Template-Type: ReDIF-Article 1.0
Author-Name: Andrew A. Anabila
Author-Name: EunYoung Whang
Title: DETERMINANTS OF THE BIAS AND INACCURACY OF MANAGEMENT EARNINGS FORECASTS
Abstract: The 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 guidance by managers. However, a number of firms like Coca
Cola and Gillette moved to abandon quantitative earnings forecasts, due to concerns over the markets’
response when they miss their forecasts. This study examines the determinants of management earnings
forecasts bias and inaccuracy. The evidence suggests that forecast bias and inaccuracy are not
systematically associated with diversification however, are associated with the fraction of nonoperating
assets. Also, capital structure, audit quality and institutional holdings are systematic determinants of
forecast bias and inaccuracy. Finally, industry attributes of munificence, dynamism and concentration
are indicators of inherent imperfections of management forecasts, but are exogenous to management’s
control. The reasons for, and implications of these findings are discussed.
Classification-JEL: M41, M48 
Keywords: Management Forecasts, Bias, Inaccuracy, Determinants, Litigation Costs, Safe Harbor,
Munificence, Dynamism, Concentration. All Data Are Available from the Public Sources
Mentioned
Journal: Accounting & Taxation
Pages: 1-12
Volume: 6 
Issue: 1
Year: 2014
File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v6n1-2014/AT-V6N1-2014-1.pdf
File-Format: Application/pdf
Handle: RePEc:ibf:acttax:v:6:y:2014:i:1:p:1-12

Template-Type: ReDIF-Article 1.0
Author-Name: Denise A. Jones
Title: WHEN DO COMPANIES FUND THEIR DEFINED BENEFIT PENSION PLANS?
Abstract: This 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 over time on pension plan funding. I find that the average funded
status of defined benefit pension plans has changed over time in response to changing market conditions.
In addition, managers respond to these changes differently depending on firm specific incentives to make
contributions to their pension plans. I find that companies that have employees protected by unions, more
costly plans, higher levels of cash from operations, higher levels of plan underfunding, tax incentives, and
debt contracting incentives contribute more to their pension plans. In contrast, I find that companies with
other investment opportunities for their free cash, and companies with pension plans assets earning
higher returns contribute less to their pension plans. This paper has implications for regulators and
standard setters considering how to deal with pension funding shortfalls, accounting professionals
auditing companies with pension plans, CFOs determining their company’s pension funding strategy, and
investors and creditors evaluating the risks that companies with defined benefit pension plans are taking
on.
Classification-JEL: J32, M41, M59 
Keywords: Accounting for Defined Benefit Pension Plans, Pension Plan Funded Status
Journal: Accounting & Taxation
Pages: 13-23
Volume: 6 
Issue: 1
Year: 2014
File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v6n1-2014/AT-V6N1-2014-2.pdf
File-Format: Application/pdf
Handle: RePEc:ibf:acttax:v:6:y:2014:i:1:p:13-23

Template-Type: ReDIF-Article 1.0
Author-Name: Terrance Jalbert
Author-Name: Gary Fleischman
Author-Name: Mercedes Jalbert
Title: MARGINAL TAX RATES AROUND THE HAWAII ITEMIZED DEDUCTION CLIFF
Abstract: The 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 to $50,000 for individuals with Federal adjusted gross
income of $200,000 or above. These provisions create a tax cliff that implies extraordinary marginal tax
rates. The added dollar of income from $199,999 to $200,000 triggers a loss of the entire tax paid
deduction and caps itemized deductions at $50,000. We compute marginal tax rates for adjusted gross
income levels around the $200,000 tax cliff. Results indicate marginal tax rates reach levels as high as
367,100 percent. The paper provides taxpayers with concise information regarding the importance of
these Hawaii tax cliffs and suggests policy changes.
Classification-JEL: H2, H71 
Keywords: Hawaii State Taxes, Marginal Tax Rates
Journal: Accounting & Taxation
Pages: 25-38
Volume: 6 
Issue: 1
Year: 2014
File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v6n1-2014/AT-V6N1-2014-3.pdf
File-Format: Application/pdf
Handle: RePEc:ibf:acttax:v:6:y:2014:i:1:p:25-38

Template-Type: ReDIF-Article 1.0
Author-Name: Ronald A. Stunda
Title: THE ROLE OF DERIVATIVES IN THE FINANCIAL CRISIS AND THEIR IMPACT ON SECURITY PRICES
Abstract: This 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 Financial Crisis in which derivatives were assigned a good
deal of the blame for the meltdown. This study analyzes three different study periods; Pre-Crisis (2003,
2004, 2005), Crisis (2008, 2009, 2010), and Post-Crisis (2011, 2012, 2013-1st quarter). In addition, the
study also analyzes three different groups of firms containing 100 firms each; firms engaging in the use of
derivatives and accepting TARP funds, firms engaging in derivatives and not accepting TARP funds, and
firms not engaging in derivatives and not accepting TARP funds. Results indicate that for Crisis and
Post-Crisis periods, investors tend to discount accounting earnings releases in making investment
decisions. For the firms using derivative and not accepting TARP funds and firms not using derivatives
and not accepting TARP funds, the results across all three study periods are almost identical, accounting
earnings reflect positive information-enhancing signals on security prices. This does not mean that
security prices continued a steady upward trek, but only that investors placed a greater positive reliance
on earnings in making investment decisions, in other words, they tended to not discount earnings
releases.
Classification-JEL: G3, M41, N2 
Keywords: Derivatives, Security Prices, TARP
Journal: Accounting & Taxation
Pages: 39-50
Volume: 6 
Issue: 1
Year: 2014
File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v6n1-2014/AT-V6N1-2014-4.pdf
File-Format: Application/pdf
Handle: RePEc:ibf:acttax:v:6:y:2014:i:1:p:39-50

Template-Type: ReDIF-Article 1.0
Author-Name: Salem Lotfi Boumediene
Author-Name: Olfa Nafti
Author-Name: Emna Boumediene
Title: THE IMPACT OF IFRS ADOPTION DURING THE 2008 FINANCIAL CRISIS ON THE RELATIONSHIP
BETWEEN YIELD AND ACCOUNTING VARIABLES
Abstract: This 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 2006-2007 and post-crisis 2009-2010-2011. The results show the
2008 financial crisis contributed to reducing the information content of accounting numbers due to lack
of confidence created by investors towards the information published on the basis of international
standards. 
Classification-JEL:  
Keywords: 
Journal: Accounting & Taxation
Pages: 51-67
Volume: 6 
Issue: 1
Year: 2014
File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v6n1-2014/AT-V6N1-2014-5.pdf
File-Format: Application/pdf
Handle: RePEc:ibf:acttax:v:6:y:2014:i:1:p:51-67

Template-Type: ReDIF-Article 1.0
Author-Name: Arvind Patel
Author-Name: Pranil Prasad
Title: ACCOUNTING AND AUDITING PRACTICES IN NONGOVERNMENTAL ORGANIZATIONS: EVIDENCE
FROM FIJI
Abstract: This 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 institutions in world affairs but accounting research
has not developed significant interest in their operations and accounting practices. We use content
analysis on the annual reports of 20 non-governmental organizations operating in Fiji. The results show
variations in the accounting and auditing practices of the non-governmental organizations. Further
analysis indicates that a number of factors influence the accounting and auditing practices of nongovernmental
organizations. Our analysis shows that financial reporting practices are in part shaped by
the requirements of donor agencies and influence of specific stakeholder groups. We also find that the
need to legitimize their operations also influences the accounting and auditing practices of nongovernmental
organizations. This paper contributes to the limited empirical research on the accounting
and auditing practices of non-governmental organizations in developing markets. 
Classification-JEL: M40, M41 
Keywords: Non-governmental Organizations, Accounting, Auditing
Journal: Accounting & Taxation
Pages: 69-77
Volume: 6 
Issue: 1
Year: 2014
File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v6n1-2014/AT-V6N1-2014-6.pdf
File-Format: Application/pdf
Handle: RePEc:ibf:acttax:v:6:y:2014:i:1:p:69-77

Template-Type: ReDIF-Article 1.0
Author-Name: Juan Pablo Navarro Acevedo
Title: A STANDARDIZED NET INCOME SHARES MODEL TO
DEVELOP BASIC CHILD SUPPORT GUIDELINES
Abstract: Research 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 or in the development of analyses to determine whether
state adopted guidelines seem reasonable based on state-specific macroeconomic variables. This
analysis intends to develop a model to determine the reasonableness of child support guidelines for states
that use the income shares method based on the net income of both parents. Further, it intends to suggest
that the development of a standard model is possible and, to a certain extent, needed, to obtain interstate
uniformity. Findings suggest that the implementation of such a model could lead to more equitable and
uniform basic child support awards.
Classification-JEL: D11, D31, H31, K36, M49, M59 
Keywords: Child Support, Basic Child Support Awards, Income Shares Model, Forensic Accounting,
Family Law
Journal: Accounting & Taxation
Pages: 79-92
Volume: 6 
Issue: 1
Year: 2014
File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v6n1-2014/AT-V6N1-2014-7.pdf
File-Format: Application/pdf
Handle: RePEc:ibf:acttax:v:6:y:2014:i:1:p:79-92

Template-Type: ReDIF-Article 1.0
Author-Name: Rishma Vedd
Author-Name: Paul Lazarony
Title: THE RISK-RETURN TRADE-OFF OF INVESTING
IN LATIN AMERICAN EMERGING STOCK MARKETS
Abstract: In 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 returns for a relatively low level of risk when combined into a
portfolio of Canadian shares. Optimal portfolios were derived based on historic (ex-post) observations
and evaluated utilizing the mean return per unit of risk (MRPUR) performance measure. In particular,
the performance of the MRPUR-optimal emerging market portfolio was compared with the MRPUR of a
portfolio consisting solely of Canadian shares to determine whether any benefits resulted from
diversifying into the emerging stock markets over the ten-year periods. The results revealed substantial
differences in the risk-return characteristics of the MRPUR-optimal portfolios.
Classification-JEL: G11, G15 
Keywords: Emerging Stock Market, Optimal Portfolio, Risk-Return Characteristics, Equity
Portfolio, Portfolio Diversification
Journal: Accounting & Taxation
Pages: 93-104
Volume: 6 
Issue: 1
Year: 2014
File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v6n1-2014/AT-V6N1-2014-8.pdf
File-Format: Application/pdf
Handle: RePEc:ibf:acttax:v:6:y:2014:i:1:p:93-104

Template-Type: ReDIF-Article 1.0
Author-Name: Ahmed Anis
Title: AUDITORS' PERCEPTIONS OF AUDIT FIRM
ROTATION IMPACT ON AUDIT QUALITY IN EGYPT
Abstract: This 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 drawn from a group of large firms and another of smaller firms in Egypt. Data
were analyzed using one sample t-test; the findings indicate that auditors’ perceived mandatory rotation
of auditors to have a positive effect on audit quality, a negative effect on client-specific knowledge, and a
positive impact on auditors’ independence. The impact from the auditors’ perspective of industry
specialization and fee dependence on the relationship between mandatory auditor rotation and audit
quality was also determined.
Classification-JEL: M 
Keywords: Mandatory Auditor Rotation; Audit Quality; Auditor's Independence; Egypt
Journal: Accounting & Taxation
Pages: 105-120
Volume: 6 
Issue: 1
Year: 2014
File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v6n1-2014/AT-V6N1-2014-9.pdf
File-Format: Application/pdf
Handle: RePEc:ibf:acttax:v:6:y:2014:i:1:p:105-120

Template-Type: ReDIF-Article 1.0
Author-Name: Edward Yeboah
Author-Name: Kwame Owusu Kwateng
Author-Name: Clement Oppong
Title: INFORMATION SYSTEMS AND ACCOUNTING
PRACTICES IN GHANAIAN PUBLIC INSTITUTIONS
Abstract: This 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 of Information and Communication Technology, such
as timely delivery of financial statements, producing error free financial statements and the creation of
avenue to access financial information. However, lack of Information Technology expertise, suitability
and cost of accounting software and data security were seen as a major challenge to the adoption and use
of Information and Communication Technology in public institutions. Though Information and
Communication Technology has the potential to improve the efficiency and effectiveness of public sector
accounting in Ghana, it must be backed by constant employee training and regular software upgrades to
meet international accounting standards.
Classification-JEL: M15, M41, M48  
Keywords: Public Institutions, Accounting Information Systems, Information and Communication
Technology
Journal: Accounting & Taxation
Pages: 121-132
Volume: 6 
Issue: 1
Year: 2014
File-URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v6n1-2014/AT-V6N1-2014-10.pdf
File-Format: Application/pdf
Handle: RePEc:ibf:acttax:v:6:y:2014:i:1:p:121-132