...WHY SHOULD WE BELIEVE THE PAT STORY? Watts and Zimmerman have been very successful in their dissemination of the PAT story. As Whittington notes, they are "two of the most widely discussed contributors to the accounting literature of the past decade" (1989, p. 327). They are also the joint founder-editors of The Journal of Accounting and Economics, a journal devoted to positive accounting research, which has achieved an international reputation. So their story, while admittedly controversial, has achieved credibility among a significant number of accounting researchers. But what accounts for that credibility? According to Watts and Zimmerman's (1986) view of science, a theory's credibility will ultimately be a function of explanatory power and predictive capability: "Ultimately the users, who assess alternative explanations' intuitive appeal and bear the costs and benefits of theories' predictions, will determine the success of the theory outlined in this book" (p. 355). And a theory, in their conception, consists of: the assumptions, including the definitions of variables and the logic that relates them, and the set of substantive hypotheses" (1986, p. 9). And since the hypotheses of a theory bear the brunt of empirical testing, the primary concern of the empirical testing of PAT is whether or not the hypotheses can predict accounting practice. Prediction of accounting practice means that the theory predicts unobserved accounting phenomena" (1986, p. 2). More concretely, they...
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...instructional novella written by James K. Loebbecke, tells the story of Jack Butler, a man from the San Francisco Bay area, who goes to college, majors in accounting, and goes to work for a large accounting firm referred to as “The Firm.” The story is loosely based upon the real world experiences of the author, and is written to give students a look into the world of public accounting that goes beyond a textbook. The Auditor not only gives students a chance to follow Jack Butler’s journey up the company ladder at The Firm, but also reiterates the relative importance of conventional lessons learned in school. The story begins with a nerve filled morning for Jack Butler. He is one of three managers who are being considered for partnership, and today is “the big day.” The fact that Jack, an experienced auditor at this time, is filled with anxiety on this day shows how special it is to be considered as a candidate for partnership in a firm. It also depicts the level of competition a student can expect to experience at a firm in the future. In the story, Jack states that the other two managers up for the partnership are very close friends, and he worries that their relationships might be affected if he gets the position. Jack receives the promotion, along with one of the other two managers, Barbara Gillespsie. Jack is excited for the promotion, but quickly realizes the additional responsibility that comes with being a partner in the firm. This first experience for Jack shows students that...
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...alternative perspective, arguing that: * Branding is a strategic point of view, not a select set of activities. * Branding is central to creating customer value, not just images. * Branding is a key tool for creating and maintaining competitive advantage. * Brands are cultures that circulate in society as conventional stories. * Effective brand strategies must address the four distinct components of brand value. * Brand strategies must be “engineered” into the marketing mix. This note develops a set of concepts and frameworks to guide the design of brand strategies. From Value Proposition to the Brand Marketing strategies begin with the value proposition: the various types and amounts of value that the firm wants customers to receive from the market offering. The value proposition is value as perceived by the firm, value that the firm seeks to “build” into the product.1 In marketing, the value proposition is sometimes referred to as the positioning statement.2 Common wisdom in business often assumes that product value as measured by the firm and product value as experienced by the customer are identical. If the firm builds a better product, customers will experience it as such. Marketing makes a crucial break with this assumption. Marketing emphasizes that customer value is perceptual, never objective fact. Value is shaped by the subjective understandings of customers, which often have...
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...September 23, 2012 Audit Firms’ Work Deemed Deficient September 17, 2012 Siyuan Zhu I. Summary of the Story with Key points clearly identified Recently, regulators discover that big audit firms’ work has a substantial amount of serious deficiencies. Although the PCAOB conducts inspections of the big firms concentrate on problems at highest risk every year, it states that the report may not be truly reveal how frequently a firm’s overall audit work is deficient. Thus more work need to be done to improve the quality of audit services. II. My Reaction to the story with rationale and possible solutions From my perspective, the primary target of the audit today is the verification of financial statements. The audit is an important part of the capital market framework as it not only reduces the cost of information exchange between managers and shareholders but also provides a signaling mechanism to the markets that the information which management is providing is reliable. At the same time, the audit will lose its value when independence which gives credibility to the financial statements is undermined, which is the exact situation in the journal. To promote the independence of external auditors as well as to ensure the quality of audit services, it is significant and profound to establish an audit committee separate from management inside a company. Specifically, the audit committee is responsible for monitoring, overseeing, and evaluating the duties and responsibilities...
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...Summary of The Auditor The Auditor by James K. Loebbecke tells a story about the life and career of an auditor named Jack Butler. The book shows Jack’s career from his education all the way to his promotion to partner. Loebbecke designed this story about Jack as a teaching tool to give students an understanding about the life of an auditor. The story begins with Jack’s promotion to partner and how it was bittersweet for him. Jack is excited for the promotion, but is also nervous about the extra responsibility partners have and the stress it can bring on family life. He is also upset because his friend Don was considered for the promotion too, but was turned down. In these chapters, Loebbecke shows the good and the bad that comes with partnership. There are financial rewards and prestige, but also potential strain on friendships and family. For the rest of the book, the author unfolds the events that take Jack closer to his partnership with The Firm. After Jacks promotion, the story goes back in time and shows all the events that led to the promotion. It begins with Jack’s education and then to recruitment at The Firm. During Jack’s college years he gets advice from his father and Wally Garner, a faculty member. At that time Jack takes an interest in accounting and Wally takes Jack underneath his wing and gives Jack advice in planning a career in accounting. Wally gives Jack great advice on the differences between MBA versus MPrA and the differences between the...
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...vital tool that moves messages and stories from place to place and from people to people. In the next 5-10 years, my goal is to become a skilled multimedia and multiplatform communications professional who is up to date with the latest communication technologies. I want to be adept in my ability to understand and differentiate audiences and the messaging that best suits them. I hope to accomplish this goal by working in settings where I can learn from peers, colleagues and mentors as well as have the freedom to create and explore new strategies that use both creativity and insight to relay stories and messages. 2. My experience writing informational and promotional copy includes my time writing for the City of Arlington, Texas. For the city, I have written advances and promotional article about performances, sports competitions and entertainment guides. The latest promotional piece I wrote informed locals and visitors about the Special Olympics Texas Summer Games that took place in Arlington May 26-29. When it comes to informational and promotional writing, it is important to relay the who, what, when,...
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...Governance, Accounting, and Auditing, Post-Enron Group 1: Student Name__Seven Autrey_____________________________________ Student Name__Duc Nguyen_____________________________________ Telling the Enron Story Name five ethical problems and the existing conditions that caused the Enron fiasco. Explain each. 1. Fiduciary Failure – the board of directors failed to safeguard the companies from many inappropriate practices. 2. High Risk Accounting – Enron allowed high risk accounting in that the partnerships with Chewco and LJM1 and LJM2 did not conform with accounting rules 3. Enron had extensive undisclosed off-the-books activity. There were billions of dollars in off-the-book assets and liabilities. 4. Excessive Compensation – There was a cash drain caused by the 2000 annual bonus and performance unit plan. 5. Lack of Independence – There were financial ties between Enron and board members. Arthur Anderson provided internal auditing services as well as consulting services. Accounting 1370 Accounting Ethics Session 6 Governance, Accounting, and Auditing, Post-Enron Group 1: Student Name__Carol Cates_____________________________________ Student Name__Brenda Bohm____________________________________ Telling the Enron Story Name five ethical problems and the existing conditions that caused the Enron fiasco. Explain each. 1. At Enron, a lack of integrity was built into the foundation of the company from the top to the bottom...
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...16 Major Firms May Have Received Early Data From Thomson Reuters September 5, 2:25 PM ET |ByMatt Taibbi Read more: http://www.rollingstone.com/politics/blogs/taibblog#ixzz2fI9gEBD3 Follow us: @rollingstone on Twitter | RollingStone on Facebook Readers may recall an ugly story that broke earlier this summer, when New York State Attorney General Eric Schneiderman rebuked the news/business information firm Thomson Reuters for selling access to key economic survey data two seconds early to high-frequency algorithmic traders. The story strongly suggested that some Thomson Reuters customers were using their two-second head start (an eternity in the modern world of computerized trading) to front-run the markets. "The early release of market-moving survey data undermines fair play in the markets," Schneiderman said, back in the second week of July. Thomson Reuters suspended the practice of selling two-second head starts after Schneiderman insisted upon a change. Still, the firm defiantly refused to declare the change permanent and insisted that it had the right to "legally distribute non-governmental data" to "fee-paying subscribers." It turns out that there's more to the story. Back in June, journalist Simone Foxman at the global economic site Quartz reported that in addition to the two-second head start some Thomson Reuters customers were getting on the release of the University of Michigan Survey of Consumers, other customers may have been getting their data even earlier...
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...The Auditor Book Summary The Auditor, an instructional novella written by James K. Loebbecke, tells a story about a man named Jack Butler, who is from San Francisco Bay area, goes to college, majors in accounting, and goes to work for a large accounting firm referred to as “The Firm.” The auditor is based on real world experiences of the author that lets students follow Jack Butler’s journey up the company’s ladders at The Firm, which gives students a better understand of the auditing profession. The story begins with Jack Bulter getting a promotion to become a partner in the firm in which he has been working for over 10 years. We are later introduced to his colleagues Dan Pamell and Barbara Gillespie who were in the same situation as Jack to whether they were going to be chosen as a future partner. In the end Barbara Gillespie gets the promotional, worrying Jack that his relationship with Dan Pamell be affected with not obtaining the position. At the end of the book Don, Jack’s friend, was offered to get a partnership position in the Oakland branch but he declined it. As the story progresses, we follow Jack through the struggles and achievements that lead him into becoming a partner as well as maintaining a life outside the office. As the story progresses, Jack Bulter explained how he was going to purse a law degree to become a lawyer like his father who we learn is a partner in Messner, Smith and Bolther in San Francisco. After taking some accounting classes and making...
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...This story is one that must be told which by that this is a story of Suze Orman a woman who is the top personal finance experts in the United States. Orman was born in Chicago, Illinois, on June 5, 1951. The youngest of three children, she struggled to overcome a speech impediment her family struggle with financial challenges. Orman went to college to be a social worker ,but left in 1973 before completing her degree which is really brave, went on a road trip just around American. Orman lost all her money to a representative broker at Merrill Lynch, however Orman decided to become a broker and applied to the same Merrill Lynch office where she had lost her earlier investment Merrill Lynch office hired her to fill their women's quota,....
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...INTRODUCTION HOW TO REALLY GET A JOB IN BANKING: The single most important thing you can do is to talk to as many people as you can. Talk to bankers and second years at SOM, learn about their experiences and views, and above all think for yourself. Getting a job in investment banking should involve two efforts on your part: (1) Learning your own needs - what is it you want in a job? (2) Learning what an investment bank is and does - does this type of job meets your needs? As a final warning, there is an allure to investment banking, namely that it is a high powered, fast-paced, exciting, dynamic career that can make you rich. This can be true, but it is also just a job - particularly as a first-year associate when it may not be as glamorous as you thought it would be. QUALITIES THAT INVESTMENT BANKS LOOK FOR It is important to see yourself as a portfolio of skills and qualities conducting an internet job search as well as any other. There are a number of skills and qualities that banks look for, and a successful candidate needs to put together several, but certainly not all of them. Additionally, it is probably a good idea to have some balance in your portfolio. Some qualities that banks look for on a resume or in the interview and some suggested ways to demonstrate them (these are just a few, and some banks will emphasize some more than others): Show a strong interest in Finance: Be able to convey to an interviewer/contact that you understand what...
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...Analysis of the text “W.S.” The text under analysis is an extract from a short story “W.S.” by Leslie Poles Hartley, a well-known British novelist and short story writer best-known for his novels which include “Eustace and Hilda” trilogy (1947) and “The Go-Between” (1953). The story “W.S.” comes from “The complete short stories” of L. P. Hartley published posthumously in 1973. The story “W.S.” is about a novelist Walter Streeter who one day gets a postcard from Forfar signed W.S. He doesn’t pay any attention to this as he is used to get letters and he tears it. Later he gets 2 more postcards from Berwick-on-Tweed and York Minster. Getting them Walter Streeter becomes interested in the author. He notices that the author has the same initials as he has and that makes him think about him more. His friend supposes W.S. to be a woman who has taken a fancy to Walter Streeter. When he gets the 4th postcard he becomes afraid as it was from Coventry and W.S. writes about his coming nearer. That makes Walter Streeter go to the police but they think it to be a hoax and advise him to come if he get some postcards more. The main character of the story is Walter Streeter. His character is round and dynamic. He is not stable throughout the extract. In the beginning of the story his attitude to the postcards is quite indifferent, but later when the postcards acquire more perilous nature, Walter Streeter feels less confidence and he is even a bit threatened. The author uses indirect method...
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...Analysis of the text “W.S.” The text under analysis is an extract from a short story “W.S.” by Leslie Poles Hartley, a well-known British novelist and short story writer best-known for his novels which include “Eustace and Hilda” trilogy (1947) and “The Go-Between” (1953). The story “W.S.” comes from “The complete short stories” of L. P. Hartley published posthumously in 1973. The story “W.S.” is about a novelist Walter Streeter who one day gets a postcard from Forfar signed W.S. He doesn’t pay any attention to this as he is used to get letters and he tears it. Later he gets 2 more postcards from Berwick-on-Tweed and York Minster. Getting them Walter Streeter becomes interested in the author. He notices that the author has the same initials as he has and that makes him think about him more. His friend supposes W.S. to be a woman who has taken a fancy to Walter Streeter. When he gets the 4th postcard he becomes afraid as it was from Coventry and W.S. writes about his coming nearer. That makes Walter Streeter go to the police but they think it to be a hoax and advise him to come if he get some postcards more. The main character of the story is Walter Streeter. His character is round and dynamic. He is not stable throughout the extract. In the beginning of the story his attitude to the postcards is quite indifferent, but later when the postcards acquire more perilous nature, Walter Streeter feels less confidence and he is even a bit threatened. The author uses indirect method...
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...“A market structure is a means of characterising a market by reference to the level and intensity of competition that prevails between firms in it. (Chris Mulhearn et al 2001: 98) There are three major market structures: perfect competition, monopoly and oligopoly. Perfect competition is the ideal type of market structure which allows a large number of small firms producing homogeneous product to maximise the profit. Monopoly is a market structure in which there is a sole firm of a good or service that has no close substitutes and for which there are barriers to entry into the industry. Oligopoly can be defined as which a market is dominated by a small number of firms and each firm can affect the market price. One of the examples is airlines companies. Unlike other market structures, firms act interpedently in an oligopolistic market. For instance, each time a firm makes a price or output decision to the market, others competitors are likely to react to the changes either legally or illegally in the industry. Hence, oligopoly can be divided into two different types, non-collusive oligopoly and collusive oligopoly. Non-collusive oligopoly means where firms are working independently and competing properly. In contrast, collusive oligopoly occurs when firms start working together privately and illegally to control the market. Cartel and price leadership are the two most common examples of collusive oligopolies. Cartel is a clear agreement between a group of companies which...
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...Plot Summary The Firm is the story of Mitch McDeere's employment with the Bendini, Lambert, and Locke law firm. Mitch is a young, ambitious man who recently graduated from Harvard law school. Having excelled in his law program and possessing a strong character, he is recruited by the exclusive firm. The firm promises him a lifestyle that he and his wife, Abby, had never dreamed was possible. The firm provides them with a BMW, low rate mortgage, sign-on bonus, a cash bonus for passing the bar exam, study aid for the bar exam and continuing education following it, the use of a corporate jet and international accommodations, and it repays all of Mitch's outstanding student loans. All of these "perks" are in addition to a great salary and guaranteed partnership in ten to fifteen years. Mitch and Abby are lured by the instant lifestyle upgrade. They are quickly disillusioned by what comes along with the benefits. Employment with the firm is meant to be permanent, and some of the previous partners have died under mysterious circumstances at fairly young ages. Mitch can't help but wonder what is in store for him. As the story unfolds, Mitch learns that he is being followed and all of his conversations are recorded. The surveillance extends beyond his office and into his car and home. Mitch is approached by an FBI agent, Wayne Tarrance, who would like Mitch to cooperate with FBI officials to infiltrate the Bendini law firm. He informs Mitch that the law firm has ties with the Moroltos...
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