Edward B. Douthett
- Courses7
- Reviews43
- School: George Mason University
- Campus:
- Department: Accounting
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Location:
4400 University Dr
Fairfax, VA - 22030 - Dates at George Mason University: May 2007 - May 2019
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Biography
George Mason University - Accounting
Northern Chapter VSCPA Professor of Public Accounting
Edward
Douthett
I enjoy teaching at the collegiate level and conducting academic research on accounting and finance topics.
Experience
George Mason University
Associate Professor of Accounting, Northern Chapter VSCPA Professor of Public Accounting
Teaching managerial accounting; conducting research on the effects of accounting and auditing in domestic and international capital markets.
Education
Pennsylvania State University
BS
Accounting
University of Georgia
MBA and PhD
Accounting
Publications
Venture capital and risk management: Evidence from initial public offerings
Journal of Managerial Issues, 25 (3):220-240
This study analyzes a sample of initial public offerings (IPOs) to examine the sources of firm-specific risk associated with investment by venture capitalists. The results indicate that IPO backing by venture capitalists is associated with risk factors related to operating profit margins and ongoing sales generation, but not operational financing. The results also indicate that venture-backed IPOs are associated with greater reductions in firm-specific risk over the course of a year that includes the date of the IPO. In sum, the findings suggest venture capitalists are willing to accept higher levels of risk in those instances where they might have an advantage in terms of managerial skill or are able to reduce firm-specific risk subsequent to investment in order to maximize returns when they cash out. The study also makes use of proxies that are representative of the ex-ante nature of firm-specific risk at the time of a new issue.
Venture capital and risk management: Evidence from initial public offerings
Journal of Managerial Issues, 25 (3):220-240
This study analyzes a sample of initial public offerings (IPOs) to examine the sources of firm-specific risk associated with investment by venture capitalists. The results indicate that IPO backing by venture capitalists is associated with risk factors related to operating profit margins and ongoing sales generation, but not operational financing. The results also indicate that venture-backed IPOs are associated with greater reductions in firm-specific risk over the course of a year that includes the date of the IPO. In sum, the findings suggest venture capitalists are willing to accept higher levels of risk in those instances where they might have an advantage in terms of managerial skill or are able to reduce firm-specific risk subsequent to investment in order to maximize returns when they cash out. The study also makes use of proxies that are representative of the ex-ante nature of firm-specific risk at the time of a new issue.
Are assurance services provided by auditors on initial public offerings influenced by market conditions?
Contemporary Accounting Research, 26 (2):453-476
The initial public offering (IPO) market is characterized by large, periodic swings in new issue volume, commonly referred to as hot and cold markets. We compare IPO assurance fees over these cycles controlling for factors that are potentially associated with hot IPO markets. We find that average assurance fees are lower during hot market periods and that fee coefficients associated with certain client- and IPO-specific attributes are lower during hot markets. Our results are consistent with the explanation that IPO assurance services are influenced by varying client demands to defer or accelerate the date of the new issue in order to capitalize on market conditions.
Venture capital and risk management: Evidence from initial public offerings
Journal of Managerial Issues, 25 (3):220-240
This study analyzes a sample of initial public offerings (IPOs) to examine the sources of firm-specific risk associated with investment by venture capitalists. The results indicate that IPO backing by venture capitalists is associated with risk factors related to operating profit margins and ongoing sales generation, but not operational financing. The results also indicate that venture-backed IPOs are associated with greater reductions in firm-specific risk over the course of a year that includes the date of the IPO. In sum, the findings suggest venture capitalists are willing to accept higher levels of risk in those instances where they might have an advantage in terms of managerial skill or are able to reduce firm-specific risk subsequent to investment in order to maximize returns when they cash out. The study also makes use of proxies that are representative of the ex-ante nature of firm-specific risk at the time of a new issue.
Are assurance services provided by auditors on initial public offerings influenced by market conditions?
Contemporary Accounting Research, 26 (2):453-476
The initial public offering (IPO) market is characterized by large, periodic swings in new issue volume, commonly referred to as hot and cold markets. We compare IPO assurance fees over these cycles controlling for factors that are potentially associated with hot IPO markets. We find that average assurance fees are lower during hot market periods and that fee coefficients associated with certain client- and IPO-specific attributes are lower during hot markets. Our results are consistent with the explanation that IPO assurance services are influenced by varying client demands to defer or accelerate the date of the new issue in order to capitalize on market conditions.
Client importance and audit partner independence
Journal of Accounting and Public Policy, 31 (3):320-336
We use data from Taiwan where audit partners are required to sign audit reports to examine whether audit partners compromise their independence for economically important clients. Uniquely, we include both listed and unlisted clients in audit partners’ client portfolios and separately study these clients for Big N and non-Big N auditors. We employ multiple proxies for auditor independence, including various abnormal accruals measures, the propensity of audit partners to issue modified audit opinions, and the probability that clients meet or just beat earnings targets. We fail to find evidence that Big N audit partners compromise their independence for economically important clients; however, we find such evidence for non-Big N auditors. Our results are robust to a battery of sensitivity analyses. While our inferences are limited to the Taiwanese capital market, our study may be of interest to market participants and regulators in other well developed capital markets.
Venture capital and risk management: Evidence from initial public offerings
Journal of Managerial Issues, 25 (3):220-240
This study analyzes a sample of initial public offerings (IPOs) to examine the sources of firm-specific risk associated with investment by venture capitalists. The results indicate that IPO backing by venture capitalists is associated with risk factors related to operating profit margins and ongoing sales generation, but not operational financing. The results also indicate that venture-backed IPOs are associated with greater reductions in firm-specific risk over the course of a year that includes the date of the IPO. In sum, the findings suggest venture capitalists are willing to accept higher levels of risk in those instances where they might have an advantage in terms of managerial skill or are able to reduce firm-specific risk subsequent to investment in order to maximize returns when they cash out. The study also makes use of proxies that are representative of the ex-ante nature of firm-specific risk at the time of a new issue.
Are assurance services provided by auditors on initial public offerings influenced by market conditions?
Contemporary Accounting Research, 26 (2):453-476
The initial public offering (IPO) market is characterized by large, periodic swings in new issue volume, commonly referred to as hot and cold markets. We compare IPO assurance fees over these cycles controlling for factors that are potentially associated with hot IPO markets. We find that average assurance fees are lower during hot market periods and that fee coefficients associated with certain client- and IPO-specific attributes are lower during hot markets. Our results are consistent with the explanation that IPO assurance services are influenced by varying client demands to defer or accelerate the date of the new issue in order to capitalize on market conditions.
Client importance and audit partner independence
Journal of Accounting and Public Policy, 31 (3):320-336
We use data from Taiwan where audit partners are required to sign audit reports to examine whether audit partners compromise their independence for economically important clients. Uniquely, we include both listed and unlisted clients in audit partners’ client portfolios and separately study these clients for Big N and non-Big N auditors. We employ multiple proxies for auditor independence, including various abnormal accruals measures, the propensity of audit partners to issue modified audit opinions, and the probability that clients meet or just beat earnings targets. We fail to find evidence that Big N audit partners compromise their independence for economically important clients; however, we find such evidence for non-Big N auditors. Our results are robust to a battery of sensitivity analyses. While our inferences are limited to the Taiwanese capital market, our study may be of interest to market participants and regulators in other well developed capital markets.
Are governmental accounting measures value relevant to the citizenry?
Journal of Public Budgeting, Accounting & Financial Management, 26(4):585-613.
We examine the relevance of governmental accounting information to the citizenry by analyzing the association between various financial and non-financial measures of local government performance and residential property values. The link between government performance measures and residential property values is based on a model of housing value capitalization developed by Yinger (1982). Using a model of firstdifferences, we find that changes in housing values are associated with government financial measures, including reported surplus and changes in outstanding debt. Further, we find that changes in housing values are also associated with non-financial measures of performance by county schools. Overall our results suggest that both financial and non-financial government performance measures are economically relevant to citizen property owners.
Venture capital and risk management: Evidence from initial public offerings
Journal of Managerial Issues, 25 (3):220-240
This study analyzes a sample of initial public offerings (IPOs) to examine the sources of firm-specific risk associated with investment by venture capitalists. The results indicate that IPO backing by venture capitalists is associated with risk factors related to operating profit margins and ongoing sales generation, but not operational financing. The results also indicate that venture-backed IPOs are associated with greater reductions in firm-specific risk over the course of a year that includes the date of the IPO. In sum, the findings suggest venture capitalists are willing to accept higher levels of risk in those instances where they might have an advantage in terms of managerial skill or are able to reduce firm-specific risk subsequent to investment in order to maximize returns when they cash out. The study also makes use of proxies that are representative of the ex-ante nature of firm-specific risk at the time of a new issue.
Are assurance services provided by auditors on initial public offerings influenced by market conditions?
Contemporary Accounting Research, 26 (2):453-476
The initial public offering (IPO) market is characterized by large, periodic swings in new issue volume, commonly referred to as hot and cold markets. We compare IPO assurance fees over these cycles controlling for factors that are potentially associated with hot IPO markets. We find that average assurance fees are lower during hot market periods and that fee coefficients associated with certain client- and IPO-specific attributes are lower during hot markets. Our results are consistent with the explanation that IPO assurance services are influenced by varying client demands to defer or accelerate the date of the new issue in order to capitalize on market conditions.
Client importance and audit partner independence
Journal of Accounting and Public Policy, 31 (3):320-336
We use data from Taiwan where audit partners are required to sign audit reports to examine whether audit partners compromise their independence for economically important clients. Uniquely, we include both listed and unlisted clients in audit partners’ client portfolios and separately study these clients for Big N and non-Big N auditors. We employ multiple proxies for auditor independence, including various abnormal accruals measures, the propensity of audit partners to issue modified audit opinions, and the probability that clients meet or just beat earnings targets. We fail to find evidence that Big N audit partners compromise their independence for economically important clients; however, we find such evidence for non-Big N auditors. Our results are robust to a battery of sensitivity analyses. While our inferences are limited to the Taiwanese capital market, our study may be of interest to market participants and regulators in other well developed capital markets.
Are governmental accounting measures value relevant to the citizenry?
Journal of Public Budgeting, Accounting & Financial Management, 26(4):585-613.
We examine the relevance of governmental accounting information to the citizenry by analyzing the association between various financial and non-financial measures of local government performance and residential property values. The link between government performance measures and residential property values is based on a model of housing value capitalization developed by Yinger (1982). Using a model of firstdifferences, we find that changes in housing values are associated with government financial measures, including reported surplus and changes in outstanding debt. Further, we find that changes in housing values are also associated with non-financial measures of performance by county schools. Overall our results suggest that both financial and non-financial government performance measures are economically relevant to citizen property owners.
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