The Partially_cleaned.xlsx file contains the following sheets:
- Audit fees – Auditor fees represent the amount paid by the company for the professional
examination and verification of the financial statements for the purpose of rendering an
opinion as to their consistency, fairness and conformation to accepted accounting principles
(Source: LSEG Worldscope, WC01801, in thousands).
- Executive compensation – The total compensation paid to all senior executives as reported
by the company divided by net sales or revenue in local currency in millions(Source: LSEG
ESG, CGCPDP0541).
- Equity issue – Net proceeds from sale / issue of common and preferred shares represents
the amount a company received from the sale of common and/or preferred stock. It includes
amounts received from the conversion of debentures or preferred stock into common stock,
exchange of common stock for debentures, sale of treasury shares, shares issued for
acquisitions and proceeds from stock options (Source: LSEG Worldscope, WC04251, in
thousands).
Required:
(a) Do a basic clean of the abovementioned sheets in Excel by removing all rows for which no
data exists in LSEG Worldscope and ESG.
(b) Import the sheets into SAS On Demand for Academics.
(c) Add the data from the three sheets to the Main8 dataset.
(d) Create the following variables in Main8:
a. Audit_Fee as auditors’ fee scaled by market value of equity.
b. Eq_Is as an indicator variable coded one if a firm issued equity in the year, and zero
otherwise.
c. Ex_Comp, which is data item CGCPDP0541 from LSEG ESG.
(e) Delete observations for which Audit_Fee, Eq_Is or Ex_Comp are missing.
(f) Winsorize Eq_Is and Ex_Comp to the 1st and 99th percentiles.
(g) Obtain the Pearson and Spearman correlations between Audit_Fee, Eq_Is and Ex_Comp.
Submit the following in a Word document:
(a) Your SAS code to generate the output.
(b) The Pearson and Spearman correlation tables.
(c) Interpret the Pearson and Spearman correlations.
