{"id":1575,"date":"2007-07-10T11:12:41","date_gmt":"2007-07-10T11:12:41","guid":{"rendered":"http:\/\/scienceblogs.com\/principles\/2007\/07\/10\/high-stakes-cheating\/"},"modified":"2007-07-10T11:12:41","modified_gmt":"2007-07-10T11:12:41","slug":"high-stakes-cheating","status":"publish","type":"post","link":"http:\/\/chadorzel.com\/principles\/2007\/07\/10\/high-stakes-cheating\/","title":{"rendered":"High Stakes Cheating"},"content":{"rendered":"

From EurekAlert, we learn that corporate executives are a bunch of cheaters<\/a>, when the incentives are right:<\/p>\n

\n

According to the authors, “Our results demonstrate two factors substantially increase the likelihood of financial misrepresentation: extremely low performance relative to average performance in the firm’s industry, and high percentages of CEO compensation in stock options.” <\/p>\n

The study also determined that approximately 1 in 10 of the financial restatements examined by the authors was linked to fraud and illegal practices. Over five years, there was a 9% likelihood that a company misrepresents its finances and is found out. The actual frequency of misrepresentation is almost certainly higher. <\/p>\n

Stock options offer a strong incentive to raise the stock price above the strike price; indeed, the stock price must rise above the strike price for executives to profit from their options. This incentive motivates some executives to misrepresent financial outcomes to raise the stock price.<\/p>\n<\/blockquote>\n

I am shocked– shocked! In totally unrelated news, “The Weasel King” points to<\/a> a story about accusations of rampant cheating at a charter school<\/a>:<\/p>\n

<\/p>\n

\n

Now, eight former teachers assert in a 27-page report to state and local education officials that a culture of cheating exists at the school. And they say it’s done at the top level. <\/p>\n

The teachers claim: <\/p>\n

— Students’ grades are frequently falsified. <\/p>\n

— Course titles don’t always match the easier content tested. <\/p>\n

— Low-scoring students are barred from taking state-required exams in an attempt to keep them from lowering the school’s scores. <\/p>\n

— Discipline is arbitrary and intimidating. <\/p>\n

Just as stunning is the teachers’ assertion of who is responsible for the alleged misconduct: the director, Isaac Haqq, Uprep’s founder and most fervent cheerleader.<\/p>\n<\/blockquote>\n

To be fair, the main lesson of the story really appears to be that crazy people should not be allowed to run schools, because, damn, Haqq comes off as a lunatic… <\/p>\n","protected":false},"excerpt":{"rendered":"

From EurekAlert, we learn that corporate executives are a bunch of cheaters, when the incentives are right: According to the authors, “Our results demonstrate two factors substantially increase the likelihood of financial misrepresentation: extremely low performance relative to average performance in the firm’s industry, and high percentages of CEO compensation in stock options.” The study… Continue reading High Stakes Cheating<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"1","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,13],"tags":[],"class_list":["post-1575","post","type-post","status-publish","format-standard","hentry","category-academia","category-education","entry"],"_links":{"self":[{"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/posts\/1575","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/comments?post=1575"}],"version-history":[{"count":0,"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/posts\/1575\/revisions"}],"wp:attachment":[{"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/media?parent=1575"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/categories?post=1575"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/tags?post=1575"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}