Distinguish between social desirability bias and acquiescence bias.
> What are abnormal returns (AR) and cumulative abnormal returns (CARs)? What do they have to do with research in accounting? What do they have to do with accounting standards?
> What are some limitations of capital market research?
> In what ways do you think information useful for investors (in assessing future cash flows) differs from that useful for creditors (in assessing default risk)?
> If investors are well diversified (e.g., own several hundred stocks), will they have a greater or lesser need for accounting information? What does this say about diversification?
> What is the advantage of being well diversified? Is there a downside? Why or why not?
> Why is the efficient-market hypothesis being challenged?
> Samuelson would use a property rights definition of assets (discussed in the chapter). Do you think that SFAS No. 2 requiring immediate expensing of research and development costs is an example of Samuelson’s property rights approach? Discuss.
> Is it fair to categorize ARS 1 and ARS 3 as failures?
> Conservatism is discussed in paragraphs 91–97 of SFAC No. 2. Why is its role in SFAC No. 2 rather ambiguous? Why is conservatism absent from SFAC No. 8?
> Why do managers of Berkshire Hathaway have an incentive to send cash to Omaha?
> Comment on the following. “Maximizing residual income is the same as maximizing earnings. Managers should be rewarded for maximizing either one.”
> How is accounting data useful to investors? To creditors?
> Very carefully explain why conflicts can exist between prediction of cash flows and accountability. Can these conflicts be resolved?
> SFAC No. 6 is largely a repetition of SFAC No. 3. Discuss two possible reasons why this repetition occurred.
> What is comprehensive income?
> Do you think that the so-called equity theories of accounting are really theories in the scientific sense? If so, how would you classify them?
> Should constituents have input into the FASB decisions, or should the FASB neutrally and independently set standards?
> “The FASB’s standard-setting procedure is a fairly narrow, cut-and-dried approach to developing accounting standards.” Evaluate this statement.
> What has been the SEC’s role in the evolution of the rule-making process? How has that role changed since the passage of SOX?
> Discuss the significance of the SEC’s ASR 150.
> Do you think that the nonbinding status of the FASB’s statements of financial accounting concepts (like that of APB Statement 4) is a good idea or not?
> What are the two principal underlying assumptions of agency theory (positive accounting research)? Critique their role in constructing a theory of accounting.
> For a discipline to become a science, the results of experiments and research must be exact. Do you agree with this statement? Discuss.
> If there has been a paradigm shift (scientific revolution) in accounting research, but not in accounting practice, what may this signifiy?
> Why does the decision-model orientation to research accord more closely with the standard-setting function than any of the other research directions?
> In what ways does the FASB differ most markedly from its two predecessors?
> What is the major difference in orientation between positive accounting theory and more overtly normative theories, such as the valuation approaches discussed in Chapter 1?
> How has Sarbanes-Oxley of 2002 affected FASB’s jurisdiction and independence?
> Can any overall trend be detected in FASB pronouncements? Explain and cite examples to substantiate your opinion.
> Do you think that the work of a policy-making organization such as the FASB or the SEC is normative (value-judgment oriented) or positive (oriented toward value-free rules)? Discuss.
> What are some of the pitfalls of empirical research?
> Why must objectives be at the topmost level of a conceptual framework of accounting?
> Several occupations within two of the aforementioned disciplines are listed here. Which do you think come closest to being scientific? Accounting researcher Chief accountant for an industrial firm Medical researcher Doctor (general practitioner)
> Of the four disciplines in the following list, which do you think qualify as sciences and which do not? State your reasons very carefully. Law Medicine Cosmetology Accountancy
> Several years ago an author stated that corporate income could be scientifically ascertained, but any type of adjustment for inflation would be pure folly because measurements would tend to become very subjective. Do you agree with the author’s appraisal
> Discuss how the concept of conservatism may be changing as viewed by Watts.
> What similarities are there between materiality and disclosure?
> Why do companies, even those with “bad news,” have an incentive to disclose financial reporting information?
> At present time, the U.S. federal income tax code allows corporations to deduct interest expense but not cash dividends paid to stockholders. Does the tax code tie in with any of the equity theories?
> Under financial statement insurance why would the relation between the firm and its auditor and investors bear a slight resemblance to the relationship between Saddam Hussein and the weapons inspectors from the United Nations in 2002 and 2003?
> Stewardship is absent from SFAC No. 8; why?
> What is the relationship between the economic consequences of accounting standards and the quality of neutrality presented in SFAC No. 8?
> Would a regular quarterly announcement of earnings-per-share which is “good” be an example of signaling? What about early adoption of a new accounting standard that would reduce income?
> If Watts and Zimmerman are correct that managers of very large firms oppose accounting standards that would raise their income and favor those that would lower it, what policy implications would this have for a standard-setting organization such as the F
> Is capital maintenance oriented toward proprietary theory or entity theory?
> Distinguish among the terms realized, realizable, and realization.
> What does the term “social reality” mean and why are accounting and accounting theory important examples of it?
> In recent years, in-home personal interviews have grown more costly and more difficult to complete. Suppose, however, you have a project in which you need to talk with people in their homes. What might you do to hold down costs and increase the response
> Assume you are planning to interview shoppers in a shopping mall about their views on increased food prices and what the federal government should do about them. In what different ways might you try to motivate shoppers to cooperate in your survey?
> How do environmental factors affect response rates in personal interviews? How can we overcome these environmental problems?
> Distinguish among response error, interviewer error, and nonresponse error.
> Describe how you would operationalize variables for experimental testing in the following research question: What are the performance differences between 10 microcomputers connected in a local-area network (LAN) and one minicomputer with 10 terminals?
> One of the hardest aspects of a merger is making the IT systems of the merging companies talk with each other. That problem grows in magnitude when you are talking about merging airlines, Continental and United Airlines. While the ticketing conversion wo
> What type of experimental design would you recommend in each of the following cases? Suggest in some detail how you would design each study:
> You are asked to develop an experiment for a study of the effect that compensation has on the response rates secured from personal interview participants. This study will involve 300 people who will be assigned to one of the following conditions: (1) No
> A pharmaceuticals manufacturer is testing a drug developed to treat cancer. During the final stages of development, the drug’s effectiveness is being tested on individuals for different (1) dosage conditions and (2) age groups. One of the problems is p
> Your class team in research methods has completed a field project for a financial institution on branch location effectiveness. What questions about audience analysis should you answer as you plan your presentation?
> Much Internet advertising is priced based on click-through activity. A prospect is shown an ad on a host website based on search words he or she might have entered in a search engine such as Google or Bing. If the prospect clicks directly on the ad he o
> A lighting company seeks to study the percentage of defective glass shells being manufactured. Theoretically, the percentage of defectives is dependent on temperature, humidity, and the level of artisan expertise. Complete historical data are available f
> What essential characteristics distinguish a true experiment from other research designs?
> What ethical problems do you see in conducting experiments with human participants?
> Why would a noted business researcher say, “It is essential that we always keep in mind the model of the controlled experiment, even if in practice we have to deviate from an ideal model”?
> What ethical risks are involved in observation? In the use of unobtrusive measures?
> Distinguish between the following: a) Internal validity and external validity. b) Preexperimental design and quasi-experimental design. c) History and maturation. d) Random sampling, randomization, and matching. e) Environmental variables and extran
> Below are some terms commonly found in a management setting. Are they concepts or constructs? Give two different operational definitions for each.
> Describe the characteristics of the scientific method.
> What is business research?
> Fill in the missing blocks for the ANOVA summary table on net profits and market value used with regression analysis. a. What does the F tell you? (alpha = .05) b. What is the t value? Explain its meaning.
> Confronted by low productivity, the president of Oaks International, Inc. asks a research company to study job satisfaction in the corporation. What are some of the important reasons that this research project may fail to make an adequate contribution to
> It costs thousands of dollars to generate an application (apps) for the Apple iPad. Just offering an APP is not a guarantee of success. The most successful APPS, sold as downloads, have to offer true functional value. Apple takes weeks to review an app
> A company is experiencing a poor inventory management situation and receives alternative research proposals. Proposal 1 is to use an audit of last year’s transactions as a basis for recommendations. Proposal 2 is to study and recommend changes to the pro
> Assume you are Hallmark. You have identified four new themes for your Hispanic-targeted cards, Sinceramente Hallmark. You now need research to help your card designers create cards that correctly execute those themes. What research should you do now?
> In May 2017, LAX, the world’s fourth-largest airport, relocated 15 airlines in a three-night (5 hours per night) period in order to accommodate Delta’s expansion. During the period, Delta operated more than 200 flights a day out of 4 terminals. In Termin
> Using Exhibit 7-5, identify the type of study described in each of the Snapshots featured in this chapter.
> Walmart got a very mixed reaction when it announced that after 30 years it was eliminating greeters from its overnight shift in more than 3800 stores, redefining the role of dayshift greeters, and moving them further into the store and away from the door
> You wish to analyze the pedestrian traffic that passes a given store in a major shopping center. You are interested in determining how many shoppers pass this store, and you would like to classify these shoppers on various relevant dimensions. Any inform
> Amazon’s Kindle (its electronic book, magazine, and newspaper reader) has been far more successful that its SONY competitor. This could be at least somewhat influenced by the “Oprah factor,” as the Kindle was first introduced on the Oprah show and strong
> Assume you are a manufacturer of small kitchen electrics, like Hamilton Beach/Proctor Silex, and you want to determine if some innovative designs with unusual shapes and colors developed for the European market could be successfully marketed in the U.S.
> What supports the use of a multiple rating list scale for the development of the survey measurement instrument?
> The observer-participant relationship is an important consideration in the design of observational studies. What kind of relationship would you recommend in each of the following cases? a. Observations of professional conduct in the classroom by the stud
> Distinguish between the following: a. Nonverbal, linguistic, and extra-linguistic analysis. b. Factual and inferential observation. c. Memory decay and selective filtering
> What is the nature of data collected in qualitative research?
> Compare the advantages and disadvantages of the observation to the communication approach. Under which circumstances could you make a case for using observation?
> Pepsi launched a new global branding campaign based on the concept of live in the moment called “Live For Now.” It did extensive research prior to the campaign’s launch. What research should be done to determine if the campaign is resonating with worldwi
> As populations age and young workers reject work requiring repetitive operations, factories around the world are turning to robots. It is estimated that the US has 176 robots for every 10,000 workers, with South Korea (531) and Germany (301) leading the
> On Thursday, May 28, 2009, in a presentation to financial analysts, the CEO of P&G announced a break from tradition. It would release Tide Basics, a value-oriented version of its leading Tide detergent. P&G holds the leading market share position in mor
> When Nike introduced its glow-in-the-dark Foamposite One Galaxy sneakers, fanatics lined up at distributors around the country. As crowds became restless, jockeying for position at the front of increasingly long lines for the limited-supply shoes, Footlo
> NCR Corporation, known as a world leader in ATMs, point-of-sale (POS) retail checkout scanners and check-in kiosks at airports, announced June 2009 that it would move its world headquarters from Dayton (OH) to Duluth (GA), a suburb of Atlanta, after more
> Distinguish between structured, semi structured, and unstructured interviews.
> Which type of graph would you recommend to show each of the following? Why? a. A comparison of changes in average annual per capita income for the United States and Japan from 2000 to 2018. b. The percentage composition of average family expenditure patt
> Why do senior executives feel more comfortable relying on quantitative data than qualitative data? Why might a qualitative research company lesson the senior-level executives’ skepticism?
> What is data saturation and how does it influence qualitative research?
> How does qualitative research differ from quantitative research?
> Below are a number of requests that a staff assistant might receive. What specific tools or services would you expect to use to find the requisite information? a. Has the FTC published any recent statements (within the last year) concerning its position
> At a BMW staff meeting, employees were told “We’re in the midst of an electric assault,” referring to electric cars introduced by Mercedes, Porsche, Jaguar, and most notably, Tesla. A fund manager at Union Investment, parroted this sentiment, “BMW is fa
> Your large firm is about to change to a customer-centered organization structure, in which employees who have rarely had customer contact will now likely significantly influence customer satisfaction and retention. As part of the transition, your superio
> Your task is to interview a representative sample of attendees for the large concert venue where you work. The new season schedule includes 200 live concerts featuring all types of musicians and musical groups. Since neither the number of attendees nor t
> Why would a researcher use a quota purposive sample?
> Describe the differences between a probability sample and a nonprobability sample.
> You plan to conduct a survey using unrestricted sampling. What subjective decisions must you make?
