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Three Studies of Stakeholder Influence in the Formation and Management of Tax Policies
Title
Three Studies of Stakeholder Influence in the Formation and Management of Tax Policies.
Creator
Chen, Jason, Roberts, Robin, Schmitt, Donna, Robb, Sean, Patten, Dennis, University of Central Florida
Abstract / Description
This dissertation consists of three separate but interrelated studies examining the formation and management of tax policies. The first study uses stakeholder theory (ST) to investigate the strategic management practices of the Transport for London (TfL) during discrete stages in the adoption, implementation, and amendments of the tax policy reform known as the London Congestion Charge (LCC). Results indicate that TfL has utilized power, legitimacy, and urgency as its main policy management...
Show moreThis dissertation consists of three separate but interrelated studies examining the formation and management of tax policies. The first study uses stakeholder theory (ST) to investigate the strategic management practices of the Transport for London (TfL) during discrete stages in the adoption, implementation, and amendments of the tax policy reform known as the London Congestion Charge (LCC). Results indicate that TfL has utilized power, legitimacy, and urgency as its main policy management tactics with a significant emphasis on legitimatizing the LCC and its subsequent policy amendments.The second study draws on social exchange theory (SET) to reexamine the relationship between corporations and legislators during tax policy processes. Data for the study come from publicly available political action committee (PAC) contribution activities surrounding the Energy Independence and Security Act of 2007 (EISA07). By examining the endogeneity between legislators' voting patterns and PAC contributions by corporations, this study aims to refine empirical work on corporate political strategy, especially as it relates to crucial tax provisions embedded within an intensely debated policy proposal. Using simultaneous equations modeling (SEM), results are consistent with SET showing that an implicit and reciprocal relationship exists between corporations and legislators. This relationship affects the interdependence of how legislators vote for public policies and the amount of corporations' financial contributions to legislators.The third study investigates and aims to validate the empirical applicability of Dahan's (2005) typology of political resources in explicating the political interactions between stakeholder groups and legislators in the development of EISA07. I discuss how and why the mode of operations and various political resources employed by stakeholder groups affected the final EISA07 language concerning domestic production deduction tax credits for the oil and gas industry. Publicly available data show that both supporting and opposing stakeholder groups employ tactics consistent with Dahan's (2005) typology. However, both stakeholder groups tend to use an interactive or positive political approach to gain access and favor of legislators instead of an adversarial approach. Ultimately, the tax credits were preserved. Taken as a whole, the three studies advance the tax and public policy research literature in accounting by studying how and why relevant stakeholders affect the formation and ongoing management of public and tax policies.
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Date Issued
2012
Identifier
CFE0004343, ucf:49423
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0004343
Three Studies Examining Nonprofessional Investors' Decision Making
Title
Three Studies Examining Nonprofessional Investors' Decision Making.
Creator
Triki, Anis, Arnold, Vicky, Sutton, Steven, Schmitt, Donna, Hampton, Clark, University of Central Florida
Abstract / Description
This dissertation consists of three studies exploring nonprofessional investors' decision making. Technological advancements witnessed by the capital markets in recent years have caused significant changes to the dissemination and use of information, particularly by nonprofessional investors. Among these developments is the growth of social media that allows anyone to post information upon which others may rely and the availability of DAs that assist decision makers in evaluating the quality...
Show moreThis dissertation consists of three studies exploring nonprofessional investors' decision making. Technological advancements witnessed by the capital markets in recent years have caused significant changes to the dissemination and use of information, particularly by nonprofessional investors. Among these developments is the growth of social media that allows anyone to post information upon which others may rely and the availability of DAs that assist decision makers in evaluating the quality of information reported by an organization. The purpose of this dissertation is to investigate the benefits of using DAs that are capable assessing the quality of information reported to capital market participants and to investigate the effect of information retrieved from social media on nonprofessional investors' decisions.Study 1 highlights concerns over the ease of spreading video disclosures via social media outlets. Recent evidence from practice and research suggests that the trend of issuing video disclosures is growing and that investors are exposed to the risk of including deceptive information contained in those videos in their decision making process. The theoretical model introduced in this study suggests that investors can use deception detection DAs to identify deceptive behavior in video disclosures, and that the use of such DAs affects their perceptions of disclosure credibility. This study posits that management's pre-existing reputation affects investors' perceptions of disclosure credibility, and that the negative output of a deception detection DA can dilute the effect of management's pre-existing reputation on investors' perceptions of disclosure credibility. Using data from 376 nonprofessional investors, the findings support the proposed theoretical model and suggest that deception detection dilutes the effect of management's pre-existing reputation on investors' perceptions of disclosure credibility. The effect of management's pre-existing reputation on investors' perceptions of disclosure credibility is significantly weaker when the output of deception detection DA detects deception than when it fails to detect deception. Supplemental analyses suggest that the effect of deception detection is not limited to investors' perceptions of disclosure credibility, but also affects investors' willingness to invest. Deception detection dilutes the effect of management's pre-existing reputation on willingness to invest as well. These findings suggest that investors can mitigate the risks associated with video disclosures and improve their decisions by using deception detection DAs. Study 2 highlights concerns over the spread of linguistic manipulations in corporate disclosures. Recent evidence from the accounting literature suggests that managers strategically use linguistic manipulations and that investors unintentionally include the effect of these linguistic manipulations in their decisions. This study builds on the existing literature on linguistic manipulations and argues that providing investors with a DA that is capable of detecting linguistic manipulations can assist them in making investment decisions. The theoretical model introduced Study 2 suggests that the detection of linguistic manipulations (the occurrence of an expectation violation) moderates the effect of managers' incentives on investors' willingness to invest through disclosure credibility such that the effect of managers' incentive on investors' willingness to invest is expected to be weaker when the DA detects linguistic manipulations than when the DA fails to detect linguistic manipulations. Using data from 472 nonprofessional investors, the findings do not support the proposed theoretical model and suggest the effect of management incentive on investors' willingness to invest through disclosure credibility is not moderated by the detection of linguistic manipulations. These findings show that detecting linguistic manipulation has the same effect on managers with incentive to manipulate the language used corporate reports as those with no incentive to manipulate the language used in corporate reports. Study 3 highlights concerns over social media outlets that have enabled investors to communicate between themselves at an unprecedented rate. This study highlights the risk of using information retrieved from social media outlets and argues that investors are exposed to the risk of including erroneous information in their information set. This study uses the (")Social Identification of the De-individuation Effect(") model (SIDE) to argue that visual anonymity has an effect on investors' willingness to invest through their perceptions of disclosure credibility and that this effect depends on whether investors' have low or high social identification with the group of forum users. Using data from 401 nonprofessional investors, the findings do not support the proposed theoretical model. Nevertheless, findings from this study suggest that investors' social identification has an effect on their perceptions of disclosure credibility, and that social identification and visual anonymity have a joint effect on investors' willingness to invest. More precisely, investors with low social identification are more influenced by forum comments when they read the forum comments via text than when they view the forum comments via video; and, investors with high social identification are more influenced by forum comments when they view the forum comments than when they read the forum comments. While findings from this study provide support for the moderating role of social identification advanced in SIDE, the moderating role of social identification is in the opposite direction. Thus, this study fails to provide support for SIDE.
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Date Issued
2015
Identifier
CFE0005894, ucf:50879
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0005894
Re-Thinking the Intentionality of Fraud: Constructing and Testing the Theory of Unintended Amoral Behavior to Explain Fraudulent Financial Reporting.
Title
Re-Thinking the Intentionality of Fraud: Constructing and Testing the Theory of Unintended Amoral Behavior to Explain Fraudulent Financial Reporting.
Creator
Dill, Andrew, Sutton, Steven, Arnold, Vicky, Schmitt, Donna, Schminke, Marshall, University of Central Florida
Abstract / Description
My three-paper dissertation is aimed at applying the concepts of bounded ethicality and ethical fading to accounting fraud. Typical of relatively new fields such as behavioral ethics, theoretical models are scarce (Tenbrunsel (&) Smith-Crowe, 2008). As such, the purpose of Study 1 is to unify disparate theories and ideas from psychology and behavioral ethics as a means of constructing a theory, the Theory of Unintended Amoral Behavior (TUAB), which includes the concepts of bounded ethicality...
Show moreMy three-paper dissertation is aimed at applying the concepts of bounded ethicality and ethical fading to accounting fraud. Typical of relatively new fields such as behavioral ethics, theoretical models are scarce (Tenbrunsel (&) Smith-Crowe, 2008). As such, the purpose of Study 1 is to unify disparate theories and ideas from psychology and behavioral ethics as a means of constructing a theory, the Theory of Unintended Amoral Behavior (TUAB), which includes the concepts of bounded ethicality and ethical fading. In addition, the pressure for management to meet earnings expectations is discussed through the lens of the TUAB as an example of how one may unknowingly misreport.Studies 2 and 3 apply the TUAB to investigate how certain contextual factors interact with egocentric biases to increase the likelihood of ethical fading. Specifically, Study 2 consists of an experiment exploring how inferior pay among managers interacts with egocentric perceptions of fairness and envy to affect the likelihood of one engaging in ethical fading and fraudulent behavior. Study 3 also utilizes an experimental methodology to examine how the pressure to meet earnings forecasts interacts with egocentric perceptions of fairness and negative affect to influence the probability of ethical fading and fraudulent acts.The results for Study 2 indicate that one who is paid at a lower rate is more likely to view this disparity as unfair, which leads to a greater feeling of envy. Although envy had no significant direct effect on ethical fading in the primary analyses, a supplemental analysis revealed that a person's risk preference might moderate this relationship. The primary findings of Study 2 suggest that individuals who experience a higher degree of ethical fading are more likely to commit fraud, and that ethical fading, along with perceived unfairness, seem to be significant psychological processes that explain how differences in pay may lead to fraud. The primary finding of Study 3 is that, like Study 2, fraud is more likely to occur as an individual experiences a higher degree of ethical fading. Furthermore, this study suggests that those who are closest to meeting an earnings target are the most likely to engage in fraudulent behavior. Finally, the results failed to find any support that one's egocentric perceptions of fairness and negative affect contribute towards his or her ethical behavior in a goal achievement setting. The primary contributions of this dissertation is that it unifies various theories and ideas from psychology and behavioral ethics to establish a testable theory (TUAB) that includes the concepts of bounded ethicality and ethical fading, serves as an initial test of TUAB, and provides evidence that unethical behavior is not necessarily the result of one consciously forsaking his or her ethics for some other desired goal (i.e., profit).
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Date Issued
2016
Identifier
CFE0006097, ucf:51211
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0006097
Interactive Data Visualization in Accounting Contexts: Impact on User Attitudes, Information Processing, and Decision Outcomes
Title
Interactive Data Visualization in Accounting Contexts: Impact on User Attitudes, Information Processing, and Decision Outcomes.
Creator
Osidipe, Oluwakemi, Sutton, Steven, Arnold, Vicky, Schmitt, Donna, Benford, Tanya, University of Central Florida
Abstract / Description
In 2009, The United States Securities and Exchange Commission (SEC) issued a mandate requiring public companies to provide financial information to the SEC and on their corporate Web sites in an interactive data format using the eXtensible Business Reporting Language (XBRL). This dissertation consists of three separate, but interrelated studies exploring issues related to interactive data visualization in financial reporting contexts. The first study employs theories in information systems ...
Show moreIn 2009, The United States Securities and Exchange Commission (SEC) issued a mandate requiring public companies to provide financial information to the SEC and on their corporate Web sites in an interactive data format using the eXtensible Business Reporting Language (XBRL). This dissertation consists of three separate, but interrelated studies exploring issues related to interactive data visualization in financial reporting contexts. The first study employs theories in information systems (task-technology fit and the technology-performance chain model) and cognitive psychology (cognitive load) to examine the link between characteristics of interactive data visualization and task requirements in a financial analysis context, and the impact of that link on task performance and user attitudes towards interactive data technology use. The second study extends the first by examining the effects of prior interactive data technology use on future choice to use an interactive technology. This study uses the IS continuance model to examine antecedents to continued interactive technology use based on previous assessments of task-technology fit and performance impacts from the first study. The third study employs an elaboration likelihood model (ELM) to understand the interactivity concept and its impact on information processing and belief/attitude formation. This study examines the impact of increasing interactivity on investor perceptions of forecast credibility and on a firm's attractiveness as a potential investment choice. Overall, these three studies provide insights on factors that impact decision-making in interactive financial reporting contexts, and how characteristics of interactive data visualization impact information processing, user perceptions, and task performance.
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Date Issued
2014
Identifier
CFE0005225, ucf:50634
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0005225
Three Essays on Investments: An Examination of the Effects of Diversification and Taxes
Title
Three Essays on Investments: An Examination of the Effects of Diversification and Taxes.
Creator
Hurst, Matthew, Anderson, Randy, Chen, Honghui, Schnitzlein, Charles, Frye, Melissa, Schmitt, Donna, University of Central Florida
Abstract / Description
Chapter 1 examines the effect of property-type diversification in equity real estate investment trusts (REITs) from 1995 to 2006. A strong positive relationship is documented between property-type diversification and return on assets, return on equity, and Tobin's Q. The diversification benefit comes from both the ability to select better performing property types in (")hot(") markets and the limited exposure to poorly performing property types in (")cold(") markets. Diversified REITs produce...
Show moreChapter 1 examines the effect of property-type diversification in equity real estate investment trusts (REITs) from 1995 to 2006. A strong positive relationship is documented between property-type diversification and return on assets, return on equity, and Tobin's Q. The diversification benefit comes from both the ability to select better performing property types in (")hot(") markets and the limited exposure to poorly performing property types in (")cold(") markets. Diversified REITs produce higher cash flows relative to equity as a result of a broader opportunity set; moreover, return on assets increases with the degree of diversification, which suggests significant shielding to property-type specific risk. Additionally, results indicate that diversified REITs operate and trade above their contemporaneous predicted values, which are calculated using imputed multipliers from specialized REITs. The evidence shows that the market is operating efficiently and has incorporated this information; diversified REITs Q ratios are significantly greater than specialized REITs.Chapter 2 uses a large sample of municipal bond closed-end funds to examine how tax liability affects seasonal trading. Optimal tax trading dictates that net tax liability be calculated after all trades. Investors' net tax liability is held in a holding account of his or her choosing. This study investigates what happens when there is tax liability in excess of Safe Harbor, and tax holding accounts are liquidated to cover the payments. We find that there exists a pattern of negative returns and increased volume in the month of March that is unexplained by changes in yield. Chapter 3 examines the ex-dividend day effect for municipal bond closed-end. The proposed explanations for this phenomenon are tax effects, short-term trading and/or market microstructure effects. In this study I use a unique set of dividend distributions to provide additional evidence that ex-dividend behavior is related to taxation as well as short-term trading. The sample I use is comprised of dividends in nontaxable closed-end funds, which ordinarily are not subject to Federal Income Tax. However, there is an occasional distribution that is subject to capital gains or ordinary income tax. This provides a unique environment in which to study the ex-dividend price behavior of a fund while eliminating the need for comparisons across funds.
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Date Issued
2012
Identifier
CFE0004549, ucf:49228
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0004549
Decision Making in Corporate Taxation
Title
Decision Making in Corporate Taxation.
Creator
Brown, Bonnie, Arnold, Vicky, Schmitt, Donna, Kelliher, Charles, Tian, Yu, Rupert, Timothy, University of Central Florida
Abstract / Description
This dissertation is comprised of three experimental studies that examine corporate tax aggressiveness through an investigation of judgment and decision making in the corporate tax environment. Studies 1 and 2 examine individual judgment involved in decision making (i.e., assessments of tax positions based upon tax scenario facts and tax authority). Study 1 examines how advice from external tax advisors and a tax advisor's association with the company's audit firm influences the...
Show moreThis dissertation is comprised of three experimental studies that examine corporate tax aggressiveness through an investigation of judgment and decision making in the corporate tax environment. Studies 1 and 2 examine individual judgment involved in decision making (i.e., assessments of tax positions based upon tax scenario facts and tax authority). Study 1 examines how advice from external tax advisors and a tax advisor's association with the company's audit firm influences the aggressiveness of experienced in-house corporate tax decision makers. Study 2 examines how situational factors in the corporate tax environment interact with individual traits to affect individual-level tax aggressiveness, focusing in greater depth upon the process of individual judgment and decision making. Study 3 extends the investigation of situational factors from individual-level decision making to a group-level analysis, examining individual-level and group-level decision making in a tax setting (i.e., tax compliance decisions).Overall, results reflect the complexity of the corporate tax environment. The effects of the situational factors examined in the dissertation generally influence decision makers' own perceptions. For example, Study 1 results suggest that tax advisor identity influences how corporate tax directors weight advice only if the advice is conservative and if the tax directors agree with the advice. Additionally, in Studies 2 and 3, decision maker perceptions are found to mediate the effects of manipulated situational factors. In Study 2, regulatory focus state indirectly influences individual tax aggressiveness through the perception of the tax advisor's level of client advocacy. In Study 3 decision maker type, a situational factor, affects tax compliance decision riskiness indirectly through feelings of responsibility for the possible outcomes of the decision. Collectively these studies contribute to the nascent literature on decision making in a corporate tax environment, helping to lay the groundwork for future studies in this area.
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Date Issued
2016
Identifier
CFE0006269, ucf:51035
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0006269