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Essays on Financial Communication in Earnings Conference Calls
Essays on Financial Communication in Earnings Conference Calls Xiaoxi Wu This dissertation is submitted for the degree of Doctor of Philosophy September 2019 Department of Accounting and Finance Abstract Earnings conference calls are an important platform of financial communication. They provide researchers with unique opportunities to observe firm managers’ and financial analysts’ interactions and natural communication style in a daily-task environment. Relying on multidisciplinary theories and methods, this dissertation studies financial communication in conference calls from both the managers’ and the sell-side analysts’ perspectives. It consists of three self-contained studies. Chapter 2 focuses on managers’ communication strategies in conference calls. It explores, in the small non-negative earnings surprises setting, whether non-manipulators design communication strategies to separate themselves from earnings manipulators, and whether manipulators pool through obfuscation. Chapters 3 and 4 focus on sell-side analysts’ communication behaviour in conference calls. Chapter 3 examines how analysts’ people skills affect their communication behaviour and relationships with firm management. Chapter 4 applies both qualitative and quantitative discourse analyses and investigates how analysts use linguistic politeness strategies to establish socially desirable identities in publicly accessible analyst-manager interactions. The three studies combined contribute to the accounting literature by furthering our understanding of managers’ and analysts’ -
A Case of Corporate Deceit: the Enron Way / 18 (7) 3-38
NEGOTIUM Revista Científica Electrónica Ciencias Gerenciales / Scientific e-journal of Management Science PPX 200502ZU1950/ ISSN 1856-1810 / By Fundación Unamuno / Venezuela / REDALYC, LATINDEX, CLASE, REVENCIT, IN-COM UAB, SERBILUZ / IBT-CCG UNAM, DIALNET, DOAJ, www.jinfo.lub.lu.se Yokohama National University Library / www.scu.edu.au / Google Scholar www.blackboard.ccn.ac.uk / www.rzblx1.uni-regensburg.de / www.bib.umontreal.ca / [+++] Cita / Citation: Amol Gore, Guruprasad Murthy (2011) A CASE OF CORPORATE DECEIT: THE ENRON WAY /www.revistanegotium.org.ve 18 (7) 3-38 A CASE OF CORPORATE DECEIT: THE ENRON WAY EL CASO ENRON. Amol Gore (1) and Guruprasad Murthy (2) VN BRIMS Institute of Research and Management Studies, India Abstract This case documents the evolution of ‘fraud culture’ at Enron Corporation and vividly explicates the downfall of this giant organization that has become a synonym for corporate deceit. The objectives of this case are to illustrate the impact of culture on established, rational management control procedures and emphasize the importance of resolute moral leadership as a crucial qualification for board membership in corporations that shape the society and affect the lives of millions of people. The data collection for this case has included various sources such as key electronic databases as well as secondary data available in the public domain. The case is prepared as an academic or teaching purpose case study that can be utilized to demonstrate the manner in which corruption creeps into an ambitious organization and paralyses the proven management control systems. Since the topic of corporate practices and fraud management is inherently interdisciplinary, the case would benefit candidates of many courses including Operations Management, Strategic Management, Accounting, Business Ethics and Corporate Law. -
Official Versions Vs Facts
1 This text below is inspired by a translation from a French text that was published on the website of Paul Jorion in late June 2017, ie about only 2 weeks after this website would go live. I answered here a very straight question: “how do you differ from the official version?” And here is my “story”, the only one that have conveyed since 2012. It was then meant to summarize how my website differs from all the reports that the bank and the authorities have made on the “London Whale” case. It was 143 pages long for Paul Jorion. Now it is 29 pages long. What I have added are further details on key topics like ‘profits’, like ‘orders’, like ‘valuation’, like ‘mismarking’…. Needless to say, this account vastly differs from any media reporting although some outlets are closer than others. This text below thus predated by a month or so the decisions of the DOJ as disclosed on July 21st 2017. It may well have been the “recent statements and writings” that would shake the tree. It contradicted ahead of times the WSJ subsequent article of August 3rd 2017. Yet it corroborated the statements of Dimon on August 8th 2017 to some extent and clarified ahead of times the context of the ultimate decision of the SEC in late August 2017. But, back in June 2017, this text was also displaying my ‘story’ as an anchor amid all the changing stories that would have been conveyed since 2012 and onwards… In sharp contrast to what all the authorities and the bank would do between 2012 and 2018, I will deploy only one “story” to tell all along, be that on the public stage or confidentially towards the authorities. -
2 Bureaucratic Autonomy: Logic, Theory, and Design 18 2.1 Introduction
Charting a Course to Autonomy: Bureaucratic Politics and the Transformation of Wall Street by Peter Joseph Ryan A dissertation submitted in partial satisfaction of the requirements for the degree of Doctor of Philosophy in Political Science in the GRADUATE DIVISION of the UNIVERSITY OF CALIFORNIA, BERKELEY Committee in charge: Professor Paul Pierson, Chair Professor J. Nicholas Ziegler Professor Neil Fligstein Spring 2013 Charting a Course to Autonomy: Bureaucratic Politics and the Transformation of Wall Street Copyright c 2013 by Peter Joseph Ryan Abstract Charting a Course to Autonomy: Bureaucratic Politics and the Transformation of Wall Street by Peter Joseph Ryan Doctor of Philosophy in Political Science University of California, Berkeley Professor Paul Pierson, Chair Over the past three decades, federal regulators have been at the heart of transformations that have reshaped the financial services industry in the United States and by definition, global markets. It was, for example, the Federal Reserve that initiated and developed risk- based capital standards, rules that are now at the heart of prudential regulation of financial firms across the globe. Federal regulators played a central role in preventing regulation of the emerging ‘over-the-counter’ derivatives market in the late 1980s and early 1990s, actions that later had dramatic consequences during the 2007-2008 financial crisis. The Securities and Exchange Commission took critical decisions regarding the prudential supervision of investment banks, decisions that greatly contributed to the end of the independent invest- ment banking industry in the United States in 2008. Finally regulators played an important role in setting the agenda and shaping the outcomes of the Dodd-Frank Wall Street Reform Act of 2010, the most sweeping and comprehensive piece of legislation affecting the industry since the New Deal. -
Conspiracy of Fools”
Submitted version of review published in GARP Risk Review Review of “Conspiracy of Fools” Joe Pimbley Kurt Eichenwald’s Conspiracy of Fools (Broadway Books, 2005) is a spellbinding account of the rise and fall of Enron. In nearly 700 pages the reader finds answers to “what happened?” and “how did it happen?” Based on retrospective interviews with more than a hundred primary and secondary actors in this drama, the author creates multiple, parallel story lines. He jumps back and forth between these sub-plots in a manner that maintains energy and gives the reader many natural stopping points. The great strengths of Conspiracy are that it’s thorough, extremely well- written, captivating, and, finally, it rings true. The author avoids the easy, simple conclusions that all the executives are “guilty” of crimes or plain greed and that the media-lionized whistle-blower is pure of heart. We see the ultimate outcome as personal tragedies for Jeff Skilling (President) and Ken Lay (CEO) even though they are undeniably culpable. Culpability and guilt are not synonymous, however, and different readers will have widely different judgments to render on these two men. The view of Andrew Fastow is not so murky. He and a handful of his associates did indeed lie, cheat, and steal for personal gain. Fastow’s principle “contribution” to Enron was the creation of structured finance transactions to skirt accounting rules. This one-sentence description doesn’t tell the reader much. Eichenwald gives many examples to flesh out the concept. The story of “Alpine Investors” provides the simplest case. The company wished to sell the Zond Corporation, a wind-farm operator, prior to the closing of Enron’s purchase of Portland General. -
Do You Work in a Creative Industry? in the Digital Age, the Answer Is ‘Yes,’ Whatever Your Profession
Do you work in a creative industry? In the digital age, the answer is ‘yes,’ whatever your profession. All you need to do is understand your potential – and then unlock it. WORDS BY Monisha Rajesh ILLUSTRATIONS BY Malika Favre he digital revolution has “Creativity isn’t restricted to types of profession popped the cork on creativity. – it appears in every discipline,” Dr Root-Bernstein Filmmakers no longer need to continues. “Look at lawyers and accountants. Why rely solely on studios to release did we have the Enron scandal? Why are we their movies when YouTube having these problems with banks? This is people and Vimeo reach an audience of being creative, looking for loopholes and trying millions. Writers can choose traditional publishers, to push boundaries.” or newer options like Amazon and eBooks. In his book, Dr Root-Bernstein describes the Musicians can skip six months in a studio for five creative process as requiring 13 tools that include minutes in a bedroom with a laptop. We have more observing, abstracting, imaging, and kinesthetic outlets for creativity than ever before, but how (i.e. multi-sensory) thinking amongst others. do we harness the tools at our fingertips to make the “Like carpenters’ tools, you have to learn when it’s most of our potential? Does it take a certain type appropriate to use each one,” he says. “Everybody of brain to produce these results, or can we learn has these tools to some degree but none of them are to be creative, no matter what field we work in? taught in any curriculum. -
The Enron Failure and the State of Corporate Disclosure George Benston, Michael Bromwich, Robert E
Following the Moneythe The Enron Failure and the State of Corporate Disclosure George Benston, Michael Bromwich, Robert E. Litan, and Alfred Wagenhofer AEI-Brookings Joint Center for Regulatory Studies 00-0890-FM 1/30/03 9:33 AM Page i Following the Money 00-0890-FM 1/30/03 9:33 AM Page iii Following the Money The Enron Failure and the State of Corporate Disclosure George Benston Michael Bromwich Robert E. Litan Alfred Wagenhofer - Washington, D.C. 00-0890-FM 1/30/03 9:33 AM Page iv Copyright © 2003 by AEI-Brookings Joint Center for Regulatory Studies, the American Enterprise Institute for Public Policy Research, Washington, D.C., and the Brookings Institution, Washington, D.C. All rights reserved. No part of this publication may be used or reproduced in any manner whatsoever without per- mission in writing from the AEI-Brookings Joint Center, except in the case of brief quotations embodied in news articles, critical articles, or reviews. Following the Money may be ordered from: Brookings Institution Press 1775 Massachusetts Avenue, N.W. Washington, D.C. 20036 Tel.: (800) 275-1447 or (202) 797-6258 Fax: (202) 797-6004 www.brookings.edu Library of Congress Cataloging-in-Publication data Following the money : the Enron failure and the state of corporate disclosure / George Benston . [et al.]. p. cm. Includes bibliographical references and index. ISBN 0-8157-0890-4 (cloth : alk. paper) 1. Disclosure in accounting—United States. 2. Corporations—United States—Accounting. 3. Corporations—United States—Auditing. 4. Accounting—Standards—United States. 5. Financial statements—United States. 6. Capital market—United States. -
The Book of Broken Promises:$400 Billion Broadband Scandal
THE BOOK OF BROKEN PROMISES: $400 BILLION BROADBAND SCANDAL & FREE THE NET FOR ERIC LEE, AUNT ETHEL, ARNKUSH, AND THE TEAM Author: Bruce Kushnick, Executive Director New Networks Institute February, 2015 Cover Art: Ferrari Wall Paper1, Broken Skateboard by Pr0totyp2 Disclaimer: AT&T, Verizon and CenturyLink are the progeny of the original AT&T. The AT&T logo is the property of AT&T Inc. and the use has not been authorized, sponsored by, or endorsed by the trademark owner. The Verizon logo is the property of Verizon Communications, Inc, and the use has not been authorized, sponsored by, or endorsed by the trademark owner. The CenturyLink logo is the property of CenturyLink, and the use has not been authorized, sponsored by, or endorsed by the trademark owner. All rights reserved. This book has been prepared by New Networks Institute. All rights reserved. Reproduction or further distribution of this report without written authorization is prohibited by law. For additional copies or information please contact [email protected]. © 1997, 2004, 2015 New Networks Institute The Book of Broken Promises 1 What others have said about Bruce Kushnick’s research and previous books: 3 David Cay Johnston, Recipient of the Pulitzer Prize, Author of The Fine Print, 2012 “Kushnick’s estimate comes from his meticulous analysis of disclosure document filed with the Securities and Exchange Commission and other regulatory agencies… Kushnick’s estimate might significantly understate how much extra money people paid for an electronic highway they did not get. It seems very likely that Kushnick’s numbers are uncomfortably close to the truth.” Dr. -
Online Peer-To-Peer Payments: Paypal Primes the Pump, Will Banks Follow Carl Kaminski
NORTH CAROLINA BANKING INSTITUTE Volume 7 | Issue 1 Article 20 2003 Online Peer-to-Peer Payments: PayPal Primes the Pump, Will Banks Follow Carl Kaminski Follow this and additional works at: http://scholarship.law.unc.edu/ncbi Part of the Banking and Finance Law Commons Recommended Citation Carl Kaminski, Online Peer-to-Peer Payments: PayPal Primes the Pump, Will Banks Follow, 7 N.C. Banking Inst. 375 (2003). Available at: http://scholarship.law.unc.edu/ncbi/vol7/iss1/20 This Comments is brought to you for free and open access by Carolina Law Scholarship Repository. It has been accepted for inclusion in North Carolina Banking Institute by an authorized administrator of Carolina Law Scholarship Repository. For more information, please contact [email protected]. Online Peer-to-Peer Payments: PayPal Primes the Pump, Will Banks Follow? As more businesses and individuals turn to the Internet to buy and sell goods, new peer-to-peer payment systems have developed to make these transactions possible.' A peer-to-peer payment system allows one person or entity to transfer money to another.2 The most common of these payment systems are checks and credit cards, but the growth of Internet commerce and the unique demands of the online marketplace have spurred the development of new Internet payment systems.3 While credit cards are useful for making purchases from online merchants, individuals and many small businesses cannot accept credit card payments.4 Checks are not useful in the online market place where buyers and sellers are often unable to determine the reliability or even the identity of each other.5 Making payments by check often causes delays as shipments are held up until a check clears.6 Therefore, a market for Internet peer-to-peer payment systems that are convenient, fast, reliable and safe has emerged Online auctions, in particular the online auction giant eBay, Inc. -
Letter from Berlin
LETTER FROM BERLIN THE MAGAZINE OF INTERNATIONAL ECONOMIC POLICY 220 I Street, N.E., Suite 200 Washington, D.C. 20002 202-861-0791 www.international-economy.com Germany’s Wirecard Scandal [email protected] The largest accounting fraud in the country’s postwar history. By Klaus C. Engelen hile all of Europe broke. When Wirecard took the place of the world electronic payment trans- is still in the grip of Commerzbank AG in the DAX in action services as well as the issuing of of the worst pan- September 2018, the fintech’s shares physical cards. According to its promo- demic in a century, were worth about €20 billion. tion material, Wirecard authorized and Germany’s po- Its Austrian CEO Markus Braun, processed payments for about 280,000 Wlitical and financial establishments are who owned 7 percent of Wirecard, merchants, issued credit and prepaid also haunted by the Wirecard AG scan- was a billionaire. Now Braun (51) is in cards, and provided technology for dal. It is turning out to be the largest detention awaiting trial with two other contactless smartphone payments. case of accounting fraud in the coun- company executives. His second-in- Clients included German discounters try’s post-war history. The sad story is command Jan Marsalek (40), also Aldi and Lidl as well as nearly one that most of the political and financial Austrian, who was in charge of the hundred airlines. Since January 2006, establishments at all levels aided and company’s Asian business, has van- the group included a bank with a full abetted the mega-fraud. -
The Financial Collapse of the Enron Corporation and Its Impact in the United States Capital Market by Prof
Global Journal of Management and Business Research: D Accounting and Auditing Volume 14 Issue 4 Version 1.0 Year 2014 Type: Double Blind Peer Reviewed International Research Journal Publisher: Global Journals Inc. (USA) Online ISSN: 2249-4588 & Print ISSN: 0975-5853 The Financial Collapse of the Enron Corporation and Its Impact in the United States Capital Market By Prof. Edel Lemus, M.I.B.A Carlos Albizu University, U nited States Abstract- The purpose of this article is to review the collapse of the Enron Corporation and the collapse’s effect on the United States financial market. Enron Corporation, the seventh largest company in the United States, misguided its shareholders by reporting $74 billion profit of which $43 billion was detected as fraud. Moreover, according to the association of fraud examiners $2.9 trillion was lost because of employee fraud. For example, as presented by Kieso, Weygandt, and Warfield (2013), in a global survey study that was conducted in 2013, it was reported that 3,000 executives from 54 countries were involved in fraudulent financial reporting. Therefore, the world of accounting is dominated by the top four accounting firms known as (1). PricewaterhouseCoopers (PwC), (2). Deloitte & Touche (DT), (3). Ernst & Young (EY) and (4). KPMG which represent a combined income of $80 billion. Keywords: enron corporation, bankruptcy, securities and exchange commission (sec), generally accepted accounting principles (gaap), sarbanes-oxley act of 2002, section 404, corporate governance, auditing, and economic crime. GJMBR-D Classification : JEL Code: M49 TheFinancialCollapseoftheEnronCorporationand Its ImpactintheUnitedStatesCapitalMarket Strictly as per the compliance and regulations of: © 2014. Prof. Edel Lemus. -
Lifting the Veil of Sarbanes-Oxley
LIFTING THE VEIL OF SARBANES -OXLEY REVELATIONS THROUGH DECEMBER 1, 2002 By ∗ Byron F. Egan, Dallas, TX Sabrina A. McTopy, Houston, TX On July 30, 2002 President Bush signed the Sarbanes -Oxley Act of 2002 (H.R. 3763) (the “SOB ”) intended to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws. This is the “tough new corporate fraud SOB” being trumpeted by the politicians and in the media. Among other things, the SOB amends the Securities Exchange Act of 1934 (the “ 1934 Act ”) and the Securities Act of 1933 (the “ 1933 Act ”). Although the SOB does have some specific provisions, and generally establishes some important public policy changes, it will be implemented in large part through rules t o be adopted by the Securities and Exchange Commission ( “SEC” ) in various designated periods of time after July 30, 2002 – generally, 30 days (August 29, 2002), 180 days (January 26, 2003) and 270 days (April 26, 2003). As is always the case with broad gr ants of authority to a regulatory body, the rules may well contain some surprises. Further, the SEC will have opportunity through rulemaking under the SOB, as well as action on corporate governance proposals of the stock exchanges, to delve much farther i nto corporate governance than it has in the past. SUMMARY To What Companies Does SOB Apply . The SOB is generally applicable to all companies required to file reports with the SEC under the 1934 Act (“ reporting companies ”) or that have a registration state ment on file with the SEC under the 1933 Act, in each case regardless of size (collectively “ public companies ”).