Prospective information in SEC filings: An analysis of management choice and the effect of auditor involvement--a signaling approach.
Item
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Title
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Prospective information in SEC filings: An analysis of management choice and the effect of auditor involvement--a signaling approach.
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Identifier
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AAI8915590
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identifier
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8915590
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Creator
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Elhosseiny, Mohamed Ahmed.
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Contributor
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Adviser: Douglas Carmichael
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Date
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1988
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Language
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English
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Publisher
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City University of New York.
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Subject
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Business Administration, Accounting
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Abstract
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The research presented in this study is based on signaling literature. This study assesses whether firm-specific characteristics, as suggested by economic theory, influence management choice to report and signal pro forma or financial forecast information. These two alternatives are provided by SEC for certain companies which are required to file pro forma information with the Commission. Companies are either to report on a pro forma basis or to report a forecasted income statement.;The study provides empirical evidence whether companies use auditor involvement in pro forma or financial forecast information as a vehicle to guarantee the validity of their signal.;The study presents a descriptive analysis of the reports used by auditors to describe their involvement with pro forma financial information.;The evidence is obtained from a sample of 162 pro forma and financial forecast information reviewed or examined by a CPA. Five independent variables were tested. The dependent variable was the choice to report pro forma or financial forecast information.;Profitability, Identity of CPA firm, and diversity and complexity in the market are found to be significantly and positively correlated with financial forecast choice. The implication is that these variables can affect not only accounting choice, but also economic decisions.;Managements use auditors involvement in prospective information as a vehicle to guarantee the validity of their information signal. The implication is that auditors involvement in prospective information depends upon managements willingness to get involved in such information.;The size of CPA firm affects accounting choice. This confirms the previous studies' conclusions that there is a relationship between size of a CPA firm and the quality of the information reported by a client.;It has been proven in this study that significant relationships exist between selected motivational variables and managerial choice of reporting and signaling prospective information. The implication is that accounting numbers prove to be significantly important in economic decision making.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
