Earnings management using estimates and the timing of adoption of accounting standards: An empirical examination of pensions

This study investigates the relationship between adoption timing of Statement of Financial Accounting Standards 87 and earnings management after adoption. Earnings management, defined consistent with Schipper (1989), is tested through hypotheses using (1) a portfolio approach and (2) pension rates. One Hypothesis uses a Modified Jones (1991) Model as a proxy for discretionary accruals and the other uses pension rate estimates.^ Statistically significant relationships are found between adoption timing and (1) discretionary accruals and (2) estimated rate-of-return (ROR) on pension plan assets. Early adopting firms tend to have lower discretionary accruals after adoption than on-time adopters. They also tend to use higher ROR estimates which are not supported by higher actual returns. Thus, while early adopters may be using ROR to manage income, this tends to not result in higher discretionary accruals. ^

Predator–prey naïveté, antipredator behavior, and the ecology of predator invasions

We present a framework for explaining variation in predator invasion success and predator impacts on native prey that integrates information about predator–prey naïveté, predator and prey behavioral responses to each other, consumptive and non-consumptive effects of predators on prey, and interacting effects of multiple species interactions. We begin with the ‘naïve prey’ hypothesis that posits that naïve, native prey that lack evolutionary history with non-native predators suffer heavy predation because they exhibit ineffective antipredator responses to novel predators. Not all naïve prey, however, show ineffective antipredator responses to novel predators. To explain variation in prey response to novel predators, we focus on the interaction between prey use of general versus specific cues and responses, and the functional similarity of non-native and native predators. Effective antipredator responses reduce predation rates (reduce consumptive effects of predators, CEs), but often also carry costs that result in non-consumptive effects (NCEs) of predators. We contrast expected CEs versus NCEs for non-native versus native predators, and discuss how differences in the relative magnitudes of CEs and NCEs might influence invasion dynamics. Going beyond the effects of naïve prey, we discuss how the ‘naïve prey’, ‘enemy release’ and ‘evolution of increased competitive ability’ (EICA) hypotheses are inter-related, and how the importance of all three might be mediated by prey and predator naïveté. These ideas hinge on the notion that non-native predators enjoy a ‘novelty advantage’ associated with the naïveté of native prey and top predators. However, non-native predators could instead suffer from a novelty disadvantage because they are also naïve to their new prey and potential predators. We hypothesize that patterns of community similarity and evolution might explain the variation in novelty advantage that can underlie variation in invasion outcomes. Finally, we discuss management implications of our framework, including suggestions for managing invasive predators, predator reintroductions and biological control.

An Analysis of Stock Market Performance:The Dow Jones Industrial Average and the Three Top Performing Lodging Firma: 1982-1988

In their dialogue - An Analysis of Stock Market Performance: The Dow Jones Industrial Average and the Three Top Performing Lodging Firms 1982 – 1988 - by N. H. Ringstrom, Professor and Elisa S. Moncarz, Associate Professor, School of Hospitality Management at Florida International University, Professors Ringstrom and Moncarz state at the outset: “An interesting comparison can be made between the Dow Jones lndustrial Average and the three top performing, publicly held lodging firms which had $100 million or more in annual lodging revenues. The authors provide that analytical comparison with Prime Motor Inns Inc., the Marriott Corporation, and Hilton Hotels Corporation.” “Based on a criterion of size, only those with $100 million in annual lodging revenues or more resulted in the inclusion of the following six major hotel firms: Prime Motor Inns, Inc., Marriott Corporation, Hilton Hotels Corporation, Ramada Inc., Holiday Corporation and La Quinta Motor Inns, Inc.,” say Professors Ringstrom and Moncarz in framing this discussion with its underpinnings in the years 1982 to 1988. The article looks at each company’s fiscal and Dow Jones performance for the years in question, and presents a detailed analysis of said performance. Graphic analysis is included. It helps to have a fairly vigorous knowledge of stock market and fiscal examination criteria to digest this material. The Ringstrom and Moncarz analysis of Prime Motor Inns Incorporated occupies the first 7 pages of this article in and of itself. Marriot Corporation also occupies a prominent position in this discussion. “Marriott, a giant in the hospitality industry, is huge and continuing to grow. Its 1987 sales were more than $6.5 billion, and its employees numbered over 200,000 individuals, which place Marriott among the 10 largest private employers in the country,” Ringstrom and Moncarz parse Marriott’s influence as a significant financial player. “The firm has a fantastic history of growth over the past 60 years, starting in May 1927 with a nine-seat A & W Root Beer stand in Washington, D.C.,” offer the authors in initialing Marriot’s portion of the discussion with a brief history lesson. The Marriot firm was officially incorporated as Hot Shoppes Inc. in 1929. As the thesis statement for the discussion suggests the performance of these huge, hospitality giants is compared and contrasted directly to the Dow Jones Industrial Average performance. Reasons and empirical data are offered by the authors to explain the distinctions. It would be difficult to explain those distinctions without delving deeply into corporate financial history and the authors willingly do so in an effort to help you understand the growth, as well as some of the setbacks of these hospitality based juggernauts. Ringstrom and Moncarz conclude the article with an extensive overview and analysis of the Hilton Hotels Corporation performance for the period outlined. It may well be the most fiscally dynamic of the firms presented for your perusal. “It is interesting to note that Hilton Hotels Corporation maintained a very strong financial position with relatively little debt during the years 1982-1988…the highest among all companies in the study,” the authors paint.

Fibonacci Series, Golden Proportions, and the Human Biology

Pythagoras, Plato and Euclid’s paved the way for Classical Geometry. The idea of shapes that can be mathematically defined by equations led to the creation of great structures of modern and ancient civilizations, and milestones in mathematics and science. However, classical geometry fails to explain the complexity of non-linear shapes replete in nature such as the curvature of a flower or the wings of a Butterfly. Such non-linearity can be explained by fractal geometry which creates shapes that emulate those found in nature with remarkable accuracy. Such phenomenon begs the question of architectural origin for biological existence within the universe. While the concept of a unifying equation of life has yet to be discovered, the Fibonacci sequence may establish an origin for such a development. The observation of the Fibonacci sequence is existent in almost all aspects of life ranging from the leaves of a fern tree, architecture, and even paintings, makes it highly unlikely to be a stochastic phenomenon. Despite its wide-spread occurrence and existence, the Fibonacci series and the Rule of Golden Proportions has not been widely documented in the human body. This paper serves to review the observed documentation of the Fibonacci sequence in the human body.