name: Dauda Mohammed Title: A DYNAMIC PANEL MODEL OF CAPITAL STRUCTURE AND AGENCY COST IN NIGERIAN LISTED COMPANIES Abstract: This 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 structure of Nigerian firms. The main finding shows an inverse relationship between capital structure and agency costs of Nigerian firms. Thus, the negative coefficient on the agency cost variable indicates that, on average, the management of Nigerian firms chose either to use retained earnings or to issue new equity offer. Studies have shown that managers have a natural tendency to be cautious about borrowing, given that they have more to lose if the firm goes into liquidation, compared to shareholders with a diversified asset portfolio. Hence, a rise in the ratio of total sales to total assets (agency cost) would mean that the management team is efficient in using the company’s assets to generate wealth for their shareholders. Classification-JEL: G32 Keywords: Capital Structure, Agency Costs, Nigeria Journal: Accounting & Taxation Pages: 33-44 Volume: 5 Issue: 2 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v5n2-2013/AT-V5N2-2013-3.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:5:y:2013:i:2:p:33-44 Template-Type: ReDIF-Article 1.0 Author-Name: Rim El Houcine Title: OWNERSHIP STRUCTURE AND STOCK REPURCHASE POLICY: EVIDENCE FROM FRANCE Abstract: This 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 the preference of these investors is to reinvest in projects. The theoretical hypotheses of interest alignment and entrenchment have been used to justify the relationship between management stockholding and repurchasing policy. We tested the validity of our hypotheses on a sample of 40 French companies using data from 2004-2008. The results show that institutional investors positively affect the repurchase because institutional investors can control managers by forcing them to repurchase stocks to pay their excess cash flows. Moreover, we found a positive relationship between management stockholding and the repurchase. This finding is explained by the power of entrenchment from the repurchase that can raise the stockholding percentage of managers who repurchase the stocks. Classification-JEL: G35, G32 Keywords: Stock Repurchases, Ownership Structure, Institutional Investors, Managerial Ownership Journal: Accounting & Taxation Pages: 45-54 Volume: 5 Issue: 2 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v5n2-2013/AT-V5N2-2013-4.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:5:y:2013:i:2:p:45-54 Template-Type: ReDIF-Article 1.0 Author-Name: Ronald A. Stunda Title: THE IMPACT OF ECONOMIC FLUCTUATIONS ON EARNINGS FORECASTS Abstract: 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 released during periods of an economic downturn differ from disclosures released during periods of economic expansion. In terms of bias and information content, findings suggest that forecasts tend to significantly differ during these distinctly different periods. With the U.S. in the grip of what may be a protracted recessionary period, these findings have practical and important implications for users and disseminators of forecast information. Classification-JEL: G10, M410 Keywords: Accounting, Forecasts, Security Markets Journal: Accounting & Taxation Pages: 55-64 Volume: 5 Issue: 2 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v5n2-2013/AT-V5N2-2013-5.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:5:y:2013:i:2:p:55-64 Template-Type: ReDIF-Article 1.0 Author-Name: Mohamed Drira Author-Name: Muhammad Rashid Title: DOES A SIZE LIMIT RESOLVE TOO BIG TO FAIL PROBLEMS? Abstract: Does 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 composition of assets and liabilities of the bank relative to its pre-paring down composition. In addition, this study investigates mean-standard deviation efficiency of a typical Canadian large bank and its various possible paring down scenarios and finds both the original bank and its pared-down versions are inefficient. It then suggests mean-standard deviation efficient compositions of assets and liabilities, which do not depend on limiting the size of the bank. Therefore, the findings of this paper raise a serious doubt about the validity of the limit on size solution to the too-big-to-fail problem. Classification-JEL: G21, G01, G18 Keywords: Banking, Too-Big-To-Fail, Assets and Liabilities Management, Mean-Variance Analysis Journal: Accounting & Taxation Pages: 65-77 Volume: 5 Issue: 2 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v5n2-2013/AT-V5N2-2013-6.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:5:y:2013:i:2:p:65-77 Template-Type: ReDIF-Article 1.0 Author-Name: Paul A. Onyina Author-Name: Sean Turnell Title: THE IMPACTS OF A MICROFINANCE LENDING SCHEME ON CLIENTS IN GHANA Abstract: Owning 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 research shows some positive results in poverty reduction from some microfinance programs. This paper adds to existing literature on the industry by evaluating the effects of microfinance on clients who have received loans from the Sinapi Aba Trust of Ghana. Our data show that earlier clients in the program received greater impacts and are more empowered from the program than new clients, even though the latter on average receive larger volumes of credit. We construct empowerment indicators, finding that years of membership duration with the SAT lending scheme matters in empowering clients. The results show that old clients are more likely to purchase assets, expand their businesses, and spend larger amounts on their children’s education than new clients. Classification-JEL: G23, O16 Keywords: MFIs, Credit, Impact, Assets, Income Journal: Accounting & Taxation Pages: 79-88 Volume: 5 Issue: 2 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v5n2-2013/AT-V5N2-2013-7.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:5:y:2013:i:2:p:79-88 Template-Type: ReDIF-Article 1.0 Author-Name: Intiyas Utami Author-Name: Ertambang Nahartyo Title: THE EFFECT OF TYPE A PERSONALITY ON AUDITOR BURNOUT: EVIDENCE FROM INDONESIA Abstract: This 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 differences also play an important role in the development of burnout (Maslach et al., 2001). Participants of this study are 58 auditors (junior, senior and manager) who work at public accounting firms in Yogyakarta, Semarang, Jakarta and Palembang. The regression analysis shows that type A personality intensifies the influence of role conflict and role overload on burnout. However, the research does not find the evidence the effect of role ambiguity on burnout. The paper concludes with a discussion of the implications of these results. Classification-JEL: M20 Keywords: Burnout, Type A Personality, Role Conflict, Role Overload, Role Ambiguity Journal: Accounting & Taxation Pages: 89-102 Volume: 5 Issue: 2 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v5n2-2013/AT-V5N2-2013-8.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:5:y:2013:i:2:p:89-102 Template-Type: ReDIF-Article 1.0 Author-Name: Arvind Patel Author-Name: Pranil Prasad Title: AUDITOR INDEPENDENCE, AUDIT FEES LOWBALLING, AND NON-AUDIT SERVICES: EVIDENCE FROM FIJI Abstract: This 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 Fijian listed companies from the year 1980 to 2010. We find that audit fee low-balling leads to increased supply of non-audit services. This result is statistically significant. We also find that Big 4 auditors supply less non-audit services compared to non-Big 4 auditors. Finally, we find that the longer the auditor tenure the lower the supply of non-audit services. However, both these results are statistically insignificant. This leads to a conclusion that non-audit services are being supplied for opportunistic reasons as opposed to efficiency reasons. Our results are robust to a number of sensitivity checks. Classification-JEL: M42 Keywords: Auditor Independence, Audit Fees, Non-Audit Fees Journal: Accounting & Taxation Pages: 103-120 Volume: 5 Issue: 2 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v5n2-2013/AT-V5N2-2013-9.pdf File-Format: Application/pdf Handle: RePEc:ibf:acttax:v:5:y:2013:i:2:p:103-120