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Definition
| Earnings management during import relief. Found that managers tried to benefit from import tax relief by making themselves look weaker through the use of negative discretionary accruals. |
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Definition
The larger the firm the more likely managers will use accounting procedures to lower income.
Firms that are larger are more visible and thus more likely to face political costs. |
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Term
| Political cost hypothesis |
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Definition
| the greater the exposure to political costs, the more likely managers are to use negative discretionary accruals. |
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Definition
Oil companies. When firms expect increase in profitability from price increases they will use negative discretionary accruals to make their company look less profitable and thus less likely to be targeted by politicians
This study looked at quarters not years |
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Antitrust investigations. Shows that managers use discretionary accruals during times of political investigation.
Dealt with companies who had monopoly powers. |
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Term
| Cahan, chavis, elmendorf 1997 |
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Definition
Chemical firms response to environmental legislation.
Firms expected to be more harmed by the impending legislation took more drastic measures to minimize risk. More negative accruals. Supports the political hypothesis |
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Three mile island.
does the market value exposure to political costs. |
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Tylenol incident.
suggested that new packing regulations had a negative effect on the whole industry. firms that directly competed with Tylenol had a less negative effect due to product substitution. |
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Definition
| Environmental disclosure. accident produced a negative effect on the industry due to future regulatory costs. Also found that firms with greater disclosures had less of a negative effect. |
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Definition
Alaskan oil spill.
firms with operations in alaska and larger firms appear to have a more negative reaction to costs. Firms still had an increase in value due to the increase in petroleum costs. |
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Term
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Definition
| Audit, Examined memory conjunction errors. Auditors make mistakes. 50 percent more likely to make a memory conjunction error for evidence that is consistent Downsides auditors were not making real audit decisions. |
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Definition
Audit, improve the understanding of how auditors make judgments in the strategic system audit task environment. auditors more likely to identify a risk in a firm that is trailing and less likely when the firm meets the industry norms.
Not real situation not real environment. |
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Term
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Definition
| Budget Based Contracts. Groups work best at moderate goal levels. This contradicts the positive correlation between difficulty and goals |
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Definition
Participation in budgeting.
Locus of control - whether or not people believe they are in control of their future. Found that people who had a high internal locus of control wanted to participate while people with a high external did not want to participate. |
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Term
| Dean, Ferris, and Konstans |
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Definition
Occupational Reality shock and Organizational commitment.
Recent graduates have expectations greater then what they actually do in their jobs. Accountants commitment to the job goes down when expectations are not met but not up when they are exceeded.
expectations were missed by more in public firms |
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Definition
Auditors effect on the busy season.
Hours worked attributed to job burnout. 60 hours a week during the busy season and 49 during the non busy season |
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