Contact: Maridith Geuder
Noel D. Addy Jr.
In an inaugural Accounting Research Consortium hosted last week by Mississippi State, accounting professors and doctoral students from three of the region's universities examined some of the most pressing themes in today's economy and heard from a distinguished speaker.
Participants from MSU, as well as the universities of Memphis and Mississippi, dealt with some of the latest issues in corporate strategies and responsibility.
Noel D. Addy Jr., associate professor of accounting and coordinator of the event, said corporate responsibility was among the issues discussed. Specifically, he added: "Was the corporate responsibility act--Sarbanes-Oxley Act--a piece of groundbreaking legislation or another bureaucratic yawn to investors? In a volatile economy, how good are the available tools to detect whether management has fudged on the income statement? To what extent does management integrity affect the way auditors investigate financial statements?"
In addition to discussion of these and other issues, 35 participants heard a keynote presentation by William M. Cready, Thomas H. Daigre Endowed Chair of Business Administration at Louisiana State University.
"Dr. Cready outlined board of director strategies for compensating chief executives in the presence of corporate restructuring and layoffs," Addy said.
"Reporting a loss because the company is being restructured hurts executive cash bonuses, but the restructuring may be required for the long-term good of the company. The top executives can face a tough choice between acting for their own short-term benefit or for the long-term good of the company," he explained.
Cready presented another alternative: tying long-term health of a company to compensation such as stock options that pay off in the long term.
"The implications are that executives may be paid in ways that tie their compensation to their vision," Addy said. "If they have a vision of the short run, their pay is decided based on short-term performance measures."
The converse also is true, he added. "If they have a vision of the long run, then their compensation is tied to long-run outcomes."
The consortium, which is expected to be repeated annually, encourages the leveraging of research power across a number of universities to investigate major economic themes, Addy said.
For more information about the Accounting Research Consortium, contact Noel Addy at (662) 325-1644.