Jacqueline L. Reck

Enterprise resource planning systems: comparing firm performance of adopters and nonadopters

Abstract The current study examined the longitudinal impact of ERP adoption on firm performance by matching 63 firms identified by Hayes et al. [J. Inf. Syst. 15 (2001) 3] with peer firms that had not adopted ERP systems. Results indicate that return on assets (ROA), return on investment (ROI), and asset turnover (ATO) were significantly better over a 3-year period for adopters, as compared to nonadopters. Interestingly, our results are consistent with Poston and Grabski [Int. J. Account. Inf. Syst. 2 (2001) 271] who reported no pre- to post-adoption improvement in financial performance for ERP firms. Rather, significant differences arise in the current study because the financial performance of nonadopters decreased over time while it held steady for adopters. We also report a significant interaction between firm size and financial health for ERP adopters with respect to ROA, ROI, and return on sales (ROS). Specifically, we found a positive (negative) relationship between financial health and performance for small (large) firms. Study findings shed new light on the productivity paradox associated with ERP systems and suggest that ERP adoption helps firms gain a competitive advantage over nonadopters.

Market Reaction to ERP Implementation Announcements

The objective of this research is to examine how the capital market responds when a firm announces that it plans to implement an enterprise resource planning (ERP) system. This is the first study t...

Information Systems Outsourcing Announcements: Investigating the Impact on the Market Value of Contract‐Granting Firms

The objective of this research project is to examine the impact of information systems (IS) outsourcing announcements on the market value of contract‐granting firms. This study is important to researchers, professionals, and policy makers as it provides empirical evidence from the capital market that outsourcing is considered to be a value‐added business exchange for contract‐granting firms. Research findings indicate positive and significant market value gains for smaller vs. larger firms and service vs. nonservice industry firms. The significant effects observed in this study are explained by the existence of information asymmetry in the capital market for smaller firms and service firms, and by the relatively higher investment made by service firms in information technology. This study contributes to accounting research by examining the importance of providing financial report users with nonfinancial forward‐looking information concerning managements strategic decisions, such as the decision to outsou...

The usefulness of financial and nonfinancial performance information in resource allocation decisions

Abstract In this article I evaluate the impact of adding nonfinancial performance information to reports containing financial information. I consider the association between nonfinancial information and the resource allocations and performance evaluations made by individuals involved with the governmental budget process. Tests indicated that the allocation decisions made by these individuals were not significantly associated with nonfinancial information. However, nonfinancial information was influential in the performance evaluations of both the agency and the agencys director. Although I found no association between nonfinancial information and resource allocations, I found an association between financial information and resource allocations. Additionally, financial information significantly impacted the performance evaluation of the agency director. An additional test of the importance of nonfinancial information in resource allocations involved resource scarcity. As discussed in the paper, I hypothesized that under scarcity nonfinancial information and financial information would become more important to the allocation process. My results indicated that nonfinancial information had no impact on allocation decisions made under scarcity. The association between financial information and resource allocations was opposite that predicted.

The Value Relevance of a Non-GAAP Performance Metric to the Capital Markets

Purpose - The study is driven by concerns raised by standard setters and others about the usefulness of performance reporting under generally accepted accounting principles (GAAP). Of primary interest is whether explicitly defining what information should be included in earnings results in an earnings measure that is more relevant than operating earnings computed according to current GAAP. The purpose of this paper is to explore whether reducing management discretion in the reporting of performance adds to the value relevance of the performance measures reported to capital markets. Design/methodology/approach - The value relevance of this non-GAAP earnings measure is examined by estimating market valuation and returns models for 518 US firms included in the Standard & Poors 500 Index over the time period 2002-2007. Findings - Results show that the explicitly defined non-GAAP measure used is significantly associated with equity market values and returns and is significantly more value-relevant than the GAAP measure. Originality/value - The paper contributes to accounting literature assessing the relevance of earnings in setting equity market value. More specifically, it provides evidence consistent with prior results that non-GAAP performance measures are more useful in valuation than GAAP earnings. However, in contrast with prior studies, the more explicit performance measure the paper examines removes some of the classificatory discretion pervasive in other non-GAAP earnings metrics.

An Analysis of U.S. and Latin American Financial Accounting Ratios

Abstract Financial accounting ratios of non-U.S. companies are subject to misinterpretation by U.S. investors due to differences in accounting principles, institutional practices, and economic environments. The purpose of this study is to compare selected financial accounting ratios of companies from seven Latin American countries with those of a matched sample of U.S. companies, and explain any observed differences in the ratios based on the above three factors. In general, the results indicated that the liquidity, activity, and coverage ratios of the Latin American companies were lower than those of the U.S. companies. The profitability ratios varied, however, with the profit margin on sales generally higher for the Latin American companies, the return on assets mixed, and the return on equity ratios not significantly different between the Latin American and U.S. companies.

Methods and resources to increase student interest in governmental accounting

Coverage of governmental accounting is typically light within both accounting and public administration programs, and instructors generally do not have access to the same number of resources that they may find for courses which have been ingrained in their curricula for decades. Hence, it can be difficult for instructors to create or maintain student interest in governmental accounting without such resources. The purpose of this paper is to examine how instructors can emphasize relevance to increase the interest level of students in governmental accounting and to discuss how current resources and various pedagogical tools may be used as facilitators.

Ethics and Budget Allocation Decisions of Municipal Budget Officers

The purpose of this study is to extend research which has looked at moral judgment. Specifically, the study examines the impact of moral judgment on the budget allocations made by government budget officers. Additionally, and as a result of previous research findings, the study looks at the relationship between political ideology, gender, age, profession and moral judgment.Results support prior research which has found an association between political ideology and moral judgment, and between gender and moral judgment.There was no indication that the level of moral judgment among accountants is different from that of other individuals serving as budget officers, or that age is significantly related to moral judgment. Additionally, the study finds that an individuals level of moral judgment has less of an impact on the individuals actions than does political ideology. Study results contribute to an understanding of the relationship of moral judgment to accounting, and the relationship of moral judgment to behavior. The study also adds to research into the relationship of political ideology and moral judgment.