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• 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

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• 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; 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

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• Supplement | HBS Case Collection | May 2019

  Fair Value Accounting at Berkshire Hathaway Inc. (A) and (B)

  Jonas Heese and Suraj Srinivasan

  Citation:

  Heese, Jonas, and Suraj Srinivasan. "Fair Value Accounting at Berkshire Hathaway Inc. (A) and (B)." Harvard Business School PowerPoint Supplement 119-717, May 2019.  View Details

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