Nancy Thorley Hill

Corporate Lobbying Behaviour on Accounting for Stock-Based Compensation: Venue and Format Choices

This article investigates U.S. corporate lobbying of the Financial Accounting Standards Board (FASB) in the U.S. on the exposure draft to Financial Accounting Standard No. 123 (FAS 123), Accounting for Stock‐Based Compensation. Essentially, firms lobbied the FASB in one of three ways: (a) against disclosure/recognition of any additional information beyond that already required in U.S. proxy statements, (b) for summary footnote disclosure of all employee stock‐based compensation (SBC), or (c) for either pro forma or formal income statement recognition of all employee SBC. This study finds that the higher the level of the SBC of the top five executives, the less likely firms are to favour disclosing that information. This finding supports the hypothesis that economic self‐interests motivated lobbying behaviour on FAS 123. Furthermore, the study finds that U.S. corporations lobby against disclosure of executive SBC in the annual reports even when the annual reports would disclose no additional information beyond that currently disclosed in proxy statements. This is evidence that managers perceive that the venue of disclosure (proxy versus annual report) matters. It is posited that managers lobbied against disclosure of SBC to avoid possible changes to compensation contracts which in turn could adversely affect stock prices. In sum, the results support the notion that managerial self‐interest affects lobbying behaviour on the venue as well as the format of disclosure.

An Exploratory Analysis of Textbook Usage and Study Habits: Misperceptions and Barriers to Success

The authors explore how and to what extent students use their textbooks. Data was collected through a survey regarding when reading is primarily done, how the textbook is used for studying, and which specific study strategies the students used. The results indicate that students know it is important to read, know the professor expects them to read, and know it will impact their grade, yet most students still do not read the textbook. Finally, we also examine what students feel would motivate them to increase their usage of the textbook.

An international comparison of ethical reasoning abilities: Accounting students from Ireland and the United States☆

Abstract Accountants are often confronted with ethical decisions. Yet, some prior research indicates that both public accountants and accounting students in the U.S. may not have as high a level of moral reasoning as other professionals. One measure of moral reasoning ability is the Principled score, or P score, as determined by the Defining Issues Test. Prior research on accounting professionals and students using this measure has largely been confined to the U.S. This study compares the ethical reasoning abilities of American and Irish accounting students. We find that the mean P scores of American and Irish students are similar. However, gender and liberal/conservative attitudes are significant explanatory variables for moral reasoning ability across countries. In addition, our results show that students do correctly self-assess their moral reasoning abilities. We also find that those students with the lowest levels of moral reasoning abilities are the least likely to favor required ethics training in accounting programs. This may imply that students most in need of ethical training are less likely to seek this training.

Instructional case: Choices and dilemmas in accounting for stock-based compensation

Abstract Corporations often seek to motivate managers to think and act long-term by including stock options as part of their compensation. This leads to several interesting consequences. For example, how should the stock options be valued and reported in the financial statements? What types of conflicts of interests (for example, between the CEO and shareholders) does the use of stock options attempt to resolve? Which types of firms would be more likely to use stock options? Would certain firms be penalized in the market if they were forced to disclose the often sizable value of stock options in CEO compensation packages? This case provides a framework for valuing stock options to determine their effect on CEO compensation and corporate net income. Such an analysis helps illustrate that understanding and selecting a GAAP has ‘managerial’ as well as ‘financial’ accounting implications.