ACC 6973 May 2009 Archival-Based Research Methods in Accounting Venue BB.302.18 from 8:00 to 10:50 May 11th – May 30th (M-F) Learning Objective/Purpose of the Course Examination of quasi-experimental research designs and methods as used in archival- based accounting research. Provides students the opportunity to develop a foundation for performing research related to PhD seminar project, academic research and scholarly papers. Includes partial or complete replications of published archival-based research papers Required Texts Delwiche, L. and S. Slaughter. 2003. The Little SAS Book. (3rd Ed.) Cody, R. 2005. The SAS Workbook Recommended Resources SAS Language and Procedures SAS 9.1.3 Language Reference: Concepts SAS 9.1.3 Language Reference: Dictionary Base SAS 9.1.3 Procedures Guide SAS/IML Grading Class participation (possibly including an exam) – 25% Term paper & paper presentation – 75% Term Project You will choose a paper positioned within a literature stream of interest to you. You will prepare a two-part term project. The first part of the project is a comprehensive review of your chosen literature stream, culminating in a discussion of currently unanswered questions that might be addressed by future research (one of these questions potentially could form the basis of your second year summer paper). Ten page maximum. Your discussion should primarily focus on the "stories" within this literature stream (i.e., the theories and related conceptual constructs that underpin the literature). The second part of your project will constitute a complete replication of one of the papers within your chosen literature stream. You will present the replication results to class participants (and interested faculty) as though the study were your own. In lieu of the replication, you may choose to undertake independent research if you prefer. The latter route will be much more challenging but will place you on the path toward developing a piece of independent research that can evolve into your dissertation or comprise a stand-alone paper that potentially could be published before graduation. Deliverables – Replication Route Deliverable * Due date Draft of your literature review paper and complete Monday, 6/1 citation of three papers that you would like to replicate (I will approve one). SAS output of data descriptive statistics. Friday, 6/19 SAS output of your analysis. Monday, 7/6 Powerpoint file containing draft copies of your slides Monday, 7/27. and tables. Present replication results to class and interested faculty Early August . * - all deliverables to be submitted via email. SAS output to be provided in pdf format. Deliverables – Independent Research Route Deliverable * Due date One page summary of proposed term paper topic. Friday 5/15 (end of first week). Two to three page introduction to term paper (Section 1) Due Friday 5/22. that succinctly describes the purpose and the Deliverables – Independent Research Route Deliverable * Due date contribution of your study. Your Section 1 should be similar in structure and content to the introduction of papers published in The Accounting Review. Two to five page discussion of your theory/hypotheses Due Friday 5/29. or story/research questions (Section 2). Your Section 2 should be similar in structure and content to the theory and hypothesis section of papers published in The Accounting Review. Two to five page discussion of your research design Due Friday 6/5. (Section 3). Your Section 3 should be similar in structure and content to the corresponding section of papers published in The Accounting Review. Table 1 of your paper entitled “Table 1 – Definition of Variables.” One page discussion of your sample selection criteria Due date will be decided in and discussion of the descriptive statistics of your data consultation with me (Section 4). Your Section 4 should be similar in depending upon whether you structure and content to the corresponding section of must hand-collect data. papers published in The Accounting Review Table 2 of your paper entitled “Table 2 – Sample Selection.” Table 3 of your paper entitled “Table 3 –Descriptive Due two weeks after Section 4 Statistics.” is due. Table 4 of your paper entitled “Table 4 – Regression Analysis of xxx.” where xxx is an appropriately descriptive title of your choosing. Table 5 of your paper entitled “Table 5 – Sensitivity Due one week after Table 4 is Analysis.” due. Three to five page discussion of the results of your Due one week after Table 5 is analysis (Section 5). Section 5 should be similar to the due. corresponding section of papers published in The Accounting Review. One page statement of your conclusions (Section 6). Due one week after Section 5 Deliverables – Independent Research Route Deliverable * Due date is due. * - all deliverables to be submitted via email. SAS output to be provided in pdf format. Class Activities Topic Activity 1. Develop basic SAS skills Before class: You will complete the assignments in the Cody workbook on your own before May 12th. In class: We will discuss assignments that gave you particular difficulty. Please send me an email by 8:00 PM Sunday May 10th identifying the problems you’d like to cover in class Monday May 11th. 2. Develop a basic understanding of the Before class: Peruse the WRDS website. Focus in particular on Compustat, CRSP, data resources available to you via WRDS. IBES, and Audit Analytics. In class: We'll discuss these databases in class. 3. Working with Compustat-- Abnormal Before class: Read Jones, K., G. Krishnan, and K. Melendrez. 2008. Do models of accrual models. discretionary accruals detect actual cases of fraudulent and restated earnings? Contemporary Accounting Research. 25(2): 499-531. In class: I will ask you to explain how abnormal accrual models “work,” the variation in specifications used, the power of the models, and the factors that threaten the validity of the models. In class: We will estimate models 1-8 in Jones et al. for the period 1998-2001 and compare your results to those reported in Jones et al. Table 4. Topic Activity 4. Working with Audit Analytics and Before class: Read Payne, J. 2008. The influence of audit firm specialization on IBES analysts' forecast errors. Auditing: A Journal of Theory & Practice. 27(2): 109-136. In class: We will discuss the paper. In class: We will replicate portions of the paper. 5. Working with Execucomp & CRSP Before class: Read Banker, R, H. Huang, and R. Natarajan. 2009. Incentive contracting and value relevance of earnings and cash flows. Journal of Accounting Research. 47(3): 647-678. In class: We will discuss the paper. In class: We will replicate portions of the paper.