Opportunistic Financial Reporting in Higher Education

Annual university rankings produced by mainstream sources, such as U.S. News and World Report, are very popular and viewed as important by a variety of university stakeholders. Consequently, universities expend a great deal of effort in an attempt to ensure they appear in the best possible light. One major component of these ranking systems is the Carnegie Classification of Institutions of Higher Education, which is partly based on the research expenditures reported by the university. This system provides incentives for administrators at institutions of higher education to make strategic accounting choices, with respect to the classification of research expenditures, to improve the prestige of the university. I first measure the amount of accounting discretion within a university's classification of research expenditures and then test whether discretionary research expenditures impact the prestige of a university. Results indicate that discretionary research expenditures are positively associated with university prestige. Specifically, universities within my sample that have positive discretionary research expenditures have an increased probability of subsequently being classified as a Doctoral University with moderate to high research activity by 5% and 7% respectively. In addition, universities within my sample that had positive discretionary research expenditures experienced increases in their ranking of federal funding received relative to other universities by an average of 20.4 positions. These results are consistent with the concept that universities can make certain discretionary accounting choices which can help improve the prestige of the institution with the goal of obtaining additional sources of funding.

Name thesis:degree_name

Ph. D.

Level thesis:degree_level

doctoral

Discipline thesis:degree_discipline

Accounting and Information Systems

Department dc:contributor.department

Accounting and Information Systems

Grantor dc:publisher

Virginia Tech

Year dc:date.issued

2017

Author dc:creator

• Henke, Trent Stanton

Chair dc:contributor.committeechair

• Maher, John J.

Committee members dc:contributor.committeemember

• Johnson, Eugene Scott
• Easterwood, John C.
• Beyer, Brooke D.
• Hansen, Thomas Bowe

• Opportunistic Financial Reporting
• Earnings Management
• Education, Higher
• University Prestige

Statement dc:rights

• In Copyright

Licence dc:rights.uri

• http://rightsstatements.org/vocab/InC/1.0/

Dc Identifier Other

vt_gsexam:11046

OAI identifier oai:identifier

oai:vtechworks.lib.vt.edu:10919/77587