Parunchana Pacharn

The Impact of a Flexible Assessment System on Students' Motivation, Performance and Attitude

We examine a flexible assessment system that allows students to determine the weights allocated to each course component and to re-allocate the weights in response to achieved scores. The flexibility is intended to encourage students’ participation in the learning process, thereby promoting self-regulated learning skills. We compare this assessment system to a traditional system and to another system, in which the students may choose their own weights but cannot change them later in the term. We examine the impact on students’ motivation as measured by the Motivated Strategies for Learning Questionnaire (MSLQ), as well as the impact on grades and students’ attitudes. Our results indicate little improvement in motivation, grades or attitudes when students design and commit to their grading plans early in the term. However, the more flexible system, which allows for re-allocation, appears to improve students’ grades, self-reported motivation and attitudes.

Impact of group exams in a graduate intermediate accounting class

ABSTRACT Cooperative learning techniques have been found to be quite successful in a variety of learning environments. However, in university-level accounting courses, investigations of the efficacy of cooperative learning pedagogical methods have produced mixed results at best. To continue the search for a cooperative learning method that is effective in accounting education, this study examines the use of group exams in a graduate intermediate accounting class. We provide evidence of a number of positive effects. Average scores on group exams were consistently higher than average scores on exams taken in individual format. Students adapted to the new assessment format rapidly and effectively. Further, students found the experience positive and believed they had improved important skills such as communication, time management, and teamwork. While some evidence of a free-rider effect and negative behavior associated with it was found in the beginning, this behavior was apparently temporary.

Accounting for Goodwill and Incentive to Invest in Intangible Assets

I examine management’s investment decision under the traditional amortization rules for intangible assets and that under the new rules such as IAS 36, IAS 38, and SFAS 142 where costs of purchased goodwill are subject to periodic impairment tests. I find that under the amortization rules, the manager’s hurdle rate to invest in the internally generated asset (IGA) is greater than that of the shareholder. Under the impairment rules, the manager hurdle rate to invest in the IGA is even greater than that under the amortization rules. However, the manager employs another hurdle rate for a partial investment in the IGA. This is because the IGA may serve as a “cushion” and help reduce the impairment charges on the purchased goodwill. I provide the conditions under which optimal (and suboptimal) investment decisions occur. The results overall suggest that firms and standard setters consider the incentive side of the standards in addition to the valuation side which is currently the sole focus.

Option Backdating: Market Overreaction and Management Motives

Prior studies on option backdating have focused exclusively on the initial backdating investigation announcements. We extend the analyses to consider the outcomes of the investigation as well. By examining the market responses both to the initial investigation announcement and to the investigation outcome, we provide an evidence that the market may have overreacted to the initial investigation announcement. Our results also show that the media bias in covering more bad than good news may have contributed to the overreaction. Finally, we re-examine the issue of management motives, focusing on firms which were found to be guilty of intentional backdating. No prior study has addressed the motive issues with the sample of “true” backdators before.

The Firing of CEOS and Severance Pay

Stockholders and regulators question whether severance packages are beneficial to stockholders. We study an agency setting where, in period 2, the shareholder can either retain the manager or fire him if a suitable alternative candidate exists. The manager’s effort in period 1 not only determines his productive output but also the probability that a suitable candidate emerges in the second period. We consider three model variations in which: (1) the shareholder can costlessly commit to a firing strategy, (2) severance pay has a duel role that includes commitment and motivational efficiency, and (3) severance pay influences the manager to choose a high-return, risky project. Generally, severance pay is more efficient than performance-based bonuses when the arrival of a suitable candidate is a better signal of the manager’s effort than the output generated by the manager. We also show that contract settings exist in which the shareholder optimally commits to severance pay for a low productive outcome. Although casual observers may interpret severance pay in such cases as paying the manager for poor performance, committing to severance pay helps motivate the manager to choose high effort and a high-return investment project.