Accounting and Finance Conference

Selected Accepted Papers

Selected Accepted Papers

This paper examines bank risk taking behavior among the eight domestic conventional (non-Islamic) banks in Malaysia using dataset from quarterly disclosures to the local stock exchange. Using panel data econometric models, we find bank risk behavior moderated immediately after the GFC and has since risen to near that of the pre-GFC period. The Research makes a significant contribution to understanding bank risk behavior following the devastation of the Malaysian banking industry caused by the 1997/1998 Asian Financial Crisis (AFC). Specifically, the analysis identifies among the accounting variables, asset quality, leverage and income diversification as key emerging risk factors. Among bank specific characteristics, we find shareholding concentration and state ownership to be risk increasing while size has no significant effect at all. Further, there is clear evidence that the effectiveness of corporate governance in moderating bank risk behavior depends on ownership type. Importantly, we find corporate governance less effective at state controlled banks compared to non-state controlled banks. While this research offers evidence of credible regulatory reforms and provide banks the opportunity to consider effective corporate governance as a competitive advantage, the findings have important implications for regulations aimed at controlling the public cost of moral hazards especially when such moral hazards are conflated with state ownership.
I examine pre-crisis interest rate risk exposures of German non-financial companies by analyzing sensitivities indicating how profit and equity would have been affected by changes in interest rates. I find that companies with a management compensation structure that entails a bigger variable part tend to lock in a lower interest rate exposure. This finding suggests that risk-averse managers choose a lower risk exposure, the higher the variable portion of total compensation.
Purpose - The purpose of this paper is to identify existing perceived barriers to popularizing online purchasing and to find out the relationship between perceived risk and popularizing online purchasing, with a specific focus on the influence of perceived risk to popularization of online trade. Moreover this study aims to address on attitude towards the psychological and behavioural issues to gain consumer insights by which popularization of online transactions are most influenced. Design/Methodology/Approach – This paper tests a model of perceived risks as barriers to popularizing online purchasing. A questionnaire survey was used with a sample of 48 Sri Lankan corporate sector managers. The data was analysed using descriptive statistics and hypothesis testing. Findings– The perceived risk of issues of electronic payments, Supply of personal information has a negative relationship with popularization of online purchasing. Non-online shoppers perceive higher risk than online shoppers while males perceive lower risk than females. Research limitations – This study only focuses on three risk considerations – issues of Electronic payments, Supply of personal information, Internet usage addiction -as to why consumers be reluctant to use online purchasing in Sri Lankan context. However still there are many other considerations for popularizing online purchasing. Further the sample had high variations owing to demographic factors such as age and Income levels. Practical Implications –Since the study suggest that perceived risk towards internet and online shopping are high and it is a barrier to popularizing online purchasing of corporate sector managers in Sri Lanka, online retailers can develop strategies and come up more secured option to build trust of consumers. Originality/Value - The study and its results is one of few available that identified consumer perceptions of risk for online purchasing in Sri Lanka.
The paper examines private engagements by Nordic institutional investors related to Environmental, Social and Governance (ESG) incidents in MSCI World companies. These private engagements are a response to the risks inherent in ESG incidents stemming from systematic or severe violations of social norms. A unique data set of 355 private engagements is studied on corruption, environment, human and labor rights, and controversial industry inhumane weapons risks between 2005 and 2013. This paper presents a full engagement model with sequence and duration of actions, from the initial private dialogue to filing shareholder resolutions at the AGM for a potential exit decision. The success rate of private engagements, or when target companies adopt the proposed ESG changes, is 27.6 percent. Successful engagements tend to require nine subsequent engagement dialogues and three years of engagement. In contrast to earlier studies (e.g. Dimson et al., 2015), the incident related engagements in this paper target companies with high market values and ESG performance. Successful engagements lead to additional improvements in ESG performance, which is also the main objective of the engagement dialogue. This paper contributes theoretically by modeling the engagement process and empirically by providing evidence of the targets and outcomes of ESG engagements related to incidents and controversies.
This research examines the role of budgets in a complex post-acquisition integration (IN). Drawing on the central principle of agency given to non-human actors in Latour’s (2005) performative theory, findings show that budgets as non-human actors played a crucial role in the establishment of the integration relations and sustaining them.
Traditionally, Coase’s bargaining theory is used to explain the adoption of the CSR model by nonfinancial firms. According to this approach, researchers view firms producing negative externalities and the community as two antagonizing agents with diametrically opposing interests. Given a minimum availability of social capital, firms adopt the social responsibility principle and share part of their profits with the community, through the Coasean bargaining process. Although these models contribute to the advancement of the literature, they do fail to explain the voluntary adoption of the CSR model by financial and nonfinancial firms. The objective of this paper is to better understand the current trend towards the voluntary adoption of the CSR model by financial and nonfinancial firms. It adapts the Williamson’s conceptual network framework to the context where firms prefer a non-regulated to a regulated environment. By introducing regulation as a constraint variable that government could bring whenever the industry does not perform according to set standards, firms have the incentive to voluntarily adopt the CSR model to avoid regulation (or to have a light-handed regulation). In that sense, networks can be viewed as a means for granting a “social license” to firms which adopt the CSR principle.
This paper performs topic modelling using all publicly available CSR (Corporate Social Responsibility) reports for all constituent firms of the main stock market indices of 15 industrialized countries included in MSCI Europe for the sample period from 1999 to 2016. Our text mining results and LDA analyses indicate that “employees safety”, “employees training support”, “carbon emission”, “human right”, “efficient power”, and “healthcare medicines” are the common topics reported by publicly listed companies in Europe and the UK. There is a clear sector bias with industrial firms emphasizing “employee safety”, Utilities concentrating on “efficient power” while consumer discretionary and consumer staples highlighting “food waste” and “food packaging”. In order to produce these results, we used a battery of python code to organise the hundreds of reports downloaded from Bloomberg and the internet, the latest R-algorithm to estimate LDA (Latent Dirichlet Allocation) model and the LDAvis interactive tool to visualise and refine the LDA model.
This paper performs topic modelling using all publicly available CSR (Corporate Social Responsibility) reports for all constituent firms of the main stock market indices of 15 industrialized countries included in MSCI Europe for the sample period from 1999 to 2016. Our text mining results and LDA analyses indicate that “employees safety”, “employees training support”, “carbon emission”, “human right”, “efficient power”, and “healthcare medicines” are the common topics reported by publicly listed companies in Europe and the UK. There is a clear sector bias with industrial firms emphasizing “employee safety”, Utilities concentrating on “efficient power” while consumer discretionary and consumer staples highlighting “food waste” and “food packaging”. In order to produce these results, we used a battery of python code to organise the hundreds of reports downloaded from Bloomberg and the internet, the latest R-algorithm to estimate LDA (Latent Dirichlet Allocation) model and the LDAvis interactive tool to visualise and refine the LDA model.
This study examines the relationship between RPTs and firm performance. By using Generalized Least Squares (GLS) fixed effect method on the data of 94 non-financial Indonesian listed firms from 2007 to 2013. This study finds that RPTs have a significantly positive relationship with firm performance. RPTs in the form of total size of RPTs, RPTs sales, RPTs purchases and RPTs entity, are found to have significant positive relationship with returns on assets (ROA). RPTs liabilities is found to have significant positive association with cash flow from operating activities (CFO), and RPTs person (individual or close family member) is found to have significant positive relationship with Tobin’s Q. However, this study also finds that RPTs lending has a negative effect on Tobin’s Q.
Prior research shows that predictable dividend increases attract abnormal returns. To understand this puzzle, we study consecutive dividend increases and find that firms are more likely to increase dividends next year the longer the firm’s dividend-increase streak, increasing predictability and reducing the market’s reaction to the event. However, the decline in reaction occurs at a diminishing rate. We attribute this to increases in payout ratio associated with consecutive dividend increases, which mitigate the market’s expectation that the dividend increase will continue and perpetuate the reaction. These results provide an explanation for the market’s reaction to seemingly predictable dividend increases.
The development of theoretical analysis of forest accounting cycle would help to establish forest accounting system in a scientific way. The main objective of the study is to make forest accounting cycle and to make a theoretical analysis of forest accounting system. The present study concludes that forest accounting does involve a lot of complicated issues hence systematic investigation of forest accounting cycle is inevitable. Forest accounting cycle deal with forest capital (Forest capital refers to elements of forest that produce values directly and indirectly to people such as stock of trees, animals, goods and services etc).
Auditor assurance service play a role in reducing asymmetric information, especially during going-public process. Using the IPO data over a four-year period around SOX, we examine whether audit quality, measured by auditor reputation and independence, mitigates asymmetric information problem in a special setting of the enactment of SOX. Our results show that auditor independence has a negative effect on the IPO underpricing both before and after the SOX and that the significant reduction in IPO underpricing post SOX would be driven by auditor independence. We further find that auditor independence has a positive relation with IPO firm’s long-term performance and this effect is much stronger for firms going public after SOX. Finally, our evidence supports the notion that underpricing is mainly caused by asymmetric information problem; we observe that a firm’s IPO underpricing is positively associated with its post IPO beta and that SOX and auditor independence have a direct, though moderate, effect on this relation.
There can little doubt that the decision a family has to make in terms of a provider for aged care is an emotional one. They must look at quality of care, financial constraints and which provider best suits the needs of the family member. For the provider too, they must make sure they provide the information for the families to make the right decision. However, this research shows that in the Residential Aged Care (RAC) sector in Australia, many providers fall short in terms of information provided to families, making the decision even harder to make. The Models and Frameworks presented in this paper were developed to address this lack of adequate and consistent disclosure in the Australian RAC Sector. The results show that the sector itself is suffering Alzheimer’s disease, with a lack of transparency, accountability and general disclosure.
We provide evidence on the impact of loan covenants on audit delays and audit fees. We find that for most covenants, firms with that a particular covenant have longer audit delays than firms without that covenant. On average, auditors of firms with at least one loan covenant take two more days than the auditors of the firms with no loan covenant at all. We observe that adding one more loan covenant will delay the audit report by at least one day. We also found that adding one more loan covenant increases audit fee by 0.7 percent.
Influence of exchanges in stock market is an interesting problem to study, though heavy trading exchanges have dominance in multi-market dynamics. In this work, we focused on understanding this dynamics through the analysis of high frequency trading data from different stock exchanges. In particular, we collected financial data (stored in microseconds) from the Securities Information Processor (SIP) which consolidates trading data from 14 exchanges and few other stock pools. We used big data framework such as Hadoop and Spark to analyze these (high frequency) financial data to find the anomalies in data pattern and exchange dominance. We applied statistical and data mining techniques for analysis and observed that Stock Exchanges those dominate on typical days are not equally active on the flash crash day. Other anomalies in multimarket data pattern between normal and the flash crash days are found via heat map analysis.
The paper investigated the nature and the prevalence of real activity manipulations among quoted companies in Nigeria. The scope of the study is from the year 2000 to 2014, and it covers 71 quoted firms in Nigeria. We extracted data on the relevant variables from the published annual reports of the firms. Three types of real activity manipulations were examined in this study which includes; abnormal cash flow, abnormal discretionary expenditure and abnormal production cost. Three models were formulated representing each of the three types of real activity manipulations, and the Pooled Mean Group form of panel data analysis is applied. The result shows that manipulations of cash flow are the dominant nature of real activity manipulations among quoted firms in Nigeria and it is the abnormal cash flow that is the most prevalent among the sampled 71 companies as a form of real activity manipulations. Therefore, audit committee and other relevant agencies are advised to give more attention to the cash flow analysis of these companies to curtail the rising trend of real activity manipulations among quoted companies in Nigeria
In June 2017 Science magazine produced an extensive multi authored1 article entitled “Estimating economic damage from climate change in the United States”. It is an extensive article that produces among other things a forecast of economic costs from rising sea surface temperatures – i.e. a measurable component of climate change. Included in the estimated costs are the direct effects on coastal cities of rising sea waters, higher temperatures on crop yields and the direct effect on energy as well as the indirect effects on mortality, violent crime, labor, productivity and property damage. The study is wide ranging and results in important depictions of losses by coastal county (see reproduced figure below) and a fitted prediction of costs-to-come (as an impact on US GDP) as a quadratic function of further changes in temperatures.
Using a panel of 291,241 Chinese firms from 1998 to 2007, this study investigates the extent to which industry competition affects firms’ innovation activities in China. We find that firm-level innovation is negatively related to industry competition. The negative relation is stronger in higher external finance dependence (EFD) industries. Further evidence shows that the enhanced negative effect in higher EFD industries is more pronounced for financially constrained firms than financially healthier counterparts. Specifically, competition represents a more inhibiting effect on innovation activities in higher EFD industries for private firms, small firms, young firms, firms with low capacity to pay interest, firms without political affiliation, firms without state shares, firms with high growth opportunities, and firms located in central and western regions. Our results are robust to the use of various specifications and estimation methods.
Traditionally, Coase’s bargaining theory is used to explain the adoption of the CSR model by nonfinancial firms. According to this approach, researchers view firms producing negative externalities and the community as two antagonizing agents with diametrically opposing interests. Given a minimum availability of social capital and through the Coasean bargaining process, firms adopt the social responsibility principle and share part of their profits with the community. Although these models contribute to the advancement of the literature, they do fail to explain the voluntary adoption of the CSR model by financial and nonfinancial firms. The objective of this paper is to extend the understanding of the current trend towards the voluntary adoption of the CSR model by financial and nonfinancial firms. It adapts the Williamson’s conceptual network framework to the context where firms prefer a non-regulated to a regulated environment. By introducing regulation as a constraint variable that government could introduce whenever the industry does not perform according to set standards, firms have the incentive to voluntarily adopt the CSR model in order to avoid regulation (or to have a light-handed regulation). In that sense, networks can be viewed as a means for granting a “social license” to firms who adopt the CSR principle.
—This paper sheds light on how accounting information quality influences the pricing effects of investor sentiment with a further investigation of asymmetry. After controlling for firms’ characteristics, we examine two micro-mechanisms by modified residual income model and two market transmission channels proposed for China’s stock market. The results show that earnings transparency mitigate sentiment-related mispricing in stock valuation, especially for firms with high valuation difficulty. To be specific, accounting information quality affects investor behaviors through the micro-mechanisms including expected earnings growth and required rate of return; Changes in institutional ownership and analyst rating can also serve as market transmission channels. Our findings inspire asset pricing, investment decisions, regulatory policies and information disclosure as well.
We examine whether politically connected firms in China are more likely to appoint a low-quality auditor at the firm level and individual level than non-connected firms. First, at the audit firm level, we find that the propensity of retaining lower-quality audit firms, as measured by non-Top 10 audit firms, is greater for connected firms than for non-connected firms. Second, at the individual level, we find that connected firms are more likely to appoint the signing auditors sanctioned by regulatory agencies or the Chinese Institute of Certified Public Accountants. Additional analyses indicate that connected firms are more likely to retain both non-Top 10 audit firms and individual sanctioned auditors than non-connected firms. Third, connected firms with non-Top 10 audit firms (or sanctioned signing auditors) exhibit aggressive earnings management behaviors and are less likely to receive a modified audit opinion than non-connected firms with Top 10 audit firms (or non-sanctioned auditors). Our findings are in sharp contrast to those in prior studies based on a sample of observations outside China.
Investors’ behavior of selling winners early and holding losers (disposition effect) is based on the framing of reference points. Based on the studies which found the salience of historical prices as anchors and reference points, we test the association between disposition effect and anchoring by examining abnormal trading volumes and historical prices in Indian stock markets using market level data. Except for familiar and highly liquid stocks (Nifty50 index stocks) this study found a significantly high percentage of winning days association with abnormal trading volumes than that of losing days. This study provides the evidence of disposition effect in Indian stock markets.
Currently, 120 countries in the world require or permit use of IFRS. Academic research shows that IFRS-based financial statements have enhanced transparency and comparability and result in lower cost of capital and greater cross-border capital flows. Although the FASB-IASB convergence project has yielded some notable successes, the process has stalled in recent years as the SEC refuses to require or permit domestic companies to use IFRS. There exists a robust demand for IFRS in the United States. Though there are some obstacles in the path of IFRS adoption, the key to any meaningful progress lies in the political arena.
In the process of convergence to International Financial Reporting Standards ( IFRS), Indian Accounting Standards (Ind ASs) are notified as a replacement of the previous Indian GAAP (iGAAP) for phased implementation1 by size of net worth which is considered as a major qualitative change in financial reporting in India to be at par with the globally acceptable accounting principles. Ind ASs are based on partial fair value measurement basis (hybrid measurement model followed in the IFRSs) by which financial assets are primarily measured at fair value while cost alternatives are allowed for tangible fixed assets and intangibles. The first phase of Ind ASs implementation is over as per the IFRS convergence time line issued by the MCA , and the first set of IFRS converged financial statements for the accounting period 2016-17 have already been released by Phase I companies which provide evidence regarding impact of fair value measurement of financial assets and financial liabilities as per Ind AS 109 ( IFRS 9 Financial Instruments) and Ind AS 113 ( IFRS 13 Fair Value Measurement) along with OCI component as per Ind AS 1 ( IAS 1 Presentation of Financial Statements). Of course, there exists differences in many other standards as well impacting recognition and measurement of various assets, liabilities, revenue, depreciation, borrowing costs, interest income, and deferred tax. It has also impacted method of consolidation of joint ventures, accounting for business combinations and translation of foreign operations. By virtue of hybrid measurement principles of IFRS/Ind AS, the major portion of assets of non-financial entities, comprising of tangible fixed assets and intangibles, are preferred to be measured by cost model rather than revaluation model perhaps because of inherent difficulties in fair value measurement of non-financial assets. Also application of the revaluation model to intangible assets is constrained to observable market price as per Ind AS 38 Intangible Assets, and investment property is further constrained to be measured at historical cost because of fair value carve out in Ind AS 40 Investment Property.
This paper first constructs a new risk index for FX market following corridor method by Andersen et al. (2015), and establishes its empirical ability to comprehensively measure FX risk. The index provides a tool to look into FX risks across different horizons, to derive FX risk term structure. It is consistently found that for currencies paired by US dollars, term structure of FX risk is flat prior to crisis, upward-sloping after crisis, and has prominently negative slope during crisis. This work is believed to be new in FX research field, and the result is consistent with both recent empirical findings in equity and fixed-income markets, and their disasters and recoveries theories, shedding light on FX theory modeling in the future. The most important contribution of the paper is that a risk factor is extracted from the information in FX risk term structure, to help explain FX excess return, which has been a long-lasting puzzle. The evidences come from its ability to construct profitable trading strategy by longing currencies with highest slope of risk term structure and shorting ones with lowest slope, and from its ability to explain time-varying risk premia in carry trade, a famous trading strategy associated with FX puzzles. 1
The effect of inadequate and inaccurate reporting requirements distort free market and result in poor U.S government, industries and corporate policy and strategic decisions which will prove unsustainable This subject is made even more compelling given the effect of US governmental, industries and corporate strategies and policies on our social, economic and environmental systems. The Cambridge Dictionary defines Unsustainable as: “Something that is unsustainable cannot continue at the same rate.” Definition of unsustainable adjective from the Cambridge Advanced Learner\'s Dictionary & Thesaurus Cambridge University Press http://dictionary.cambridge.org/dictionary/british/unsustainable Continuation of these unsustainable strategies and distortion of free market principles can be seen in inaccurate assignment of cost, weakening in the transactional linkage between cost / price and resulting price ambiguities, misallocation of resources and market inefficiencies.
decommissioning costs of oil and gas assets meet the description of asset and provisions under IAS 37. Therefore, accounting for, and disclosures of, provisions for decommissioning oil and gas installations are accounted for in accordance with IAS 16 and IAS 37. Hence, these costs are recognized at the point of an asset installation as part of that asset’s historical cost and as a provision in the balance sheet. However, given the long time span between the asset installation point and decommissioning that asset accounting for decommissioning costs is subject to significant complexity and subjective judgments. Due to their sizes decommissioning costs of oil and gas installations have material cash flow effects. Given the magnitude of decommissioning costs, disclosures of provisions are critical for stakeholders to understand the impact on future cash flows. This study investigates compliance with the reporting requirements of international accounting standards (IASs) regarding provisions for decommissioning costs; it extends to uncover perceptions of stakeholders on reporting practices. Using both secondary and primary data and utilizing a content analysis approach, we conclude that while there are sufficient accounting standards to regulate provisions of decommissioning costs of oil and gas installations there is a lack of compliance with disclosure requirements of IASs. Oil and gas companies tend to disclose the minimum amount of information about provisions for decommissioning costs. We find that stakeholders perceive the information provided by the companies as inadequate and require them to provide more detailed and meaningful information. Our findings have imperative policy implications for improving the quality of information availed to stakeholders.
This research study try to find relationship between the performance of top 100 companies (BRR Complying companies portfolio) those are complying with BRR as it was made mandatory by SEBI, vis a vis Nifty 50 (Blue chip companies portfolio) and NSE 500 companies (Market portfolio) with the help of three ratios Sharpe Ratio, TreynorRatio and Jensen’s Alpha. This research study also try to find any change in the performance of these portfolios during the period BRR was not implemented and post BRR implemented period. The prices of stock of all these companies taken and percentage return has been found taking the lag of a month and a week as monthly returns and weekly returns respectively. This study found that there is significant differences among the BRR Complying companies portfolio, Blue chip companies portfolio and Market portfolio. BRR Complying companies portfolio outperform the other two portfolio almost throughout. This research study also try to find performance of different industries among the BRR Complying companies portfolio and segregated these 100 companies into six sectors. It was found that FMCG sector is the most successful among all the sectors, the second most successful sector is IT, Entertainment and Consultancy followed by Banking and Finance, Oil, Coal and Power sector, Health and FMCG and Miscellaneous Sector. This study also found that there is significant differences even in intra BRR Complying companies during the period BRR was not implemented and period post BRR implemented also sector-wise study found similar results. Keyword: Business Responsibility Reporting, NSE, BSE, Indian Stock Market, Sharpe Ratio, Treynor Ratio, Performance Evaluation.
This paper constructs the endogenous DSGE model which includes the real estate department, in addition, this paper examines the dynamic response of economic and financial variables in the face of different exogenous impact under different real estate price stickiness. The results show that technological advances can push up house prices in a way that increase the return on investment and reduce systemic financial risks; the impact of falling housing prices and the financial sector can increase risk premiums and financial risks; tight monetary policy shocks can significantly reduce housing prices and ease macroeconomic conditions fluctuation. Moreover, there are differences in the degree of response between financial variables and macroeconomic variables to exogenous-shocks at different real estate price stickiness, variables often deviate smaller from the steady state under high price stickiness. The paper reaches policy which has a significant policy revelation on effective measure of monetary policy and a new round of real estate market’s regulations.
There have been a number some studies which have contributed to the Audit Expectations Gap (AEG) literature, and the existence of the research area is recognized internationally and remains as one of the important areas in auditing & accounting. Most of the studies have sought to identify whether an expectation gap exists and what the contributing factors are, see Porter (1993), Fazdly and Ahmad (2004), and Dixon et al. (2006). Facilitated learning into auditor independence carries a significant contribution to this subject, see Sweeney (1997), Lin and Chen (2004) and Alleyne et al. (2006). Most of the studies conducted have found that users possess little understanding of the financial statements and the role of auditors. This situation has not improved over time. However, the expectations for the role of the auditors have increased due to some reasons, notably including significant corporate collapses, (Monroe & Woodcliffe 1994). Also, companies need to incorporate Corporate Social Responsibility (CSR) because their behavior may become the subject of bias reviews, (APCO Worldwide 2004). Previous studies have argued that different stakeholder groups have different expectations and organizations are reluctant to provide sensitive information to stakeholders. Over time, an expectations gap has grown significantly, and auditors have been criticised reflecting a loss of confidence in their work.
Systemic Risk Network of Chinese Financial Institutions
Private and State-Owned Listed Firms: a decision tree analysis in the Italian setting
Did the implementation of MIFID affect the ability of the investors in the European equity market to reach their investment objectives?
Audit Pricing and Market Pricing Strategy in Initial Audit Engagements: Evidence from Taiwan
Asset Pricing: A Tale of Night and Day
ERP Integration and information quality: direct and indirect effects
Information Environment and Value Relevance of Accounting Information
Human resources accounting: challenges and opportunities
AN EXAMINATION OF CYCLICAL ASYMMETRY IN UNEMPLOYMENT RATES: EVIDENCE FROM INTERNATIONAL COUNTRIES
EMPIRICAL ANALYSIS OF INVESTORS’ HERDING BEHAVIORS: EVIDENCE FROM THAILAND
Determination of Skills and Attributes for Accounting Graduates in Iran based on Analytic Hierarchy Process Method
Does Governance have a Say on Dividend? Evidence from Australian Listed Firms
The New US GAAP Lease Requirements and the Impact on Financial Ratios
Information Attention and Herding Behavior
Hello, Is Anybody There? Corporate Accessibility for Outside Shareholders as a Signal of Agency Problems
The Effect of Cloud Technology and big Data on the Efficiency and Effectiveness of External Auditing Using the grounded Theory
Earnings Management in Diversified & Non-Diversified Companies of Pakistan
Shanghai-Hong Kong Stock Exchange Connect Program -Two Markets and Different Groups of Stocks
Detecting Price Manipulation in National Stock Exchange
Detecting Price Manipulation in National Stock Exchange
The Relationship between Traditional and Value Based Performance Measures with Market Value Added: Evidence from Malaysia
The quality of financial reports has been an issue of concern among regulators and other stakeholders globally especially after fraudulent financial reporting which led to the collapse of high profile firms such as Enron and WorldCom. This prompted the issue of corporate governance. In Nigeria, corporate governance was introduced to curb financial manipulation and fraudulent financial reporting in order to enhance corporate financial reporting quality. The effectiveness of the board as a corporate governance mechanism in its oversight function is stated to be dependent on the attributes. This paper examines the effect of the board attributes of independence, size, managerial share ownership, frequency of meetings, gender diversity and financial expertise on financial reporting quality of listed deposit money banks in Nigeria. Using 108 firm year observations during the period 2006 to 2014 and utilizing descriptive statistics, Pearson correlation and Pool OLS regression, the result reveal that frequency of meeting has positive and significant effect on financial reporting quality, gender diversity has positive but insignificant effect while financial expertise has negative and significant effect on financial reporting quality. The board attributes of size, independence and managerial share ownership has negative but insignificant effect on financial reporting quality of deposit money banks in Nigeria. The paper recommends, among others, that the Central Bank of Nigeria (CNB) as the chief regulator of banks should review the corporate governance framework with a view to increase the board activity level, regulate for a minimal number of female directors on bank boards, and emphasize the issues of competence, diligence, commitment and ethics of board members to the business of the board.
The quality of financial reports has been an issue of concern among regulators and other stakeholders globally especially after fraudulent financial reporting which led to the collapse of high profile firms such as Enron and WorldCom. This prompted the issue of corporate governance. In Nigeria, corporate governance was introduced to curb financial manipulation and fraudulent financial reporting in order to enhance corporate financial reporting quality. The effectiveness of the board as a corporate governance mechanism in its oversight function is stated to be dependent on the attributes. This paper examines the effect of the board attributes of independence, size, managerial share ownership, frequency of meetings, gender diversity and financial expertise on financial reporting quality of listed deposit money banks in Nigeria. Using 108 firm year observations during the period 2006 to 2014 and utilizing descriptive statistics, Pearson correlation and Pool OLS regression, the result reveal that frequency of meeting has positive and significant effect on financial reporting quality, gender diversity has positive but insignificant effect while financial expertise has negative and significant effect on financial reporting quality. The board attributes of size, independence and managerial share ownership has negative but insignificant effect on financial reporting quality of deposit money banks in Nigeria. The paper recommends, among others, that the Central Bank of Nigeria (CNB) as the chief regulator of banks should review the corporate governance framework with a view to increase the board activity level, regulate for a minimal number of female directors on bank boards, and emphasize the issues of competence, diligence, commitment and ethics of board members to the business of the board.
The results show that the most common mechanism used in the UK post-IFRS adoption is managerial guidance. This finding might indicate that analysts probably increase the chance of lowering their initial forecasts if managers attempt to guide them with such information. The interaction variable of stock recommendation that relates to managerial guidance shows a positive and significant relationship with the dependent variable. However, the interaction of sell recommendation is negatively correlated with analyst tendency to lower analyst forecasts. This result suggests that analysts are less likely to issue sell recommendations for firms that provide more guidance.
EFFECT OF SOCIAL AND ENVIRONMENTAL AUDIT IN CONTEMPORARY ECONOMY
This study examines the social and environmental auditing on sustainable development in Nigeria. The specific objectives are to: ascertain whether social and environmental auditing can be used to determine the perceptions of society toward the operations of business organizations in Nigerian economy; evaluate the effectiveness of social and environmental auditing system in investment appraisal of business organizations in Nigerian economy and determine the level of adoption of social and environmental auditing among business organizations in Nigeria. Three hypotheses were formulated in line with the objectives of the study. Survey research design was adopted. Data were obtained from questionnaires and analyzed with five point likert‟s scale and the three hypotheses formulated were tested using t-test statistical tool with aid of SPSS statistical package version 20.0. From the analysis, the study found that social and environmental auditing enhanced in determining the perception of society toward business organizations in Nigerian economy, also that the effectiveness of social and environmental auditing system aid investment appraisal in business organizations in Nigerian economy. Another finding is that the level of adoption of social and environmental auditing has influence operations of business organization in Nigerian economy. Based on the findings, the researcher recommends among other things that manufacturing companies should focus on those environmental friendly policies to enhance their competitiveness which would subsequently lead to high corporate performance; this will bring about good environmental sustenance
Critical Success Factors of Financial Statement Quality Improvement Case Study in Indonesian Local Governments who Got Unqualified Opinion for the First Time
This study will be conducted on the local government in Indonesia who first received unqualified opinion. The capabilities of regency in Central Java who first gain unqualified opinion are at level 1 based on IACM Level. From the facts mentioned above, the question arises whether with the lowest level of capability (level 1), how can GISA (Government Internal Supervisory Apparatus) able to perform its functions optimally, even able to improve the quality of the local government financial statement. This research aims to know the role of GISA in increasing the quality of local government financial statements. The data collection of this study used a questionnaire. Sampling from this research is done by purposive sampling method that is taking samples based on certain characteristics or criteria. The criteria of respondents selected, they should be functional auditor officials, functional officers, and structural officers who perform supervisory functions The results of hypothesis testing showed only variable of follow up audit finding that has positive and significant influence to the quality of local government financial report. This variable effect for about 21,7% while others influence by other factors that do not include in this research.
The Role of External Auditors on the Performance and Growth of Public Limited Companies
In recent years, the scale of intellectual property rights financing has gradually expanded, and how commercial banks can predict risks objectively and accurately is especially important. In order to further study the risk-alert of intellectual property rights financing, this paper, from the perspective of commercial banks and based on the characteristics of Innovative Small and Medium-Sized Enterprises (SMEs), obtained 84 innovative SMEs data through Field research of Science and Technology Finance departmentof Tianjin Commercial Bank. The author measured the the importance of indicators by the Gini descent method, selected 14 indicators that most affected the financing risk out of the 54 indicators, and then used the random forest to establish an innovative SMEs intellectual property right financing risk-alert model, compared with the neural network and particle swarm optimization support vector machine accuracy and found that the stability and accuracy of random forest modelare higher than the other two models .