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dc.rights.licenseRestricted to current Rensselaer faculty, staff and students. Access inquiries may be directed to the Rensselaer Libraries.
dc.contributorFrancis, Bill
dc.contributorWu, Qiang
dc.contributorClark, Brian J.
dc.contributorHasan, Iftekhar
dc.contributor.authorSiraj, Ibrhaim
dc.date.accessioned2021-11-03T09:25:20Z
dc.date.available2021-11-03T09:25:20Z
dc.date.created2021-07-08T15:42:11Z
dc.date.issued2018-08
dc.identifier.urihttps://hdl.handle.net/20.500.13015/2688
dc.descriptionAugust 2018
dc.descriptionSchool of Management
dc.description.abstractIn chapter 2, I closely examine the influence of credit market deregulation on the earnings management behavior of the non-financial institutions. I argue that increase in product market competition due to a greater supply of credit resulted from bank deregulation might influence the firms to manipulate earnings to manage the market perception of their vulnerabilities to any disruption. Using staggered timing of interstate bank deregulation across different states in the U.S. as an identification strategy, I find that increased bank competition significantly influences corporate earnings quality. The results indicate that following financial deregulation, firms tend to intensify the use of income increasing real earnings management, through cutting down discretionary expenditure, and decrease income increasing discretionary accruals management. The findings become predominant when firms experience lower sales growth in the post-deregulation period compared to the period of pre-deregulation and have a small market share, operate with low market pricing power in industries with low barriers to entry, and face high financial constraints in external finance dependent industries. Findings from additional analyses indicate that out-of-state banks’ incentives of geographic diversification and proximity to deregulated states significantly influence the corporate incentives of real earnings management. The findings are robust to different empirical settings and sample periods.
dc.description.abstractIn this dissertation consisting of three chapters, I explore three issues in financial accounting and auditing by focusing on the expertise of external auditors, external market pressure, and internal management feature. The first chapter examines how auditors’ diversified experience gained from serving clients from different industries might affect audit pricing and audit quality of the conglomerate clients. The second chapter explores the impact of the disruption in credit market on the managerial incentives of earnings management of the non-financial institutions. The third chapter examines how managerial ability influences the market pricing of earnings.
dc.description.abstractIn chapter 1, I examine the audit pricing and audit quality of the conglomerate clients with respect to the expertise of the auditors. While existing literature recognizes the role of auditors’ industry specialization in influencing audit fees and audit quality, I argue that the diversified experience of auditors gained from serving firms from different industries should also matter, particularly for the multi-segment firms. I find that the auditors with diversified experience, a measure capturing both the extent at which an auditor is experienced in different industries and the usefulness of that experience to a conglomerate client, are highly likely to charge significant fee premium. Additionally, diversified firms and the firms reorganized from single-segment to multi-segment experience an increase in fees when they switch to a better experienced auditor. Further evidence confirms that it is the pricing of diversified experience, not the pricing of more auditing effort, that results in a fee premium. In examining of audit quality, I find that conglomerates audited by more diversified auditors are likely to have a lower level of discretionary accruals, and a lower likelihood of restatements. The results are robust to the use of audit fees of conglomerates comparing with the comparable portfolio of audits fess of standalone firms, and to the concern of endogenous process of auditor selection.
dc.description.abstractIn chapter 3, I examine how managerial ability, a measure of managers’ efficiency of generating revenues, affects the market pricing of earnings. I find a strong positive relationship between managerial ability and the value relevance of earnings. Firms that are consistent in showing superior management capacity from one period to the next tend to experience the strongest value relevance. Several robustness tests confirm that the findings are not driven by unaccounted firm characteristics nor earnings quality. For a better identification, I examine CEO turnover and find that hiring outside CEOs with better managerial abilities compared to the replaced CEOs increases value relevance. Overall, the findings suggest that better managers make earnings significantly more relevant in the market valuation of equity.
dc.language.isoENG
dc.publisherRensselaer Polytechnic Institute, Troy, NY
dc.relation.ispartofRensselaer Theses and Dissertations Online Collection
dc.subjectManagement
dc.titleThree essays in financial accounting and auditing
dc.typeElectronic thesis
dc.typeThesis
dc.digitool.pid180561
dc.digitool.pid180563
dc.digitool.pid180562
dc.rights.holderThis electronic version is a licensed copy owned by Rensselaer Polytechnic Institute, Troy, NY. Copyright of original work retained by author.
dc.description.degreePhD
dc.relation.departmentLally School of Management


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