Gary J. Colbert and E. Woodrow Eckard
Journal of Sports Economics, Vol. 16. Issue 4, 335-352
We use a data set of Football Bowl Subdivision (Division-IA) universities to investigate the hypothesis that higher coach pay leads to improved team performance. Our analysis finds that pay and team performance are positively correlated and that, when schools change coaches, higher pay is associated with improved performance. The evidence suggests that additional rating points are increasingly valuable, perhaps over US$1 million for top teams. Our descriptive analysis reveals the median 2011 head coach pay of US$1.2 million, significant increases over our 2006-2011 study period, and large disparities among schools and conferences. We conclude that administrators perceive highly ranked football teams have significant value.
Gary J. Colbert and Dennis F. Murray
Accounting and the Public Interest, Volume 13, Issue 1, pp. 85-104
All states in the U.S. regulate the practice of public accounting. An important part of the regulatory apparatus is the state accountancy board (SAB). SABs implement the laws that govern public accounting. State societies of CPAs (SSCPAs), in contrast, are advocacy mechanisms that can potentially be used by members of the profession to achieve their regulatory objectives. Economic theory raises the possibility that regulatory bodies such as SABs might be captured by the profession that they regulate. We examine the composition of SABs and find that the majority of members are CPAs. A survey of CPA SAB members reveals that nearly one-third of the respondents are past leaders of their SSCPAs. We further find that the percentage of board members who are CPAs and the percentage of our respondents who are past leaders of their SSCPAs are positively associated with the rapidity with which states adopt two important accountancy laws (interstate mobility and the 150-hour education requirement) that can be viewed as being in the best interest of the profession. These findings support the hypothesis of regulatory capture and suggest that states may benefit from reconsidering the qualifications of SAB members.
Colbert, Gary, Murray, Dennis and Nieschwietz, Robert.
Journal of Finance and Accountancy, Volume 4, pp. 1-13.
This study investigates whether the usefulness of expected values to financial statement users depends on portfolio size (N). Given that standard setting boards require some liabilities to be measured at fair value, and given that fair values are often estimated using expected cash flows, the investigation is conducted within the context of liabilities. Expected value is hypothesized to be more useful when N is large because actual cash flow realizations are more centered on their expected value than when N is small. That is, because users will perceive that expected values are more accurate predictors of actual realizations when N is large, valuations assigned to liabilities will be closer to their expected values than when N is small. The results show that when N is large, the valuations assigned by subjects to liabilities are much closer to the expected value of the future cash outflows than when N is small, but users’ perceptions of the accuracy of expected values did not appear to influence their valuations. These results suggest that standard setters should give consideration to the effect of portfolio size on the use of expected value in financial reporting.
Colbert, Gary, Murray, Dennis, and Nieschwietz, Robert
Journal of Risk Research Vol. 12, Issue 2, p. 199-208
Previous research has examined the extent to which decisions made in binary choice situations are consistent with expected value. Li (2003) reports that decisions in multiple-play gambles are well explained by expected value, while single-play gambles are not consistent with expected value. The present study extends previous work by examining the use of expected value in the pricing of gambles. The results show that subjects’ pricing decisions are much more consistent with expected value in multiple-play situations than in single-play situations, particularly when the subjects are provided with a simple decision aid (i.e. a very brief description of expected value and the calculated amount of the expected value). Additionally, substantially fewer subjects in our study made decisions consistent with expected value than in Li’s (2003) study, suggesting that binary choice studies may overstate the extent of expected value usage.
Colbert, Gary, Murray, Dennis, and Nieschwietz, Robert
Journal of Applied Business Research Vol. 24, Issue 4, p. 113-124
Recent archival studies have examined the association between auditor independence and non-audit services. The results of these studies suggest that fees for non-audit services are not associated with indicators of auditor independence in fact whereas these fees are associated with financial statement users’ perceptions of auditor independence (i.e., independence in appearance). The present study attempts to reconcile these conflicting findings by using a behavioral research methodology that provides greater control over the independent variables and measures more directly financial statement users’ perceptions. Our results indicate that fees for financial information systems development services do not affect perceptions of auditor independence, whereas, fees for tax services adversely affect perceptions of independence. Overall, the results provide mixed support for the recent Securities and Exchange Commission policy changes on auditor independence.
Colbert, G. Murray, D. Reed, R.
Journal of Applied Business Research, Vol. 24 Issue 1, p. 65-74
This article intends to inform and influence current practice in accountancy regulation.