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Advantageous Comparison and the Slippery Slope to Earnings Management

Advantageous Comparison and the Slippery Slope to Earnings Management
Author: Timothy Joseph Brown
Publisher:
Total Pages: 100
Release: 2013
Genre:
ISBN:

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Schrand and Zechman (2012) posit that managers who engage in severe earnings management sometimes go down the "slippery slope," in which the amount of earnings management by a company increases over time. This paper proposes that psychological forces can encourage this pattern. I show that, under certain circumstances, engaging in a small amount of earnings management alters the manager's beliefs about the appropriateness of the act, which makes further earnings management more likely. Specifically, I predict and find in two experiments that making an initial decision to manage earnings creates a desire for rationalization. Participants presented with an egregious example of earnings management, which is commonly the focus of enforcement actions and press reports, engage in rationalization through a mechanism called "advantageous comparison" by which they conclude that what they did was relatively innocuous and therefore appropriate. My analysis also indicates that participants do not infer a signal about regulator intentions or the commonality of earnings management from the egregious example, and that presenting participants with an article detailing a similar example of earnings management mitigates advantageous comparison. These results have implications for academics interested in how fraud might accrete over time and for regulators and practitioners who are interested in preventing it.


Advantageous Comparison and Rationalization of Earnings Management

Advantageous Comparison and Rationalization of Earnings Management
Author: Tim Brown
Publisher:
Total Pages:
Release: 2014
Genre:
ISBN:

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This paper proposes that psychological factors can change managers' beliefs about earnings management when they choose to engage in it. I show that, under certain circumstances, engaging in a small amount of earnings management alters a manager's beliefs about the appropriateness of the act, which may increase the likelihood of further earnings management. Specifically, I predict and find in two experiments that participants who initially choose to manage earnings are motivated to rationalize their behavior. Participants who are exposed to an egregious example of earnings management (commonly the focus of enforcement actions and press reports) have the opportunity to rationalize their behavior through a mechanism called "advantageous comparison," where participants compare their behavior against the egregious example and conclude that what they did was relatively innocuous and appropriate. My analysis also indicates that presenting participants with an example of earnings management that is similar to the initial decision they made mitigates advantageous comparison. These results have implications for academics interested in how earnings management, and perhaps fraud, can accrete over time and for regulators and practitioners who are interested in preventing it.


Boards That Excel

Boards That Excel
Author: B. Joseph White
Publisher: Berrett-Koehler Publishers
Total Pages: 273
Release: 2014-08-18
Genre: Business & Economics
ISBN: 1626562237

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"Having served on numerous corporate and nonprofit boards, former business school dean and university president White has a surprising message--many directors don't understand their roles as stewards. Rather than seeing boards as mere vehicles for oversight and basic monitoring, he shows, in detail and with hundreds of real-world anecdotes, how boards can do better"--


Selling Hope, Selling Risk

Selling Hope, Selling Risk
Author: Donald C. Langevoort
Publisher: Oxford University Press
Total Pages: 225
Release: 2016-05-06
Genre: Business & Economics
ISBN: 019022567X

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In the midst of globalization, technological change, and economic anxiety, we have deep doubts about how well the task of investor protection is being performed. In the U.S., the focus is on the Securities & Exchange Commission. Part of the explanation is economic and political: the failure to know the right balance between investor protection and capital formation, and the resulting battle among interest groups over their preferred solutions. In Selling Hope, Selling Risk, author Donald C. Langevoort argues that regulation is also frustrated at nearly every turn by human nature, as exhibited both on the buy-side (investors) and sell-side (corporate executives, bankers, stockbrokers). There is plenty of savvy and guile, but also ample hope, fear, ego, overconfidence, social contagion and the like that persistently filter and distort the messages regulators try to send. This book is the first sustained effort to link the key initiatives of securities regulation with our burgeoning awareness in the social sciences of how people and organizations really behave in economic settings. It examines why corporate fraud occurs and how best to deter it and compensate its victims; the search for an edge via insider trading; the disclosure apparatus and its gatekeepers; sales efforts and manipulation in Ponzi schemes, internet scams, private offerings and crowdfunding; and how this all helps explain the recent global financial crisis. It ends by turning these insights back on the task of regulation itself, and the strategies (and frustrations) of making regulation work in a financial world that is at once increasingly sophisticated yet deeply human and incurably flawed.


Management: It's not what you think

Management: It's not what you think
Author: Henry Mintzberg
Publisher: Pearson UK
Total Pages: 205
Release: 2013-07-09
Genre: Business & Economics
ISBN: 0273748815

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"Henry Mintzberg's views are a breath of fresh air which can only encourage the good guys." The Observer Tied up in knots by KPIs? Confused by core competencies? Management doesn’t have to be this way. In fact, it shouldn’t be! One of today’ best-known and most controversial thinkers on management has joined forces with other leading business figures to provide a thought-provoking mix of writing on management. The cutting edge views depicted in this book are controversially the opposite of what is often held up as the truth in management. Management? Its Not What you Think! brings readers an unusual mix of perspectives to help stimulate more creative management thinking and more enjoyable, challenging and more productive ways to lead their teams. This is a book readers can dip into, a book they can savour, a book that won’t fail to get them reflecting on what management really is…


Handbook of Income Distribution

Handbook of Income Distribution
Author: Anthony B. Atkinson
Publisher: Elsevier
Total Pages: 2366
Release: 2014-12-30
Genre: Social Science
ISBN: 0444594760

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What new theories, evidence, explanations, and policies have shaped our studies of income distribution in the 21st century? Editors Tony Atkinson and Francois Bourguignon assemble the expertise of leading authorities in this survey of substantive issues. In two volumes they address subjects that were not covered in Volume 1 (2000), such as education, health and experimental economics; and subjects that were covered but where there have been substantial new developments, such as the historical study of income inequality and globalization. Some chapters discuss future growth areas, such as inheritance, the links between inequality and macro-economics and finance, and the distributional implications of climate change. They also update empirical advances and major changes in the policy environment. The volumes define and organize key areas of income distribution studies Contributors focus on identifying newly developing questions and opportunities for future research The authoritative articles emphasize the ways that income mobility and inequality studies have recently gained greater political significance


The Power of Noticing

The Power of Noticing
Author: Max Bazerman
Publisher: Simon and Schuster
Total Pages: 240
Release: 2014-08-05
Genre: Business & Economics
ISBN: 1476700311

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A “must-read” (Booklist) from Harvard Business School Professor and Codirector of the Harvard Kennedy School’s Center for Public Leadership: A guide to making better decisions, noticing important information in the world around you, and improving leadership skills. Imagine your advantage in negotiations, decision-making, and leadership if you could teach yourself to see and evaluate information that others overlook. The Power of Noticing provides the blueprint for accomplishing precisely that. Max Bazerman, an expert in the field of applied behavioral psychology, draws on three decades of research and his experience instructing Harvard Business School MBAs and corporate executives to teach you how to notice and act on information that may not be immediately obvious. Drawing on a wealth of real-world examples and using many of the same case studies and thought experiments designed in his executive MBA classes, Bazerman challenges you to explore your cognitive blind spots, identify any salient details you are programmed to miss, and then take steps to ensure it won’t happen again. His book provides a step-by-step guide to breaking bad habits and spotting the hidden details that will change your decision-making and leadership skills for the better, teaching you to pay attention to what didn’t happen, acknowledge self-interest, invent the third choice, and realize that what you see is not all there is. While many bestselling business books have explained how susceptible to manipulation our irrational cognitive blind spots make us, Bazerman helps you avoid the habits that lead to poor decisions and ineffective leadership in the first place. With The Power of Noticing at your side, you can learn how to notice what others miss, make wiser decisions, and lead more successfully.


MBA in Finance - City of London College of Economics - 10 months - 100% online / self-paced

MBA in Finance - City of London College of Economics - 10 months - 100% online / self-paced
Author: City of London College of Economics
Publisher: City of London College of Economics
Total Pages: 7766
Release:
Genre: Education
ISBN:

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Overview You will be taught all skills and knowledge you need to become a finance manager respectfully investment analyst/portfolio manager. Content - Financial Management - Investment Analysis and Portfolio Management - Management Accounting - Islamic Banking and Finance - Investment Risk Management - Investment Banking and Opportunities in China - International Finance and Accounting - Institutional Banking for Emerging Markets - Corporate Finance - Banking Duration 10 months Assessment The assessment will take place on the basis of one assignment at the end of the course. Tell us when you feel ready to take the exam and we’ll send you the assignment questions. Study material The study material will be provided in separate files by email / download link.


Thoughts Worth Thinking

Thoughts Worth Thinking
Author: Kris Doulos
Publisher: AuthorHouse
Total Pages: 340
Release: 2015-09-24
Genre: Body, Mind & Spirit
ISBN: 1504932234

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The book consists of 106 topics. Some will inspire, some will inform, and some will make the reader angry. The information is based upon the information in the Bible. Longstanding traditions are placed alongside the words of Jesus so the reader can decide which he thinks is true. The intent is to be accurate without being judgmental. Do you know the name Gabriel told Mary to call her baby was not Jesus? Do you know Armageddon has already happened? Do you know there is no Greek word that can be correctly translated using the English word hell? Do you know Paul contradicted Jesus? These and other questions related to erroneous traditional beliefs are answered by the text of the Bible.