This paper examines the relation between earnings and operating cash flow to derive and test an indicator of financial statement fraud. Accrual measurement concepts indicate that financial statement fraud should be associated with high levels of earnings relative to operating cash flow. We demonstrate that the excess of earnings over operating cash flow is extreme in most fraud cases in years immediately prior to the fraud discovery based on a sample of 56 fraud cases from 1978 to 1991. We compare the distribution of the earnings minus operating cash flow variable for fraud firms with that for a sample of 60,453 firm‐years for firms listed on COMPUSTAT. We test a logistic regression model in which the discovery/nondiscovery of fraud is the dependent variable, and earnings minus operating cash flow is the explanatory variable. Other control variables are included in the model based on prior studies. Results are consistent with expectations derived from accrual measurement theory. We then examine the predictive ability of the model using our sample of fraud firms and a sample of nonfraud firms in the same four‐digit SIC code industries. Observations for the fraud firms are for the fiscal year prior to the discovery of fraud. Observations for the nonfraud firms are for the same fiscal years as the fraud firms in the same industries. The predictive ability of the model, including the excess of earnings over operating cash flow, is substantially higher than the predictive ability of the model omitting this variable. We conclude that the earnings‐operating cash flow relation provides important information for those interested in identifying financial statement fraud, especially when considered in conjunction with other factors associated with fraud risk.

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Self-loosening of bolted joints in response to vibration can lead to the catastrophic failure of a range of engineering components and structures. Many techniques employed to study this phenomenon focus on directly measuring the preload remaining in the bolt itself, and offer little insight into the behaviour of the clamped interface. In this study, a non-intrusive ultrasonic reflection-based technique is used to first characterize interface pressure in the joint, and then determine the rate at which relaxation occurs. A key advantage of the technique is that it does not require the modification of the contact conditions, and rather utilizes the spring-like behaviour of a rough surface interface when subject to ultrasonic excitation. A series of different bolt torques were investigated, along with the inclusion of both plain and spring washers under the bolt head. All test samples were subjected to an oscillating fixed-displacement vibration cycle. An initial rapid reduction in interface clamping pressure was observed, followed by a more steady-state period. Increasing bolt torque was seen to enhance joint integrity, whereas both the plain and spring washers showed little improvement. The spring washer was observed to extend the secondary steady-state phase of loosening, though as the majority of pre-load was removed prior to this period any change was largely unbeneficial.

The authors of this manuscript have served as editors of two major accounting education journals for the decade ending in 2005. During this period, we evaluated approximately 500 research manuscripts submitted to the “Main Section” of Issues in Accounting Education and the Journal of Accounting Education. We performed a content-analysis of the files of research manuscripts that had been rejected to determine both primary and secondary reasons for rejection. We find that, by far, most manuscript rejections occur after a first-round review (i.e., after initial submission). We also find that, for the most part, the reasons accounting education research manuscripts are rejected are consistent over time, journal, and editor. The reasons for rejection are generally manifested early in the life of the project. Primary reasons for rejection are (1) a poorly motivated study, (2) a poorly designed study, and/or (3) an insignificant contribution to the accounting education literature. Poor writing is a common secondary reason for rejecting accounting education research manuscripts. The most common reason a manuscript was rejected after resubmission was the failure of the author to adequately address concerns expressed by reviewers and the editor during previous review rounds. We include an appendix that provides sources of guidance for getting manuscripts published in accounting education journals.