Ashraf Khallaf

The Effects of Information Technology Expertise on the Market Value of a Firm

Based on 96 CIO appointments during 1987–1998, Chatterjee et al. (2001) conclude that newly created CIO positions add value to the firm. This paper reexamines that conclusion by using the markets reaction to existing position appointments to benchmark the markets reaction to newly created position appointments. Based on 461 CIO appointments to new and existing CIO positions during 1987–2002, we find no significant difference in the markets reaction to the two types of announcements over the entire sample period. This finding holds when we allow for the markets perception of the value of information technology to shift over time. We also find evidence that the market penalizes firms that fail to move quickly enough to obtain potential strategic advantages from new CIO positions, consistent with first mover advantages. Finally, consistent with Ang et al. (2003) who examine CEO appointments, we find that markets discriminate among newly appointed CIOs in that CIO quality characteristics are associated as...

Information technology investments and nonfinancial measures: A research framework

Abstract Despite the substantial growth of IT investments, evidence on their impact on firm performance remains inconclusive. An important management question is whether anticipated economic benefits of IT investments are being realized. The intangible benefits obtained from IT are not captured by accrual-based accounting measures alone, and, therefore, call for a comprehensive measure that focuses on segments of performance influenced by IT investments. This study proposes a framework that utilizes nonfinancial measures to link IT investments to their intangible benefits and applies the agency theory to examine the contribution of IT investments by tying managerial compensation to firm value.

Does long term performance improve following the appointment of a CIO

The chief information officer (CIO) is crucial to integrating information technology into firm strategy. While there is evidence that capital markets react favorably to CIO appointments in the days surrounding the appointment announcement, this is the first study to examine the change in firm accounting performance in the years following the appointment of a new CIO. To control for exogenous factors unrelated to CIO effectiveness, the performance of appointing firms is measured relative to industry-wide average performance for firms that did not create a new or fill an existing CIO position. Using multiple accounting return measures that are responsive to changes in efficiency and effectiveness, we find an improvement in performance that is limited largely to firms appointing to newly created positions. As expected, there are significant performance increases for “first movers” who create new CIO positions early relative to their competitors; however, firms late to appoint their first CIO also obtain similar advantages. We also find that the effect on firm performance is contingent on the economic environment of the firm and that performance improvement is most pronounced for CIO appointments occurring later in calendar time, for firms operating in industries with low sales growth, and for firms in industries with highly dynamic economic environments.

Active Learning Innovations In Introductory Financial Accounting

Abstract This chapter describes three active learning activities developed for use in the introductory financial accounting class: an interview with a financial statement user, an internal control paper, and a financial statement project where students analyze two competing businesses. We gathered student surveys and direct assessment data to see if these activities add value to the introductory accounting course. The learning activities were originally developed using Fink’s (2003) Taxonomy of Significant Learning, aligning the activities with Fink’s learning dimensions, which also support the higher order learning skills in Bloom’s revised taxonomy. Students completed surveys by comparing how well traditional class activities (i.e., homework and tests) and the new activities support the core competencies of the American Institute for Certified Public Accountants (AICPA). We also asked students open-ended questions on how they felt about these new activities. Researchers then compared pre- and postadoption assessment data to investigate the impact of the new learning activities on class completion rates and grades. Based on faculty comments and student survey results, the three active learning assignments appear to be more effective in developing many of the AICPA’s core competencies and real world skill sets valued by professionals, providing more value than traditional teaching methods. In addition, the passing rates in the course at the Youngstown State University increased by 12% after adopting the learning innovations.

Explaining the inconsistent results of the impact of information technology investments on firm performance: A longitudinal analysis

The purpose of this paper is to identify potential reasons for inconsistent results of the economic value of information technology (IT) investments. Furthermore, the study aims to develop framework and propositions to explore future opportunities and directions for research that examine the returns on IT investments.,This study conducted a longitudinal analysis of the literature review concerning the impact of IT investments on firm performance to identify the reasons to the so-called “IT productivity paradox” and to explore future opportunities and directions for future research.,The study provides and discusses the reasons for the inconsistent results in the prior research that examines IT investments payoff and suggested a framework and propositions for future research. Results of prior studies should be interpreted in the context of research questions raised, data used, level of analysis, IT investment measures, firm performance measures, time horizon and industry characteristics.,IT managers and researchers should align IT investments with the environment in which a firm operates and competes and with firm’s business strategies as important determinants of the return on IT investments.,Understanding the link between firm performance and IT investments assists researchers and practitioners to understand why firms continue to pour enormous resources into IT and, more importantly, specifies the conditions under which firms are likely to achieve competitive advantages from their IT investments.

Investors’ Behavior in an Emerging, Tax-Free Market

ABSTRACT We provide empirical evidence on the stock market participants’ behavior in an emerging market, with a tax-free environment. Our results show that United Arab Emirates’ (UAE) investors exhibit overconfidence and home bias, and tend to sell prior winners and buy prior losers. We find that investors rely on familiarity and on their information channels to make decisions. The results indicate that investors are risk averse, especially after the global financial crisis, which has had contagion effect on UAE markets. Investors attribute this effect to the inability to manage systemic crisis and to problems of information asymmetry, insider trading, and lack of good governance during crisis.

Capital Punishment And Financial Reporting Fraud: Implications For Secular Countries

ABSTRACT:Several papers investigate of the impact of the death penalty on the occurrence of FRF in an Islamic society. However, no study examines such a relationship in a secular society. This study examines whether imposing the death penalty can protect an Anglo-Saxon secular society from the diverse consequences of FRF. This paper addresses the research question in two ways. First, we extrapolate the rationale for capital punishment for committing FRF in Islamic countries to the Anglo-Saxon society, whose penal system embraces a non-Islamic view of death penalty. We conduct detailed exploratory analysis of the existing theoretical as well as empirical research that either advocates or opposes the role of capital punishment to prevent white color crime. Second, we establish an extended fraud pentagon model, which in our opinion could better lay out fraud preventing mechanism. Our fraud pentagon model consists of five components–pressure/incentives, opportunity, capability, rationalization/religious beliefs, and accountability. Our analysis of the current Anglo-Saxon penal system indicates that the secular society is imposing stricter punishment than ever, for committing white color crimes as FRF. However, given that the existing Anglo-Saxon regulations and penal system could not effectively deter the occurrence of FRF, we argue that the Anglo-Saxon society should not widely discard the notion of imposing the capital punishment for committing FRF, especially, if a financial crime is found to cause major damage to the society. This assertion particularly becomes logical, in light of the utilitarian view of punishment–which argues that death penalty can effectively curtail the incidence of major crimes in the society. Finally, we show that it is important to add a fifth element–accountability to the existing fraud model. The findings of this study are important given that (1) both policymakers are continually trying to form new regulation and laws to stop FRF, and (2) the academic community broadly disagrees on the efficacy of death sentence to combat crime. The findings imply that the impact of the death penalty in curbing FRF apply to Anglo-Saxon societies and, therefore, lawmakers and regulators should not simply disallow the notion of imposing capital punishment to FRF fraudsters.