ERP and cardiovascular correlates of source memory discrimination in older and younger adults /

There is much evidence to support an age-related decline in source memory ability. However, the underlying mechanisms responsible for this decline are not well understood. The current study was carried out to determine the electrophysiological correlates of source memory discrimination in younger and older adults. Event-related potentials (ERPs) and continuous electrocardiographic (ECG) data were collected from younger (M= 21 years) and older (M= 71 years) adults during a source memory task. Older adults were more likely to make source memory errors for recently repeated, non-target words than were younger adults. Moreover, their ERP records for correct trials showed an increased amplitude in the late positive (LP) component (400-800 msec) for the most recently presented, non-target stimuli relative to the LP noted for target items. Younger adults showed an opposite pattern, with a large LP component for target items, and a much smaller LP component for the recently repeated non-target items. Computation of parasympathetic activity in the vagus nerve was performed on the ECG data (Porges, 1985). The resulting measure, vagal tone, was used as an index of physiological responsivity. The vagal tone index of physiological responsivity was negatively related to the LP amplitude for the most recently repeated, non-target words in both groups, after accounting for age effects. The ERP data support the hypothesis that the tendency to make source memory errors on the part of older adults is related to the ability to selectively control attentional processes during task performance. Furthermore, the relationship between vagal tone and ERP reactivity suggests that there is a physiological basis to the heightened reactivity measured in the LP response to recently repeated non-target items such that, under decreased physiological resources, there is an impairment in the ability to selectively inhibit bottom-up, stimulus based properties in favour of task-related goals in older adults. The inconsistency of these results with other explanatory models of source memory deficits is discussed. It is concluded that the data are consistent with a physiological reactivity model requiring inhibition of reactivity to irrelevant, but perceptually-fluent, stimuli.

Information Asymmetry and Accounting Conservatism under IFRS Adoption

LaFond and Watts (2008) provide evidence that information asymmetry might be a determinant of accounting conservatism. One implication of their paper is that regulators trying to reduce information asymmetry by lowering the level of accounting conservatism might be wrong. However, there is a trend in moving away from conservative accounting. The typical example is IFRS adoption. Therefore, this paper studies information asymmetry and accounting conservatism under IFRS adoption. The results show that the level of accounting conservatism decreases after mandatory IFRS adoption, but the adoption of IFRS is likely to weaken the relationship between information asymmetry and accounting conservatism. Moreover, this paper investigates how the change of accounting conservatism under IFRS is related to the change in information environment. The finding shows that accounting conservatism increases information environment, supporting the idea that, by providing comparatively credible information, conservative accounting is beneficial to the information environment.

Accounting for Human Rights Violations Risk: Conflict Minerals Mandatory Disclosures under the Dodd Frank Act

This paper examines the equity market response to firms’ disclosure of human rights violation risk with regard to conflict mineral usage as required by Section 1502 of the Dodd-Frank Act (the Act). This paper assesses the aggregate equity market response to regulatory events leading to the passage of the Act, the equity market reaction to voluntary early disclosures and mandatory disclosures of conflict mineral information in Form SD, as well as the determinants of the equity market response. Using a sample of 4,399 US registrants from January 1, 2008 to September 30, 2014, we document a significant negative stock market reaction to the passage of the Act and to conflict minerals disclosures on Form SD. The equity market reaction is more negative and limited to companies that source their minerals from conflict zones, companies with human rights violations, and companies with ambiguous disclosures. Taken together, the results of this study provide an economic justification for companies with poor conflict minerals practices to improve in order to avoid high costs that will arise if firms are forced to disclose human rights abuses. This paper also provides preliminary evidence that Form SD is successful in reducing the governance gap that exposes investors to unnecessary sanction, litigation and reputation risk from firms’ activities in conflict minerals usage.