More from these Authors

• Article | Journal of Accounting Research | June 2019

  Fraud Allegations and Government Contracting

  Jonas Heese and Gerardo Pérez Cavazos

  This paper examines whether fraud allegations affect firms’ contracting with the government. Using a dataset of whistleblower allegations brought under the False Claims Act against firms accused of defrauding the government, we find that federal agencies do not reduce the total dollar volume of contracts with accused firms; however, they substitute approximately 14% of the harder-to-monitor cost-plus contracts for fixed-price contracts. This effect is concentrated in the procurement of services and explained by contract and service substitution. Lastly, we find that after the conclusion of the investigation, the government reduces the contract dollar volume by approximately 15% for cases that resulted in a settlement. Our findings indicate that contract-design changes are used to mitigate uncertainty in suppliers’ reputation.

  Keywords: whistleblower; Fraud Allegations; False Claims Act; Government Contracting; Risk Allocation; Government and Politics; Contracts; Crime and Corruption; Risk and Uncertainty; Business and Government Relations;

  Citation:

  Heese, Jonas, and Gerardo Pérez Cavazos. "Fraud Allegations and Government Contracting." Journal of Accounting Research 57, no. 3 (June 2019): 675–719.  View Details

  CiteView DetailsSSRNFind at Harvard

  Related

• Article | Contemporary Accounting Research | Summer 2019

  The Political Influence of Voters' Interests on SEC Enforcement

  Jonas Heese

  I examine whether political influence as a response to voters’ interest in employment levels is reflected in the enforcement actions of the Securities and Exchange Commission (SEC). I find that large employers are less likely to experience SEC enforcement actions. Next, I examine whether variations in politicians’ sensitivity to employment levels result in variations in enforcement against large employers. I find that large employers are less likely to face enforcement actions during presidential elections if they are based in politically important states. Large employers also face fewer enforcement actions if they are based in high-unemployment states during elections of senators who serve on SEC oversight committees. Large employers based in high-unemployment districts enjoy lower enforcement if their congressmen serve on SEC oversight committees. The findings suggest that voters’ interests are reflected in SEC enforcement.

  Keywords: SEC enforcement; government preferences; employment; voters' interests; political influence; Employment; Public Opinion; Government Administration; Governance Compliance; Political Elections;

  Citation:

  Heese, Jonas. "The Political Influence of Voters' Interests on SEC Enforcement." Contemporary Accounting Research 36, no. 2 (Summer 2019): 869–903.  View Details

  CiteView DetailsFind at Harvard Read Now

  Related

• Working Paper | HBS Working Paper Series | 2019

  Going Digital: Implications for Firm Value and Performance

  Wilbur Chen and Suraj Srinivasan

  We examine the firm value and performance implications of the growing trend of non-technology (non-tech) companies adopting digital technologies such as artificial intelligence, big data, cloud computing, and machine learning. For the entire universe of U.S. publicly listed firms, we identify companies that are going digital using textual analysis of corporate financial reports and conference calls. We first show that digital adoption by non-tech firms has dramatically grown in recent years. Non-tech digital adopters exhibit greater stock price co-movement with technology companies than with their industry peers, suggesting that the digital activities are making them similar to tech firms. The digital adopters hold more cash and are larger, younger, and less CapEx-intensive. Digital adoption is associated with higher valuation―market-to-book ratio is higher by 7%–21% compared to industry peers—and is higher for firms that are younger, more CapEx-intensive, exhibit higher sales growth, and are in industries where digital adoption is prevalent. However, markets are slow to respond to the disclosure of digital activity. Portfolios formed on digital disclosure earn a size/book-to-market adjusted return of 25% over a 3-year horizon and generate a monthly alpha of 40 basis points. Finally, while there is no significant improvement in financial performance as measured by return-on-assets conditional on digital activities, there is a significant increase in asset turnover as well as a significant decline in margins and sales growth. Managerial expertise is important for digital technology adoption, as firms with senior technology executives perform better when going digital.

  Keywords: digital technologies; Business Ventures; Technology Adoption; Valuation; Performance; Management; Experience and Expertise;

  Citation:

  Chen, Wilbur, and Suraj Srinivasan. "Going Digital: Implications for Firm Value and Performance." Harvard Business School Working Paper, No. 19-117, May 2019.  View Details

  CiteView Details Read Now

  Related