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Budget-Related Prediction Models in the Business Environment with Special Reference to Spot Price Predictions

Description: The purpose of this research is to study and improve decision accuracy in the real world. Spot price prediction of petroleum products, in a budgeting context, is the task chosen to study prediction accuracy. Prediction accuracy of executives in a multinational oil company is examined. The Brunswik Lens Model framework is used to evaluate prediction accuracy. Predictions of the individuals, the composite group (mathematical average of the individuals), the interacting group, and the environmental model were compared. Predictions of the individuals were obtained through a laboratory experiment in which experts were used as subjects. The subjects were required to make spot price predictions for two petroleum products. Eight predictor variables that were actually used by the subjects in real-world predictions were elicited through an interview process. Data for a 15 month period were used to construct 31 cases for each of the two products. Prediction accuracy was evaluated by comparing predictions with the actual spot prices. Predictions of the composite group were obtained by averaging the predictions of the individuals. Interacting group predictions were obtained ex post from the company's records. The study found the interacting group to be the least accurate. The implication of this finding is that even though an interacting group may be desirable for information synthesis, evaluation, or working toward group consensus, it is undesirable if prediction accuracy is critical. The accuracy of the environmental model was found to be the highest. This suggests that apart from random error, misweighting of cues by individuals and groups affects prediction accuracy. Another implication of this study is that the environmental model can also be used as an additional input in the prediction process to improve accuracy.
Date: August 1986
Creator: Kumar, Akhil
Partner: UNT Libraries

An Empirical Investigation of the Discriminant and Predictive Ability of the SFAS No. 69 Signals for Business Failure in the Oil and Gas Industry

Description: In 1982, the Financial Accounting Board (FASB) issued Statment of Financial Accounting Standards No. 69 (SFAS No. 69) which required oil and gas producing companies to disclose supplementary information to the basic financial statements. These disclosures include, costs incurred, capitalized costs, reserve quantities, and a standardized measure of discounted cash flows. The FASB considered these disclosures to be necessary to compensate for the deficiencies in historical cost financial statements. The usefulness of the new signals created by SFAS No. 69, however, is an empirical question and research regarding that objective is lacking. The objective of the study is to test the usefulness of SFAS No. 69. The research strategy used to achieve that objective is to compare the discriminant and predictive power of SFAS No. 69 signals or SFAS No. 69 signals combined with financial signals to that of financial signals alone. The research hypothesized that SFAS No. 69 signals by themselves or as supplmentary to financial signals have more discriminant and predictive ability for business failure in oil and gas industry than do financial signals alone. In order to test that hypothesis, the study used the multiple discriminant analysis technique (MDA) to develop three equations. The first is based on SFAS NO. 69 signals, the second on financial statement signals, and the third on joint financial and SFAS No. 69 signals. Data were collected from the 10-K's arid the annual reports of 28 oil and gas companies (14 failed and 14 nonfailed). The analysis was repeated for four time bases, one year before failure, two years before failure, three years before failure, and the average of the three years immediately before failure. After assessing the discriminant and predictive ability of each equation in the four time bases, a t-test was used to determine a significant difference in the discriminant ...
Date: December 1985
Creator: Eldahrawy, Kamal
Partner: UNT Libraries

A Critical Investigation of Positivism: Its Adequacy as an Approach for Accounting Research

Description: This dissertation addresses the influence of "positivism" in accounting research. Accounting research has been overwhelmed by "positivism" to the extent that the "scientific method" has become sacrosanct. The dysfunctional consequences include the extreme emphasis placed on methodology. Researchers believe that the methods applied, rather than the orientations of the human researcher, generate knowledge. This belief stems from an extreme objectivist ontological orientation. A second consequence of the "positivistic" influence is a change in direction of intellectual inquiries. Obsession with measurement and quantification has all but eliminated concern for values. Specifically this dissertation asserts that the "scientific method" has been misapplied and misunderstood. The misapplication is that a method developed in the natural sciences has been blindly accepted and endorsed in the social sciences. It has been misunderstood in the sense that the abstract Cartesian-Newtonian view of reality has been mistaken for reality itself. The ontological assumptions inherent in this view have become integrated in the Western mind. The axiomatic nature of these assumptions have been ignored. The primary purpose of this dissertation is to project a point concerning research and knowledge. Hence, there are no "research findings" in the conventional sense.
Date: August 1987
Creator: Eriksen, Scott D. (Scott Douglas)
Partner: UNT Libraries

An Examination of an Integrative Expectancy Model for Auditors' Performance Behaviors Under Time Budget Pressure

Description: In recent years there has been a growing use of expectancy theory to study motivation and performance in accounting environments. Such research efforts have resulted in reporting some inconsistent findings and low explanatory power for the expectancy model. In an attempt to increase the explanatory power of the model, several researchers have suggested the inclusion of nonexpectancy components in the model. This research was undertaken to develop an integrative expectancy model by incorporating some elements of goal setting theory and attribution theory into the expectancy formulation. The study was also designed to provide empirical evidence on the validity of a within-subject design of the proposed model through an empirical investigation of auditors* performance behaviors to meet budgeted time in public accounting firms. Alternative performance behaviors to meet budgeted time were modeled in three choice processes. The first deals with auditors choice to report unfiltered time (i.e. report actual time worked) as opposed to filtered time worked (i.e., underreporting and sign-off behaviors). The second process deals with auditors' choice to engage in underreporting as opposed to sign-off behaviors. The third process deals with auditors' choice to reduce or overrule some audit procedures based on professional judgment. Data were collected using an anonymous questionnaire from a sample of auditors at the staff, senior, and supervisory staff levels of fifty-three national, regional and local accounting firms in the Dallas- Fort Worth area. Data received from 671 participants were analyzed using th Automatic Interaction Detector (AID3) and multiple regression techniques. The findings of this research support the expectancy formulation and its relevancy to the accounting environments. However, five nonexpectancy variables were found to have significant relationships with auditors' choice processes to meet budgeted time. These five variables were supervision, budget feasibility, length of experience, organizational level and firm size classification.
Date: May 1985
Creator: Ibrahim, Mohamed El Hady M.
Partner: UNT Libraries

Prediction of Bankruptcy Using Financial Ratios, Information Measures, National Economic Data and Texas Economic Data

Description: The main purpose of this study is to develop a bankruptcy prediction model for the small business firm. Data was collected from the Dallas Small Business Administration (SBA), making this study specific to its decision makers. Existing research has produced models which predominately use financial ratios and information measures either independently or combined, and a few research models have used economic trends. This study varies from past studies in that it includes regional economic variables from the states of Texas. A sample of three-year data for 138 firms included fifteen bankrupt firms. This proportion of bankrupt/nonbankrupt firms approximates the proportion of repayed/defaulted loans in the SBA. Stepwise regression, set at the .15 level of significance, reduced a total of fifty-three variables to nine. These nine variables were then used to test twelve predictive models. All twelve models tested improved the SBA repayment rate and only two of the twelve would have caused the SBA to deny loans to applicants who eventually repaid. The study determined the model that included financial ratios, information measures, and Texas economic variables as best. It was also demonstrated that some of the variables used in this model could be eliminated without decreasing the predictive power of the model. The best of twelve models improved the SBA default rate by 40 percent without denying a loan to any applicant that eventually repaid.
Date: December 1987
Creator: Moore, Ronald K. (Ronald Kenneth)
Partner: UNT Libraries

Variation in Accounting Information Load: The Impact of Disclosure Requirements of FASB Statement No. 33 on Cash Flow Predictions of Financial Analysts

Description: In Statement No. 33, "Financial Reporting and Changing Prices," the FASB requires that some large companies disclose their historical cost/constant dollar and current cost information in the published financial statements. One of the purposes of these disclosures is to help users of the financial statements in assessing future cash flows. This study was directed toward the examination of the effects of the different levels of disclosures on cash flow projections.
Date: May 1982
Creator: Liu, Chao M.
Partner: UNT Libraries

An Assessment of the Effect of News Announcements on Stock Prices of Oil and Gas Producing Companies

Description: This empirical study is concerned with the extent to which news announcements affect the performance of common equity securities of oil and gas producing companies. The market effects of news announcements are considered to be of importance in resolving two issues. One concerns financial statement disclosure and the second concerns examination of prior oil and gas industry-related accounting research. This dissertation assumes capital market efficiency and addresses two research questions: do news announcements concerning activities of nonintegrated oil and gas producing companies affect the companies' common stock prices, and are announcements concerning nonintegrated oil and gas companies' financial, personnel, explorational, and developmental and operational activities used equally by investors in their decision-making?
Date: August 1982
Creator: Wright, Charlotte Jean
Partner: UNT Libraries