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Textbook To Reality: Using Corporate Earnings Reports As An Effective Teaching Tool For A Business Capstone Course
Get PDFBusiness curriculums in many universities now include a senior Capstone course that integrates topics or materials from all business areas. This capstone course is designed to teach the skills of strategic thinking and analysis rather than mere facts or concepts. With that goal in mind, the ideal course is structured in such a way so that students get an opportunity to apply their knowledge from all previous courses taken before the capstone course. Instructors around the country use a variety of teaching tools in a capstone course that include simulation games, group projects, individual projects or paper, and/or case studies. One of the effective teaching tools in a capstone course is quarterly or annual earnings reports submitted to the SEC (Securities and Exchange Commission) by all publicly traded companies. Although earnings reports are used by some instructors as a reference or as part of a case study, it has not been widely used in a way that is demonstrated in this paper. The earnings reports have a rich array of information that can be used to teach business concepts from every business discipline – accounting, economics, finance, human resource management, international business, or marketing. Going through a detailed earnings report exposes students to a real world scenario, teaches them how to read between the lines, and enhances their critical and strategic thinking process. It is also a great way to brush up their knowledge from all previous courses which helps them to retain the knowledge and to do well on the business exit exam. This paper demonstrates an approach or method where students use business concepts, theories, financial ratios, and formulas using actual company data from an annual Earnings Report of a company submitted to the SEC. The idea presented here is not mutually exclusive of other tools used in a capstone course but rather contributes to learning if can be used simultaneously
Cross-Functional Maintenance And Logistics Business Process Integration: Lessons From A Large Oil And Gas Company
Get PDFThe purpose of this research focused on integration and alignment of maintenance and logistics functions in a large ERP system in an oil and gas company to demonstrate how cross-functional integration can improve operations. A design science approach has been used based on a case study of a large oil and gas company. The study found that limited cross-functional integration involving the logistics function exists. Proposed process redesign involves activities include improved storage and picking strategies, information exchange, notification of fully received components at the warehouse and an improved shipping strategy. These improvement strategies have been tested through random questionnaires and most respondents support the improvements. This study shows that business process improvement facilitated by cross-functional process integration should realise substantial financial benefits. We have shown that warehouse operation strategies do have an impact on the work order performance through the on-time delivery of its components. In addition, regular communication and utilisation of the available information can also improve the scheduling of work order execution. These benefits are not limited to the company in question but the results show that if companies in general give more attention to cross-functional integration, substantial benefits are possible. The focus of this study is uncommon as it is the integration of logistics and maintenance functions within an organisation. We show substantial process improvements are possible. It therefore provides another opportunity for business process improvement experts to better align various systems and processes
The Effect Of Abnormal Pay Dispersion On Earnings Management
Get PDFThis study examines the effect of the abnormal pay dispersion on earnings management. Prior studies find that pay dispersion among top executives affect firm performance and executive turnover. We expect that abnormal pay dispersion among top executives affects financial reporting practice as well as firm performance and turnover and provide evidence of positive association between abnormal pay dispersion and earnings management. This result suggests that executives are more likely to be engaged in earnings management to increase their compensation when they feel unfairness from the relative level of compensation. This finding helps financial statement users interpret firm performance and anticipate future outcomes by implying that additional managerial incentives for financial reporting are derived from internal pay dispersion. Our finding that abnormal pay dispersion leads to higher agency costs should also be of interest to shareholders
Content Analysis Of Board Reports On Corporate Governance, Internal Controls And Risk Management: Evidence From France
Get PDFThe French legislature has mandated in 2008 that the board chairperson reports on governance, internal controls, and risk management approach with the objective to enhance corporate disclosures to investors. This study examines the content of board chair reports to assess their relevance and compliance with mandated disclosure requirements. Based on a sample of 109 french publicly listed comapnies in 2009, Our results show that, with the exception of banks subject to a more stringent regulatory standard, the mandatory nature of the legislation did not translate in extended disclosures about internal controls and risk management practices. We further observe significant variations among the different indices of disclosure particularly with regards internal accounting and financial control. The multivaraite results validate the influence of the chosen internal control framework as well as firm characteristics on the content of the information disclosed about governance, internal control, and risk management practices
Accounting Characteristics Of Corporations By Bonds Issuing Methods: Focused On Public Corporations In South Korea
Get PDFPublic corporations of Korea may opt for either online auction or offline issue of bonds, the latter being a more traditional method using investment banks. These two methods have distinct advantages and disadvantages. Corporations that adopt the online issue method tend to have lower earnings management, use more conservative accounting, and enjoy superior scores on the government's assessment of management performance. This means that corporations that choose online, the more transparent issuance method, are more transparent in their accounting practices
The Influence Of Cultural Thinking Style On Consumer Cognitive Complexity Underlying Wine Purchase Decisions
Get PDFDrawing on the cultural priming paradigm, the purpose of this research is to investigate how cultural differences in cognition affect consumers’ hierarchical cognitive structures underlying wine purchase decision-making process. Means-end chain analyses of French and Korean wine consumers were conducted both at a chronic cultural difference level and at an experimental level in which either analytic or holistic thinking tendency is primed. The results show that the holistic thinking-primed consumers consider broader connections between the key perceptual elements of the means-end chain, resulting in more complex structures of interconnected motives than the analytic thinking-primed consumers. This study provides support for the dynamics of culture-specific thinking styles as the driver of cultural variations in wine consumers’ cognitive complexity in the decision-making process. Important practical implications for international food marketing managers stem from our cross-cultural findings
Theory And Practice In Capital Budgeting: Evidence From Kuwait
Get PDFCapital budgeting is an important tool in corporate finance, which is supported with numerous methods. Previous researches in this field shows that simple methods of capital budgeting are preferred over complex methods. With an objective to adopt relevant modification in the academic sector this paper evaluates the preferred capital budgeting practices in Kuwait, one of the strongest economy in the world, through a structured questionnaire distributed among 100 firms. The study also reveals the significance of demographic factors on real life capital budgeting practices as well as it probes in to the significance of the subjects; introductory finance, financial management and risk management. The results of the study are consistent with the previous researches in this field, that majority of the respondents use the NPV. Furthermore, age, educational qualification, managerial levels, years of experience, company size, among others all have significant effects on most capital budgeting methods
The Entry Of International Banks In China
Get PDFWith the remarkable degree of openness of China’s economy, an increasing number of foreign banks are rushing into this country. Two main theories prevail in current studies on the motivations of foreign banks to enter a new country, namely, customer-driven or market opportunity driven. Using the event study methodology, this paper analyses the value effect on foreign banks of the “entering the Chinese market” event. The results show that compared to customer-driven factors, the new opportunities of the Chinese market better explain this value effect. Our results provide a reference for foreign banks on operating strategies in China and enable a better understanding of the choice of destination and motivations for foreign banks to enter China.
Earnings Management by Financing Purposes
Get PDFAn objective of this study is to investigate the difference of earnings management before financing by capital financing purposes. Two main methods of financing directly in capital markets are seasoned equity offerings (hereafter ‘SEO’) and issuing bonds (hereafter ‘BOND’). The purposes of financing are largely classified into working capital and investment capital. This study investigates whether the firms that need to finance for working capital are more motivated for earnings management than the firms that need to finance for investment capital. The results show that discretionary accruals before financing for working capital are greater than financing for investment capital for both SEO and BOND.
Do Bank Loans Curb Corporate Moral Hazard?
Get PDFIn this paper, we discuss optimal contract drafting between a lender with deficient monitoring capabilities and an agency-ridden borrower with insufficient budget to finance an investable project. The theoretical implications are as follows: First, the first best solution (FBS) is achievable under no hidden action. However, the borrower’s action is hardly observable in practice. Second, with unobservable managerial decisions the borrower exerts sub-optimal effort (moral hazard), and the probability of default increases. Lastly, with a penalizing discretion entitled to the bank on a long-term contract, the financial intermediary will be able to control the firm’s managerial action effectively such that the solution is equivalent to the FBS attained under no hidden action. Empirical implications are followed