The Influence Of Public Equity Ownership On Earnings Management Through The Manipulation Of Operational Activities

This paper examines whether public equity firms and private equity firms with public debt exhibit different degrees of real earnings management, defined as the manipulation of operational activities in order to influence reported earnings. Public equity firms face intense capital market scrutiny that their private equity counterparts do not. Therefore, this study’s comparison of the two types of firms provides insight on the impact of capital market pressure on real earnings management behaviors. My results show that public equity firms are more likely than private equity firms to opportunistically alter normal operations to improve earnings by pushing sales through discounts and promotions, and by lowering costs of sales through overproduction. I find no difference in abnormal discretionary expenses between public equity and private equity firms. Although private equity firms with public debt do not face the same capital market pressure that public equity firms face, they are not immune from incentives to engage in real earnings management. Specifically, I find that private equity firms with public debt engage in real earnings management as their debt moves closer to default. Moreover, private equity firms with public debt that do engage in real earnings management appear to emphasize the zero earnings benchmark, consistent with prior research, suggesting that this benchmark is of primary importance to creditors

THE INFLUENCE OF PUBLIC EQUITY OWNERSHIP ON EARNINGS MANAGEMENT THROUGH THE MANIPULATION OF OPERATIONAL ACTIVITIES

This paper examines whether public equity firms and private equity firms with public debt exhibit different degrees of real earnings management, defined as the manipulation of operational activities in order to influence reported earnings. Public equity firms face intense capital market scrutiny that their private equity counterparts do not. Therefore, this study's comparison of the two types of firms provides insight on the impact of capital market pressure on real earnings management behaviors. The impact of capital market pressure is not clear ex ante. On the one hand, the scrutiny associated with the public equity markets may play a disciplining role that leads firms to refrain from activities that distort reported earnings. On the other hand, the penalties faced by public equity firms that fail to meet earnings benchmarks may put additional pressure on top managers to report positive and improved earnings and hence, may lead to greater distortion of reported earnings through the manipulation of operational activities. Consistent with the latter possibility, I find that public equity firms are more likely than private equity firms to opportunistically alter normal operations to improve earnings by cutting R&D spending, by pushing sales through discounts and promotions, and by lowering costs of sales through overproduction. I find no difference in abnormal discretionary expenses between public equity and private equity firms. Although private equity firms with public debt do not face the same capital market pressure that public equity firms face, they are not immune from incentives to engage in real earnings management. Specifically, I find that private equity firms with public debt engage in a greater degree of real earnings management as their debt moves closer to default. Given that debt claims become more like equity claims as a firm's debt moves closer to default, this finding suggests that public debtholders exert similar pressure to public equity holders when their claims become more equity-like. Moreover, private equity firms with public debt that do engage in real earnings management appear to emphasize the zero earnings benchmark, consistent with prior research, suggesting that this benchmark is of primary importance to creditors. In addition, I assess the performance implications of capital market-induced real earnings management, by examining its association with one-year ahead industry-adjusted return on assets (ROA). I find that public equity firms that just meet earnings benchmarks while altering real operating activities suffer from lower future industry-adjusted ROA than private equity firms that just meet earnings benchmarks while altering real operating activities. The finding for the public equity firms validates concerns that operating decisions made in response to capital market pressure may negatively impact future firm performance. On the other hand, the results for private equity firms indicate that alterations of operating activities made in the absence of capital market pressure are more likely to be strategically sound

The Moderating Effect Of Product Market Competition In The Relationship Between Advertising Expenditures And Sales

While the relationship between advertising expenditures and sales has been much discussed, whether product market competition affects their relationship has been little examined. We address this question by analyzing the financial performance data of 6,018 companies for 14 years (1997-2011). Our data analysis supports two hypotheses that (1) increasing advertising expenditures increase sales in the subsequent year and that (2) this effect is stronger when the product market competition is high than when it is low. Our findings advance the academic understanding of advertising effect as well as provide practical implications to advertising managers

Properties Of Management Forecast And Analysts' Responsiveness

This paper examines the degree of analysts’ responsiveness to voluntary management guidance. Prior studies report that the management guidance is informative and influential (e.g. Baginski et al., 1993). This paper studies various factors that trigger equity market reactions around the management forecast issuance date and find that analysts are more reactive to new information contained in management guidance when the guidance conveys information that affects the stock market. The extent of the analysts’ reaction to management guidance increases when the analysts find that the guidance is more credible. Credibility of management guidance from the standpoint of analysts means ex-post accuracy of the earnings estimate by the management. The direction and the magnitude of earnings forecast revisions are influenced by the assessment of the credibility of management earnings forecast by financial analysts

PCT-CycleGAN: Paired Complementary Temporal Cycle-Consistent Adversarial Networks for Radar-Based Precipitation Nowcasting

The precipitation nowcasting methods have been elaborated over the centuries because rain has a crucial impact on human life. Not only quantitative precipitation forecast (QPF) models and convolutional long short-term memory (ConvLSTM), but also various sophisticated methods such as the latest MetNet-2 are emerging. In this paper, we propose a paired complementary temporal cycle-consistent adversarial networks (PCT-CycleGAN) for radar-based precipitation nowcasting, inspired by cycle-consistent adversarial networks (CycleGAN), which shows strong performance in image-to-image translation. PCT-CycleGAN generates temporal causality using two generator networks with forward and backward temporal dynamics in paired complementary cycles. Each generator network learns a huge number of one-to-one mappings about time-dependent radar-based precipitation data to approximate a mapping function representing the temporal dynamics in each direction. To create robust temporal causality between paired complementary cycles, novel connection loss is proposed. And torrential loss to cover exceptional heavy rain events is also proposed. The generator network learning forward temporal dynamics in PCT-CycleGAN generates radar-based precipitation data 10 minutes from the current time. Also, it provides a reliable prediction of up to 2 hours with iterative forecasting. The superiority of PCT-CycleGAN is demonstrated through qualitative and quantitative comparisons with several previous methods.Comment: CIKM 202

Fabrication of monodisperse silica–polymer core–shell nanoparticles with excellent antimicrobial efficacy

Monodisperse nanoparticles with antimicrobial polymer shells were fabricated using a seeded copolymerization; they exhibited excellent antibacterial activities against gram-positive bacteria as well as gram-negative bacteria.This work was supported by a grant from the Fundamental R&D Program for Core Technology of Materials funded by the Ministry of Knowledge Economy, Republic of Korea

Dynamics of Social Influence on New Employees’ Use of Volitional IS: m-EHR Case in Hospital Setting

It is widely recognized that user resistance to Information Systems (IS) is particularly high in hospitals. In this regard, the future of mobile Electronic Health Record (m-EHR) systems is highly in question, mainly because their usage is not mandatory. Aiming to provide insights on how best to promote the use of m-EHR in hospitals, we investigate the effect of social influences on m-EHR usage by new doctors who recently began working at a hospital. Drawing upon the concept of organizational socialization and social influences, we hypothesize that coworkers’ m-EHR usage is positively associated with one by new doctors, and the strength of this association varies by the coworkers’ type of usage, by the hierarchical rankings of coworkers, and by the stage of socialization process in which the new doctors are situated. Our analyses using longitudinal m-EHR usage data (595,914 logs of 737 doctors) generally support our hypotheses

Arsenite exposure suppresses adipogenesis, mitochondrial biogenesis and thermogenesis via autophagy inhibition in brown adipose tissue

Arsenite, a trivalent form of arsenic, is an element that occurs naturally in the environment. Humans are exposed to high dose of arsenite through consuming arsenite-contaminated drinking water and food, and the arsenite can accumulate in the human tissues. Arsenite induces oxidative stress, which is linked to metabolic disorders such as obesity and diabetes. Brown adipocytes dissipating energy as heat have emerging roles for obesity treatment and prevention. therefore, understanding the pathophysiological role of brown adipocytes can provide effective strategies delineating the link between arsenite exposure and metabolic disorders. Our study revealed that arsenite significantly reduced differentiation of murine brown adipocytes and mitochondrial biogenesis and respiration, leading to attenuated thermogenesis via decreasing UCP1 expression. Oral administration of arsenite in mice resulted in heavy accumulation in brown adipose tissue and suppression of lipogenesis, mitochondrial biogenesis and thermogenesis.Mechanistically, arsenite exposure significantly inhibited autophagy necessary for homeostasis of brown adipose tissue through suppression of Sestrin2 and ULK1. These results clearly confirm the emerging mechanisms underlying the implications of arsenite exposure in metabolic disorders

Damage control resuscitation in children

Damage control resuscitation is a relatively new resuscitative strategy for patients with severe traumatic hemorrhage. This strategy consists of permissive hypotension and early balanced transfusion, and transfers the patients to subsequent surgery. There is growing evidence on harms of excessive fluids. Since 2013, survival benefit of massive transfusion protocol has been proven in adults. Despite insufficient evidence, pediatric massive transfusion protocols are widely used in North American trauma centers. This review focuses on the concept of damage control resuscitation, and summarizes the relevant pediatric evidence

Autophagy in Adipocyte Browning: Emerging Drug Target for Intervention in Obesity

Autophagy, lipophagy, and mitophagy are considered to be the major recycling processes for protein aggregates, excess fat, and damaged mitochondria in adipose tissues in response to nutrient status-associated stress, oxidative stress, and genotoxic stress in the human body. Obesity with increased body weight is often associated with white adipose tissue (WAT) hypertrophy and hyperplasia and/or beige/brown adipose tissue atrophy and aplasia, which significantly contribute to the imbalance in lipid metabolism, adipocytokine secretion, free fatty acid release, and mitochondria function. In recent studies, hyperactive autophagy in WAT was observed in obese and diabetic patients, and inhibition of adipose autophagy through targeted deletion of autophagy genes in mice improved anti-obesity phenotypes. In addition, active mitochondria clearance through activation of autophagy was required for beige/brown fat whitening – that is, conversion to white fat. However, inhibition of autophagy seemed detrimental in hypermetabolic conditions such as hepatic steatosis, atherosclerosis, thermal injury, sepsis, and cachexia through an increase in free fatty acid and glycerol release from WAT. The emerging concept of white fat browning–conversion to beige/brown fat– has been controversial in its anti-obesity effect through facilitation of weight loss and improving metabolic health. Thus, proper regulation of autophagy activity fit to an individual metabolic profile is necessary to ensure balance in adipose tissue metabolism and function, and to further prevent metabolic disorders such as obesity and diabetes. In this review, we summarize the effect of autophagy in adipose tissue browning in the context of obesity prevention and its potential as a promising target for the development of anti-obesity drugs