Journal articles on the topic 'Nonfinancial statement'
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1
Hand, John R. M. "The Value Relevance of Financial Statements in the Venture Capital Market." Accounting Review 80, no. 2 (April 1, 2005): 613–48. http://dx.doi.org/10.2308/accr.2005.80.2.613.
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This study examines the value relevance of financial statement data and nonfinancial statement information within and across the pre-IPO venture capital and post-IPO public equity markets. For a sample of U.S. biotechnology firms, I find that financial statements are highly value-relevant in the venture capital market, and that the signs of the associations between equity values and financial statement data in that market are similar to those in the public equity market, despite significant structural differences between the two. I also find that the value relevance of financial statements generally increases as firms mature, consistent with financial statements capturing the increasing intensity of assets-in-place relative to future investment options. In contrast, the value relevance of nonfinancial statement information decreases as firms mature, indicating that, in a dynamic sense, financial statements and nonfinancial statement information of venture-backed pre-IPO biotech companies are information substitutes in valuation, not complements.
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Pozzoli, Matteo, and Marcello Raffaele. "Non-financial information and company market value." MANAGEMENT CONTROL, no. 2 (June 2022): 167–87. http://dx.doi.org/10.3280/maco2022-002-s1008.
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Directive 2014/95/EU and the recent importance of the social and environmental sustainability topic have increased the interest of scholars, practitioners, investors, and other stakeholders in nonfinancial information aspects. This article examines the impact that the level of disclosure of nonfinancial information, as dictated by the European Union (EU) directive, has on market value. It measures the effect of some variables of nonfinancial information (proxied by the adoption of the Glob-al Reporting Initiative [GRI] "core" or "comprehensive" option or the GRI "refer-enced-claim" option, the number of pages of the nonfinancial statement, the presentation of the statement separate from or aggregated with the annual report, and the use of the same or a different auditor for the statement and annual report) on the level of market value measured by market-based performance (Tobin's Q). The analysis was tested on Italian listed companies that presented nonfinancial statements during the 2017-2019 period. The research, conducted on the 2019 nonfinancial statements, shows that all investigated companies apply GRI stand-ards. The empirical results furthermore show that the examined variables are not related to market performance and are not significant. These results lead to poten-tially contradictory findings. Whereas the adoption of generally recognized Corpo-rate Social Responsibility (CSR) standards - being voluntarily adopted by all the investigated companies - is deemed crucial by stakeholders, the details of CSR information, by contrast, do not seem to have an impact on market value.
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Chen, Suduan, Yeong-Jia James Goo, and Zone-De Shen. "A Hybrid Approach of Stepwise Regression, Logistic Regression, Support Vector Machine, and Decision Tree for Forecasting Fraudulent Financial Statements." Scientific World Journal 2014 (2014): 1–9. http://dx.doi.org/10.1155/2014/968712.
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As the fraudulent financial statement of an enterprise is increasingly serious with each passing day, establishing a valid forecasting fraudulent financial statement model of an enterprise has become an important question for academic research and financial practice. After screening the important variables using the stepwise regression, the study also matches the logistic regression, support vector machine, and decision tree to construct the classification models to make a comparison. The study adopts financial and nonfinancial variables to assist in establishment of the forecasting fraudulent financial statement model. Research objects are the companies to which the fraudulent and nonfraudulent financial statement happened between years 1998 to 2012. The findings are that financial and nonfinancial information are effectively used to distinguish the fraudulent financial statement, and decision tree C5.0 has the best classification effect 85.71%.
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Ames, Daniel, Joseph F. Brazel, Keith L. Jones, Jay S. Rich, and Mark F. Zimbelman. "Using Nonfinancial Measures to Improve Fraud Risk Assessments." Current Issues in Auditing 6, no. 1 (March 1, 2012): C28—C34. http://dx.doi.org/10.2308/ciia-50168.
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SUMMARY Nonfinancial measures (e.g., number of employees, square feet of operations, independent customer satisfaction, number of customer accounts) can be helpful in assessing the risk of revenue frauds. Companies committing such frauds may have a hard time falsifying nonfinancial measures, especially those produced independently (e.g., customer satisfaction). Auditors can benefit from examining relationships between nonfinancial measures and financial measures to validate financial statement data. A recent study, “Using Nonfinancial Measures to Assess Fraud Risk” (Brazel et al. 2009), provides empirical evidence concerning the relationship between various nonfinancial measures and revenue frauds. This article may be useful as a reference for auditors, or as a teaching tool in the classroom, as it reviews and summarizes Brazel et al.'s (2009) study and provides specific actual examples.
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RENITA, TASYA, and YULIANI ALMALITA. "PENGARUH MOTIVATIONAL BONUSES DAN CORPORATE GOVERNANCE TERHADAP MANAJEMEN LABA." E-Jurnal Akuntansi TSM 2, no. 3 (September 30, 2022): 209–24. http://dx.doi.org/10.34208/ejatsm.v2i3.1702.
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The objective of this research is to acquire empirical evidence regarding the factors that can affect earnings management in nonfinancial companies listed on Indonesia Stock Exchange. These factors are motivational bonuses, leverage, firm size, size of audit committee, independent commissioner, institutional ownership, managerial ownership, free cash flow, board size, and audit quality. The population used in this research are nonfinancial companies consistently listed on Indonesia Stock Exchange from 2018-2020. This research uses purposive sampling method which the research sample consists of 104 nonfinancial companies listed on the Indonesia Stock Exchange. The results of the data obtained were analyzed using multiple regression method. The results of this research show that motivational bonuses has positive effect on earnings management because the company’s management has opportunistic behaviour to get bonuses with their manipulating company profits. Leverage has negative effect on earnings management because there was surveillance from creditors and investors can minimize earnings management practices, Managerial ownership has positive effect on earnings management because higher managerial ownership can control the company’s management to manipulate financial report, Free cash flow has negative effect on earnings management because the higher of free cash flow indicates the company can manage operational activity well. Audit quality has negative effect on earnings management because public accountant big 4 can detects error from financial statement and reduce earnings management. The other variables have no influence on earnings management.
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Iefymenko, T., L. Lovinska, and М. Kucheriava. "Reforming the Information Support of Public Administration in the Wartime." Science and Innovation 18, no. 4 (August 13, 2022): 17–24. http://dx.doi.org/10.15407/scine18.04.017.
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Introduction. The appropriate database on the effectiveness of the institutional sectors of the Ukrainian economy, including Nonfinancial and Financial corporations and the General Government sector, plays a vital role in decision-making at the state level and the level of institutional investors.Problem Statement. According to the World Bank forecasts, the wartime in Ukraine and a significant reduction in GDP necessitate the attraction of additional finances aiming at economic recovery. These need accurate information, both at the stage of requests for additional funding from international financial institutions and at the accountability and effectiveness assessment stage.Purpose. Developing and substantiating the suggestions to increase the transparency of information on financial and property state and the efficiency of institutional sectors of the economy. Management decisions based on such information can be made at the meso and macro levels during wartime and post-war recovery of the economy.Materials and Methods. The study is based on the following information sources: documents issued by international financial and professional organisations to develop accounting and analytical support for decisionmaking. Research methods used: bibliographic, analysis, synthesis, generalisation and systematisation.Results. The following critical issues of IPSAS implementation for justifying strategic financial decisions during both wartime and the post-war period are identified. It is proved that there may be other areas, related to the further development of the entities’ nonfinancial reporting in Ukraine.Conclusions. The results of the study have allowed formulating the suggestions for further improvement of the transparency and accountability of institutional sectors and developing a potentially informational solid and analytical database for strategic decision-making.
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Hassan, Chya Mohammed. "Factors affecting the phenomenon of customs evasion." Journal of University of Human Development 3, no. 2 (June 30, 2017): 448. http://dx.doi.org/10.21928/juhd.v3n2y2017.pp448-466.
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The aim of this study is to identify factors that have influence on the phenomenon of custom evasion from the perspective of the employees at the Directorate of Custom in Garmian. The study sample consisted of all employees in the Directorate of Custom in Garmian. The number of 43 responses received from the total population (56) which is equal to 77% of all sent questionnaires.
The results of the study indicated that there is no significant correlation between each of the (training and strong coordination between the General Administration of Customs and security apparatus) and the phenomenon of custom evasion. However, there was significant correlation between each of (the lack of custom awareness, increased financial and nonfinancial incentives) and the phenomenon of custom evasion from the perspective of the employees at the Directorate of Custom in Garmian. The findings of the study also showed no significant differences about the phenomenon of custom evasion and the respondents’ perspective at the Directorate of Custom in Garmian is attributed to the personal characteristics of the study sample (years of service, educational qualification, sex(.
In light of these findings, this study recommends that to work on increasing custom awareness among taxpayers, and work to remove the psychological barrier between the taxpayer and the administration of customs. This is through seminars, publications and the media, with aspects of the disbursement of these fees statement to reassure the taxpayer that the fees that they pay is spending to achieve public interest.
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LUPU, Aurel Constantin, and Oana Raluca IVAN. "ACHIEVING THE SUSTAINABLE DEVELOPMENT GOALS." ANNALS OF THE UNIVERSITY OF ORADEA. ECONOMIC SCIENCES 30, no. 2 (December 2021): 147–54. http://dx.doi.org/10.47535/1991auoes30(2)016.
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The purpose of this paper is to examine the state of Romania’s sustainable development using statistical indicators (green investments, employment rate, GDP expenditure on research, development, and innovation, greenhouse gas emissions, share of renewable energy in gross final energy consumption, early school leavers, tertiary educational attainment, and people at risk of poverty or social exclusion). The method used in this research work is bibliographical and statistical research. The topic of sustainability has experienced a new upswing. Society demands sustainable business from companies and wants transparent information in return. The importance of sustainable action is also reflected in investment decisions: the classic financial key figures are no longer the exclusive reason for an investment. Rather, non-financial indicators are expected to provide further information about the long-term value of a company. In 2014, EU member states adopted a directive to expand the reporting of large capital market-oriented companies, credit institutions, financial services institutions and insurance companies. Since 2017, this Nonfinancial Information (NFI) Directive has been mandatory for capital market-oriented companies in Austria within the framework of the Sustainability and Diversity Improvement Act (NaDiVeG). In concrete terms, this means that capital market-oriented companies must publish a non-financial statement or a separate non-financial report in addition to the management report. The number of companies generating and providing non-financial information to interested users is steadily increasing around the world, while the quality of disclosure of such information is increasing. Year by year, as evidenced by numerous studies and stakeholder surveys. In Romania, green initiatives have resulted in an increase in the share of renewable energy in total energy consumption, a decrease in school dropouts, and an increase in the number of students enrolled in bachelor’s degree programs.
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Dalla Via, Nicola, and Paolo Perego. "The Relative Role of Firm Incentives, Auditor Specialization, and Country Factors as Antecedents of Nonfinancial Audit Quality." AUDITING: A Journal of Practice & Theory 39, no. 3 (February 1, 2020): 75–104. http://dx.doi.org/10.2308/ajpt-18-085.
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SUMMARY This paper examines the antecedents of nonfinancial audit quality in the novel setting of sustainability assurance (SA). We proxy SA quality by a content analysis of 1,248 publicly available SA statements issued by a panel of G500 firms in the period 2005–2013. Our findings indicate that a higher emphasis on stakeholder engagement and executive compensation schemes linked to sustainability targets are significant internal client incentives for enhanced levels of SA quality. Our study also confirms the importance of supply-side factors, such as auditor competence and auditor specialization, in explaining the heterogeneity of (nonfinancial) audit quality. SA quality appears to be further strengthened if a country's institutional environment privileges the enforcement of a legal infrastructure aimed at the protection of social and environmental dimensions of corporate practices. Our results suggest the complement view of governance mechanisms proposed by Doidge, Karolyi, and Stulz (2007) applies in this emergent nonfinancial auditing market.
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Hoag, Matthew L., and Gabriel D. Saucedo. "Disclosure and Audit Implications of Nonfinancial Measures: A Teaching Case." Current Issues in Auditing 12, no. 1 (March 1, 2018): I1—I13. http://dx.doi.org/10.2308/ciia-52147.
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SUMMARY This case introduces students to nonfinancial measures (NFMs) and encourages thoughtful consideration and discourse surrounding their reporting and use by managers and auditors. NFMs are commonly reported by companies to provide increased transparency of operations and to more effectively describe performance. External parties such as analysts and auditors make use of NFMs in performing valuation assessments, fraud risk assessments, and substantive analytical procedures. In completing this case, students will be exposed to actual NFMs disclosed in SEC filings and employ Microsoft Excel knowledge to perform foundational analytical procedures. Students will also analyze how these NFMs link to the financial statements, as well as reflect upon the implications of NFMs for both internal and external users.
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Cohen, Jeffrey R., Lori L. Holder-Webb, Leda Nath, and David Wood. "Corporate Reporting of Nonfinancial Leading Indicators of Economic Performance and Sustainability." Accounting Horizons 26, no. 1 (March 1, 2012): 65–90. http://dx.doi.org/10.2308/acch-50073.
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SYNOPSIS The call for disclosure of nonfinancial information has grown in response to the awareness that financial statements omit salient information about the company (Adams et al. 2011). This study follows earlier studies of nonfinancial disclosures of governance and corporate social responsibility information (Holder-Webb et al. 2008, 2009) and examines the public voluntary disclosure of a set of leading indicators of economic performance and sustainability of earnings provided during 2004 by a sample of 50 publicly traded firms across five industries. The results indicate that, among the sample firms, there remains a lack of rigorous and expansive disclosure of this type of information and that considerable variability exists in disclosure practice based on both industry and size. For example, companies disclose a wide variety of nonfinancial information both through mandatory filings such as 10-Ks and through alternative sources such as investor promotion materials and company websites, with the most frequent types of disclosures being concerned with information pertaining to market share and innovation. We conclude by discussing the role of this study within recent developments in integrative reporting (Adams et al. 2011) and suggest that these types of disclosures would benefit from the availability of assurance services. Data Availability: All information used in this paper is available from public sources.
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Kaspina, R. G., and N. O. Samoilova. "Audit of Non-financial Information." Accounting. Analysis. Auditing 7, no. 4 (August 26, 2020): 71–80. http://dx.doi.org/10.26794/2408-9303-2020-7-4-71-80.
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The article is devoted to the practical implementation of auditing tasks in relation to non-financial information in Russia. The increased need to develop this area of auditing services is related to both the increased interest of users in the nonfinancial information in itself, and the need to improve its reliability. The methodological base of the research includes a set of scientific techniques and research methods such as theoretical analysis of the literature on the research problem, analysis of regulatory sources, a method of comparison, as well as the use of practical experience in providing auditing services in relation to non-financial information. The study of current trends in the publication and certification of nonfinancial statements in Russia and abroad, considers the main approaches to the definition of “non-financial audit” and the most widespread methodological approaches to its implementation, as well as reviews the practice of performing tasks to confirm non-financial information and identifies the main problems of their implementation. The theoretical and practical significance of the research is to justify the need to develop tools for providing auditing services in relation to non-financial information, as well as the proposed solutions to the identified problems of practical implementation of tasks.
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Rouxelin, Florent, Wan Wongsunwai, and Nir Yehuda. "Aggregate Cost Stickiness in GAAP Financial Statements and Future Unemployment Rate." Accounting Review 93, no. 3 (October 1, 2017): 299–325. http://dx.doi.org/10.2308/accr-51939.
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ABSTRACT We examine whether aggregate cost stickiness predicts future macro-level unemployment rate. We incorporate aggregate cost stickiness into three different classes of forecasting models studied in prior literature, and demonstrate an improvement in forecasting performance for all three models. For example, when adding cost stickiness to an OLS regression that includes a battery of macroeconomic indicators and control variables, we find that a one-standard-deviation-higher cost stickiness in recent quarters is followed by a 0.23 to 0.26 percentage point lower unemployment rate in the current and following quarter. In out-of-sample tests, we find significant reductions in the root mean squared errors upon incorporation of cost stickiness for all three models. Additional tests suggest that professional macro forecasters, particularly those employed in nonfinancial industries, do not fully incorporate the information contained in cost stickiness. Finally, we find a stronger predictive power of cost stickiness toward the end of recessionary periods; we also assess cross-sectional variation of this predictive ability. JEL Classifications: M41; E24; J60.
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Liff, Roy, and Gunnar Wahlström. "Failed crisis communication: the Northern Rock Bank case." Accounting, Auditing & Accountability Journal 31, no. 1 (January 15, 2018): 237–60. http://dx.doi.org/10.1108/aaaj-08-2015-2159.
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Purpose Although granted funding from government agencies, Britain’s Northern Rock (NR) Bank experienced a depositors’ bank run in 2007. The purpose of this paper is to explore bank managers’ and the Triparties’ communications, in their failed attempt to reassure depositors during the crisis. Design/methodology/approach The paper is based on content analysis of information given to depositors by bank managers and the Triparties via mass media. The theoretical concepts of rituals and masking were utilized. Findings Results suggest that nonfinancial reporting supersedes financial reporting. Rather than hidden losses, bank regulators’ and politicians’ discussions of emergency funding for NR was the crucial incident signaling “something going on.” Even positive statements by prominent organizational actors may have signaled serious problems that compromised NR’s “business as usual” stance. Practical implications Collective action manifested in a bank run is triggered by reasons other than numbers in financial reporting. The research results indicate a need to consider how regulatory authorities act during financial crises. Originality/value Previous studies concluded that sensegivers must be consistent in framing communication to sensemakers. Sensemaking requires that the crisis communication is also consistent in the sensemakers’ framing. Because it is difficult for sensegivers to reshape the collective sensemakers’ frame, successful crisis communication requires that sensegivers change their communication to match the sensemakers’ frame, including symbolic actions. Additionally, a bank run is characterized first by loss of trust in financial reporting; second, in nonfinancial reporting; and, finally, in the sensegiving actor: a domino effect.
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Haberl-Arkhurst, Birgit, and Andrea Sternisko. "Reporting on climate-related risks and opportunities – Status quo and recommendations." Die Unternehmung 74, no. 3 (2020): 285–95. http://dx.doi.org/10.5771/0042-059x-2020-3-285.
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The pressure on companies from investors and other stakeholders to address climate change keeps increasing. On the one hand companies play a major part in the realisation of climate targets; on the other hand, many face significant climate risks. Hence it becomes a necessity to incorporate climate-related risks in their risk management procedures and their external reporting. However, reporting on climate-related risks and opportunities and especially their impact on financial statements is still in its infancy as companies struggle to follow the TCFD recommendations and define the interrelation between nonfinancial and financial performance. This is revealed by the latest PwC study on climate-related disclosure in Austrian companies’ annual reports. The authors present the results of the study and provide guidance on how to define and incorporate the respective interrelations on climate-related risks and opportunities.
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Lee, Heiwai, and Crystal J. Scott. "The Impact Of Customer Satisfaction On Chief Marketing Officers Compensation." Journal of Applied Business Research (JABR) 29, no. 1 (December 27, 2012): 35. http://dx.doi.org/10.19030/jabr.v29i1.7553.
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As an intangible marketing asset, customer satisfaction is rarely apparent on financial statements. The contribution of customer satisfaction on firm financial performance is well documented, but it is unclear whether this positive link is reflected in executive compensation. Besides, executives are often compensated for short-term financial results but the outcome of marketing actions is rarely captured in a short horizon. This research seeks to determine if the compensation of Chief Marketing Officers (CMO), who is primarily responsible for marketing outcome, is impacted by customer satisfaction. We find that customer satisfaction has a significantly positive impact on the total cash compensation of CMO and its cash and bonus components when controlling for firm performance, firm size, and innovation. Overall, our results support the inclusion of nonfinancial performance measures, specifically customer satisfaction, in designing senior marketing executive compensation packages.
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Petryk, Olena, Alla Basok, Tetiana Marenych, Natalia Yatsenko, and Sergіy Kalinichenko. "Management Report as a Component of Nonfinancial Reporting in Ukraine: Theory and Practice of Drafting." Independent Journal of Management & Production 12, no. 3 (May 1, 2021): s054—s070. http://dx.doi.org/10.14807/ijmp.v12i3.1523.
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The article covers the issue of compiling the Management Report. The need to implement a management report in Ukraine is caused by the processes of implementation of the European Union legislation on accounting in the national regulatory framework. The purpose of this report is to complement the annual financial statements with the necessary information, which should contain a reliable overview of development, activities and condition, as well as a description of the main risks and uncertainties in the work of an enterprise. This paper reviews the legislative framework for the preparation and publication of the Management Report and analyzes the Management Reports of domestic enterprises for compliance with regulatory requirements and the quality of these indicators. It has been defined that the lack of common normatively approved qualitative issues of the report and requirements for it are the significant problems. The format, scope, structure and accuracy of the information are determined at the discretion of an enterprise. The contained performance measures of enterprises significantly differ from each other and are not always given in comparison with the similar measures for the previous periods. Such presentation of data causes poor and uninformative reports. The results of the study prove that the Management Report should be based on the following principles: reliability and completeness, materiality, conciseness, integrity and comprehensibility; comparability of indicators. It is necessary to apply a risk-oriented approach and adhere the logic of presenting information with the elements of its visualization for its preparation. The study is based on the requirements of Directives 2013/34 / EU and 2014/95 / EU, the Law of Ukraine On Accounting and Financial Reporting in Ukraine, Methodological recommendations for the preparation of a management report, as well as empirical data obtained in the analysis of reports on management of Ukrainian enterprises.
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Bohutska, Liliia. "Implementing principles of transparency in business entities." Herald of Ternopil National Economic University, no. 4 (86) (December 12, 2017): 149–58. http://dx.doi.org/10.35774/visnyk2017.04.149.
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The article considers the concept of transparency, specifically transparency of financial reporting and prerequisites of transparency development. The paper also outlines areas of researching transparency within the framework of comprehensive approach. The major attributes of transparency through which the latter is implemented are as follows: qualitative characteristics of an enterprise; integrated indicators of openness of enterprise information; qualitative characteristics of information presented in financial statements and principles of providing financial statements. It is proved that transparency improves the quality of forecasts on enterprise performance, increases investment appeal and potentially acts as intangible assets that enhance the market value of an enterprise. The concept of assessment of domestic enterprises’ openness is viewed and a list of measures for enhancing enterprise transparency is proposed. The methods that are used for calculating transparency indicators of the biggest Ukrainian enterprises and published in the bulletin of the Development of Corporate Social Responsibility Centre are studied, and the given data is analysed. The three-tier system of transparency implementation is considered in terms of the regulatory and legislative framework (IFRS, International Audit Standards, International Assessment Standards, Information Disclosure Rules); business entities, where transparency is developed through reporting; analytical level of experts, agencies and organizations that assess entity transparency. The background of forming the demand for transparent financial statements is highlighted. The main characteristics of transparent statements, namely, rationality, accessibility, representativeness, reliability, efficiency, relevance, transparency, and quality are outlined. In addition, the article considers some challenges of preparing financial statements and procedures of disclosing information on enterprise performance related to financial and nonfinancial activities. The major challenges are as follows: 1) arrangement of performance indicators under the tax legislation; 2) lack of unified methods for assessing transparency of information presented in financial statements; 3) the need for common information environment; 4) corruption; 5) extra expenditures related to reporting under IFRS; 6) provision of “appropriate” indicators in order to reduce the tax base, win tenders or report to investors; 7) the trend to present indicators in response to external requirements and for making “good images” for external users.
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Pasaribu, Yuliamos Tirta Wijaya, Synthia Madya Kusumawati, and L. Jade Faliany. "ANALISIS PENGARUH FRAUD PENTAGON DALAM MENDETEKSI FRAUDULENT FINANCIAL REPORTING PADA PERUSAHAAN JASA NONKEUANGAN." Ultima Management : Jurnal Ilmu Manajemen 12, no. 1 (June 19, 2020): 104–24. http://dx.doi.org/10.31937/manajemen.v12i1.1596.
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Abstract– This research aimed at analyzing the effect of fraud pentagon proxied by nine variables, namely financial stability, personal financial needs, external pressure, financial targets, ineffective monitoring, industry characteristics, auditor changes, director changes, and frequent number of CEO’s picture towards fraudulent financial reporting proxied by Beneish M-Score at non-financial service companies listed on the Indonesia Stock Exchange (IDX) period 2015-2017. The data used were secondary data obtained from annual reports and financial statements of nonfinancial service companies period 2015-2017 with a total of 285 eligible samples. The data analysis methods used were descriptive statistical analysis and logistic regression analysis. The results showed that the variables of financial stability and the nature of the industry generated a significant and positive effect on fraudulent financial reporting. Meanwhile, the variables of personal financial needs, external pressure, financial targets, ineffective monitoring, auditor changes, director changes, and often the CEO's image were not significant to fraudulent financial reporting.
Keywords: Fraud Pentagon, Fradulent Financial Reporting, Beneish M-Score
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Barasa, Constantine, Constantine Barasa, George Achoki, and Amos Njuguna. "Managers Views on the Determinants of Cash Holdings: Evidence from Kenya." International Journal of Economics and Finance 10, no. 8 (July 24, 2018): 172. http://dx.doi.org/10.5539/ijef.v10n8p172.
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Cash is essential for firms to support their day-to-day operations, take care of uncertainties in future and to take advantage of profitable opportunities that arise. However, setting the optimal cash holding by firms is not an easy task for managers and continues to be a hotly debated subject especially after the latest development in the global financial system. Empirical evidence in Kenya on the subject is scant, and the purpose of the paper is to establish the determinants of cash holding among firms listed in Kenya’s Nairobi Securities Exchange(NSE) from a manager’s perspectives. 168 questionnaires were administered to senior and finance executives in 44 non-financial firms listed on NSE. The respondents agreed with the statements on the expected relationship between Cash holding and Interest rates and industry sector and disagreed with the constructs on size,levarage,cashflow and Market- to- book value (MTB). The results may point to some agency problem in Kenyan listed nonfinancial firms.
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Schrand, Catherine M. "Discussion: “Who Uses Interest Rate Swaps? a Cross-Sectional Analysis”." Journal of Accounting, Auditing & Finance 13, no. 3 (July 1998): 201–5. http://dx.doi.org/10.1177/0148558x9801300302.
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In recent years, there have been numerous empirical studies of derivatives use because of new data availability that resulted from requirements for annual report disclosures about derivatives activities of nonfinancial firms ( Financial Accounting Standards Board Statements Nos. 105 and 119). Many of these studies test predictions from models of optimal hedging. These models suggest that the use of derivatives to reduce volatility in cash flows is optimal, even though it is costly, when the firm faces even greater exogenous or endogenous costs associated with cash flow volatility. Each of the models assumes the existence of a capital market imperfection that makes cash flow volatility costly. A common approach to testing these models is to examine the cross-sectional variation in the characteristics of firms that use derivatives (or use more derivatives). The explanatory variables represent firm characteristics that the author predicts are related to the proposed costs of volatility that the firm can reduce by hedging.
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Zumente, Ilze, and Jūlija Bistrova. "ESG Importance for Long-Term Shareholder Value Creation: Literature vs. Practice." Journal of Open Innovation: Technology, Market, and Complexity 7, no. 2 (May 6, 2021): 127. http://dx.doi.org/10.3390/joitmc7020127.
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This article aims to detect how ESG adds value to the long-term shareholder value creation and to discover whether businesses are aware of positive ESG effects and, therefore, whether they will become more ESG-conscious. By conducting a qualitative content analysis on the academic literature, this article firstly aims to determine if shareholders’ value is positively affected by corporate ESG awareness. Secondly, to test whether companies are becoming more conscious about the importance of ESG, the mission statements of publicly listed Central and Eastern European (CEE) companies are compared to their decade-old versions. This analysis allows us to conclude on whether companies have shifted their attention to the ESG factors as a part of their purpose of existence and, therefore, for long-term shareholder value creation, which is one of the main goals of the exchange-listed enterprises. The content analysis results show that companies with higher sustainability awareness ensure shareholder value creation via improved financial performance, management quality as well as reduced risk metrics. Additionally, qualitative nonfinancial factors such as reputation, stakeholder trust, employee satisfaction and engagement provide an even more significant effect on the long-term value than the pure financial matters. The theoretical trend is found to be supported by the fact that sustainability practice and consumer-oriented keywords dominate the mission statements of CEE companies, while keywords related to shareholders and profit experienced the most significant decrease from 2012 to 2021. The present research is unique as it looks at how companies tend to become more ESG aware, integrating the sustainability perspective into their mission statements in response to the global sustainability trend.
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Sha Li, Sha Li, and Xuan Chen Sha Li. "Research on Financial Risk Crisis Prediction of Listed Companies Based on IWOA-BP Neural Network." 網際網路技術學刊 23, no. 5 (September 2022): 955–65. http://dx.doi.org/10.53106/160792642022092305004.
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<p>To avoid the risk brought by the financial crisis, the Improved Whale Optimization Algorithm-Back Propagation neural network (IWOA-BP) financial crisis early warning model is proposed. This paper selects the data from financial statements of some of the listed Chinese manufacturing companies from 2015-2019 as the research sample. First, the financial data of enterprises are screened by principal component analysis, and the early warning model is constructed from the financial and nonfinancial factors of six indicators: solvency, operating capacity, profitability, development capacity, cash flow and risk level factors. Second, the Whale Optimization Algorithm is optimized by the chaos strategy, as well as by the dynamic weight and sine cosine algorithm. Finally, the improved Whale Algorithm is optimized for BP neural network parameters. In the simulation experiments, the performance of the improved whale optimization algorithm is substantially improved. In addition, in the empirical analysis, compared to the prediction model with other algorithms, the prediction model of this paper has better results in terms of prediction accuracy.</p> <p> </p>
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Brazel, Joseph F., Keith L. Jones, and Douglas F. Prawitt. "Auditors' Reactions to Inconsistencies between Financial and Nonfinancial Measures: The Interactive Effects of Fraud Risk Assessment and a Decision Prompt." Behavioral Research in Accounting 26, no. 1 (October 1, 2013): 131–56. http://dx.doi.org/10.2308/bria-50630.
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ABSTRACT Nonfinancial measures (NFMs), such as employee headcount and production space, are operational measures that are not included on the face of the financial statements but are often disclosed elsewhere in the annual report or 10-K (e.g., in Management's Discussion and Analysis). Professional standards, auditing texts, and prior research suggest that external auditors can use NFMs to verify their clients' reported financial information and, in turn, improve audit quality. In an initial experiment where auditors develop an expectation for a client's sales balance, they generally fail to identify a seeded inconsistency between the client's sales and related NFMs. In our second experiment, where we introduce an NFM prompt and manipulate fraud risk as high and low, auditors are more likely to react to the inconsistency (i.e., rely more on inconsistent NFMs/develop expectations that reflect the client's current year decline in NFMs) when they are specifically prompted to consider the implications of NFMs and fraud risk is high (versus low). Our results suggest the following: (1) a minority of auditors use NFMs as an information source for testing and do not increase their reliance on NFMs when the NFMs point to a fraud red flag; (2) the presence of high fraud risk alone is insufficient to increase auditor consideration of inconsistent NFMs; (3) auditors are able to react appropriately to an inconsistency if they are effectively prompted; and (4) the influence of a prompt on auditor reliance on NFMs and account balance expectations is stronger when fraud risk is assessed as high. Data Availability: Data are available upon request.
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Efimova, O. V., and O. V. Rozhnova. "The Strategy for Harmonizing Financial and Non-financial Reporting on Climate Risk Disclosures. Part 1." Accounting. Analysis. Auditing 7, no. 3 (July 7, 2020): 18–25. http://dx.doi.org/10.26794/2408-9303-2020-7-3-18-25.
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The paper substantiates the need to harmonize the financial and non-financial statements of the company and to develop the corrspodig strategy in climate risks. The study assesses the impact of climate change risks on financial reporting indicators and formulates requirements for disclosing information in financial and non-financial statements. There a demand for such disclosures by investors is emphasized, as well as other interested parties, and the relevance of expanding and reorienting their contents from the task of describing the company’s environmental impact to the task of reflecting the climate impact on the company, its financial performance and strategy. The paper presents the results of a comparative analysis of the international standards` conceptual foundations for financial and non-financial reporting and shows their mutual consistency. Based on a comparative analysis of the international standards conceptual foundations, their mutual consistency has been proved, as well as there have been revealed accounting problems and disclosing information on climate risks in financial and corporate reporting. The results of the study (based on methods of logical analysis, abstraction, analogies, groupings, comparative analysis) are the key provisions formulated for developing a strategy for harmonizing financial and non-financial reporting, including climate risks. Also, there are shown recommendations for the preparation of disclosures regarding the interdependence of climate change and the results achieved with the development prospects of the company. The study may be of interest to Government bodies of the Russian Federation, relevant international organizations in the formation of standards for financial and nonfinancial reporting, interested users, as well as economic entities in the development of internal accounting and reporting standards.
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Chen, Clara Xiaoling, Ella Mae Matsumura, Jae Yong Shin, and Steve Yu-Ching Wu. "The Effect of Competition Intensity and Competition Type on the Use of Customer Satisfaction Measures in Executive Annual Bonus Contracts." Accounting Review 90, no. 1 (July 1, 2014): 229–63. http://dx.doi.org/10.2308/accr-50870.
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ABSTRACT This paper empirically examines the interactive effect of competition intensity and competition type on the use of customer satisfaction measures in executives' annual bonus contracts. Specifically, we predict a stronger association between competition intensity in an industry and the use of customer satisfaction measures in executives' annual bonus contracts when the competition is non-price-based than when the competition is price-based. Using hand-collected data from Standard & Poor's (S&P) 1500 firms' disclosures of the use of customer satisfaction measures in executive bonus contracts in 2006 and 2010 proxy statements, we find results consistent with our prediction. Our results are robust to alternative measures of competition type and competition intensity. We also find similar results when we use the weight on customer satisfaction measures in executive bonus contracts as the dependent variable. Our study extends the literature on the effect of competition on the design of managerial incentives by distinguishing between competition intensity and competition type, and providing the first large-sample empirical evidence on the joint effect of these two dimensions of competition on the incentive use of an important nonfinancial performance measure. Data Availability: Data used in this study are obtained from publicly available sources.
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Khan, Yousaf, Fakhr e. Alam Afridi, Bushra Ayaz, and Surayya Jamal. "Accounting Standards as a Moderating Stimulus on the Nexus between the Corporate Governance and Accounting Conservatism: Insights from the Emerging Market Economy." Journal of Peace, Development & Communication 6, no. 3 (September 30, 2022): 162–81. http://dx.doi.org/10.36968/jpdc-v06-i03-13.
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This study aims to investigate the moderating influence of accounting standards on the relationship between corporate governance and accounting conservatism in the financial statements of firms in the Islamic Republic of Pakistan. A sample of the seventy most active nonfinancial firms for the period 2009-2021 is used for hypothesis testing. The corporate governance mechanisms used in this study cover ownership structure, and board characteristics. Data of relevant variables have been obtained from the open door for all, PSX, and sites of SBP. Panel data methodology has been employed to ensure the influence of corporate governance on conservatism in presence of accounting standards used as a moderator. The findings of the first model (direct effect) in this study indicate that managerial ownership, Institutional ownership, board attendance, board independence, and board diversity have a significant positive association whereas, foreign ownership has a negative significant relationship with conservatism. The findings of the second model (moderating effect) show that accounting standards positively moderate the nexus of corporate governance and conservatism. The study's findings are significant for a think tank that develops policies for the corporate sector in Pakistan to focus on governance, conservative accounting principles, and accounting standards for discouraging agency problems and information asymmetry.
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Hunton, James E., Arnold M. Wright, and Sally Wright. "Continuous Reporting and Continuous Assurance: Opportunities for Behavioral Accounting Research." Journal of Emerging Technologies in Accounting 1, no. 1 (January 1, 2004): 91–102. http://dx.doi.org/10.2308/jeta.2004.1.1.91.
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The movement to more continuous reporting (CR) and continuous assurance (CA) of financial statements appears to be a matter of when and how such changes will take place, rather than if they will occur. Research evidence suggests that computing infrastructures and software applications have advanced to the point where it is now technically and economically feasible to begin preparing and disseminating financial statements on at least a monthly basis (Hunton, Wright, and Wright 2003), and someday it is likely that full or partial financial and nonfinancial disclosures will be processed and presented in real time. Additionally, information consumers are demanding, and the Securities and Exchange Commission (SEC), American Institute of Certified Public Accountants (AICPA), and International Accounting Standards Board (IASB) are contemplating reporting and assurance changes of this nature. Thus, whether “continuous” is defined in terms of monthly, daily, hourly, or real-time reporting, rapidly converging market factors indicate that in the foreseeable future firms will publish and auditors will assure financial information on a more frequent basis than the current quarterly interval. The major challenge going forward for behavioral researchers in accounting is to investigate how changes of this nature might affect the decision-making processes and consequential outcomes of various constituent groups, such as investors, preparers, and assurers. The combinations of affected parties, contexts, and tasks that could be examined are too numerous to explore in a single article. Accordingly, to keep the following discussion focused and manageable, the scope of this paper is aimed at understanding the potential impact of CR and CA on individual investors. Perhaps by identifying a number of the psychological issues and reviewing some of the studies in this area, accounting behavioral researchers will be motivated to investigate many of the issues and opportunities related to this new and exciting line of research.
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Bata, Cletus Rivaldo Dedo, and Sofian Sofian. "DO RISK MANAGEMENT DISCLOSURE AFFECT FIRM VALUE THROUGH PROFITABILITY?" JOURNAL OF ACCOUNTING, ENTREPRENEURSHIP AND FINANCIAL TECHNOLOGY (JAEF) 4, no. 1 (October 28, 2022): 47–66. http://dx.doi.org/10.37715/jaef.v4i1.3089.
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Investors are parties who determine a company’s sustainability because the funds invested by investors are a source of funds for the company. Investors do not only consider financial statements but also the nonfinancial side, namely the value of a company and how the company manages risk. The company’s value can be seen from the fair market value of the share price. If the stock price of a company is high, the value of the company is also high, thereby increasing investor confidence in investing. Therefore, this study examines the effect of enterprise risk management disclosures on firm value through profitability. The design of this research is quantitative research with hypothesis testing. The population in this study are banking companies listed on the Indonesia Stock Exchange from 2018 – 2020. The sampling technique used is purposive sampling so that a sample of 40 companies is obtained. The research period used is three years (2018 – 2020) which has total sample data is 120. The analytical method used is multiple linear regression using the SPSS version 23 application to process the data. The test results prove that the Company’s Risk Management Disclosure positively affects Firm Value and Profitability. While profitability does not affect firm value and does not have a significant impact on mediating the influence of corporate risk management on firm value.
Keywords: enterprise risk management disclosure, firm value, profitability
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Sudjiman, Lorina Siregar, and Paul Eduard Sudjiman. "THE ACCURACY OF THE SPRINGATE AND ZMIJEWSKI IN PREDICTING FINANCIAL DISTRESS IN COSMETIC AND HOUSEHOLD SUBSECTOR COMPANIES." Abstract Proceedings International Scholars Conference 7, no. 1 (December 18, 2019): 1343–58. http://dx.doi.org/10.35974/isc.v7i1.2067.
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Introduction: Bankruptcy begins with a condition of financial distress. The purpose of this study was to test and analyze the accuracy of financial distress predictions in Cosmetic and Household Subsector Companies listing on the Indonesia Stock Exchange use two models: the Springate (S-Score) model and Zmijweski model.
Method: The population in this study are companies in the Cosmetic and Household Subsector Companies listing on the Indonesia Stock Exchange which publishes audited financial statements for fiscal year 2010-2017, which amounted to 5 companies: Martina, MRAT, TCID, UNLV, and ADES. Data analysis technique used is descriptive qualitative analysis using Springate score and Zmijewski score. Model Springate with valuation criteria S> 0.862 classified as healthy company, while Zmijewski sets the criteria, if the firm's score is less than 0 (X <0), then the company goes into nonfinancial distress (healthy).
Result: From the analysis of financial distress used the S-Score Springate model on Cosmetic and Household Subsector Companies in 2010-2017, companies experiencing distress condition of 21.57%. From the second model used a Zmijweski model, the entire enterprise in good condition. Thus, the accurate prediction method for Cosmetic and Household Subsector Companies registered in Indonesia is the Zmijweski models.
Discussion: The issue of effectiveness in carrying out the company's operational activities must be payed attention both from sales activities, purchases and other activities, so that reduce the decline in corporate profits. However, based on the overall average value the five companies showed healthy conditions.
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Huang, Ting-Chiao, Hua-Wei Huang, and Chih-Chen Lee. "Corporate executive’s gender and audit fees." Managerial Auditing Journal 29, no. 6 (May 27, 2014): 527–47. http://dx.doi.org/10.1108/maj-03-2013-0837.
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Purpose – The purpose of this study is to investigate the association between a corporate executive’s gender and audit fees. Based on the findings of extant research that there are gender-based differences that may have implications for the financial reporting process, the authors posit an association between CEO gender and audit fees. Design/methodology/approach – The authors test their hypothesis by performing both univariate and multivariate regression analyses on a sample of 8,402 Compustat firm-year observations from US firms for 2003-2010. Findings – The authors' findings indicate that firms with female CEOs are associated with higher audit fees. Their results hold after controlling for self-selection bias and factors shown by prior studies to be associated with audit fees. Research limitations/implications – Although the authors control for factors that would increase audit fees, their study is limited by the degree to which higher audit fees reflect higher quality audits. Also, because their sample is from large publicly traded nonfinancial firms, their results may not be applicable to other types of firms. The authors study has implications for policy setting because their findings provide some evidence of a significant association between a CEO characteristic (gender) and financial reporting quality. Their findings, thus, provide some support for the Securities and Exchange Commission requirement that CEOs should certify their firm’s financial statements. Originality/value – The authors study contributes to the audit fees and corporate governance literature by providing empirical evidence of an association between audit fees and CEO gender. To their knowledge, no study, to date, has investigated this association.
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de Lotbiniere-Bassett, Madeleine P., Jay Riva-Cambrin, and Patrick J. McDonald. "Conflict of interest policies and disclosure requirements in neurosurgical journals." Journal of Neurosurgery 131, no. 1 (July 2019): 264–70. http://dx.doi.org/10.3171/2018.4.jns172751.
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OBJECTIVEAn increasing amount of funding in neurosurgery research comes from industry, which may create a conflict of interest (COI) and the potential to bias results. The reporting and handling of COIs have become difficult, particularly as explicit policies themselves and definitions thereof continue to vary between medical journals. In this study, the authors sought to evaluate the prevalence and comprehensiveness of COI policies among leading neurosurgical journals.METHODSThe authors conducted a cross-sectional study of publicly available online disclosure policies in the 20 highest-ranking neurosurgical journals, as determined by Google Scholar Metrics, in July 2016.RESULTSOverall, 89.5% of the highest-impact neurosurgical journals included COI policy statements. Ten (53%) journals requested declaration of nonfinancial conflicts, while 2 journals specifically set a time period for COIs. Sixteen journals required declaration from the corresponding author, 13 from all authors, 6 from reviewers, and 5 from editors. Four journals were included in the International Committee of Medical Journal Editors (ICMJE) list of publications that follow the Uniform Requirements for Manuscripts Submitted to Biomedical Journals (currently known as Recommendations for the Conduct, Reporting, Editing, and Publication of Scholarly Work in Medical Journals). Five journal policies included COI declaration verification, management, or enforcement. The neurosurgery journals with more comprehensive COI policies were significantly more likely to have higher h5-indices (p = 0.003) and higher impact factors (p = 0.01).CONCLUSIONSIn 2016, the majority of, but not all, high-impact neurosurgical journals had publically available COI disclosure policies. Policy inclusiveness and comprehensiveness varied substantially across neurosurgical journals, but COI comprehensiveness was associated with other established markers of individual journals’ favorability and influence, such as impact factor and h5-index.
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Plumlee, R. David, and Marlene A. Plumlee. "Assurance on XBRL for Financial Reporting." Accounting Horizons 22, no. 3 (September 1, 2008): 353–68. http://dx.doi.org/10.2308/acch.2008.22.3.353.
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SYNOPSIS: Since 2004, the Securities and Exchange Commission (SEC) has taken steps toward requiring eXtensible Business Reporting Language (XBRL) to be used in its filings, including a voluntary filing program. “Tagging” financial information using XBRL creates documents that are computer readable and searchable. Once XBRL is required, investors are likely to demand assurance on the tagging process. The Public Company Accounting Oversight Board (PCAOB) has issued guidance on attest engagements regarding XBRL financial information furnished under the SEC’s current voluntary filer program, which relies on the auditor “agreeing” a paper version of the XBRL-related documents to the information in the official EDGAR filing. This approach may be adequate for the current paper-oriented reporting paradigm. However, once filing in XBRL becomes required, the power of XBRL to allow individual financial datum to be extracted from the SEC’s financial database will be realized. This “data-centric” idea is a crucial extension of the traditional reporting paradigm that will alter the way financial and nonfinancial data can be used. The current audit focus on reconciling only the XBRL output with the paper submissions does not address this paradigm shift. In this commentary, we discuss the SEC’s efforts to incorporate XBRL into its filing process and provide a brief overview of the technical aspects of XBRL. The commentary’s principal focus is on several important questions that assurance guidance must address in a data-centric reporting environment, such as, what constitutes an error, or what does materiality mean when individual pieces of financial data will be used outside the context of the financial statements? It also describes some XBRL-related areas where academic research can help guide XBRL-document assurance efforts.
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Ibrahimov, Zohrab, Sakina Hajiyeva, Vuqar Nazarov, Azar Mazanov, and Jalil Baghirov. "Quality and Innovations in the Financial Reporting as a Way to Increase Attractiveness for Institutional Investors." Marketing and Management of Innovations 2, no. 1 (2022): 244–54. http://dx.doi.org/10.21272/mmi.2022.2-22.
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At the present stage of global development there is a transition from understanding the financial statements of enterprises not only as a source of quantitative indicators of the company's development but also as a reputable tool for its reliability and readiness for transparent relations with counterparties. Investment decision-making has always been characterized by balancing profitability and reliability of capital investment. Accordingly, this requires increasing emphasis on the quality and complexity of companies' financial reporting, allowing you to maximize the amount of information provided to potential investors. The article aims to test the hypothesis about the impact of qualitative characteristics of financial reporting on the attractiveness of companies to investors. The study analyzes the evolution of financial reporting, the causes and consequences of innovative approaches to its preparation, and the dissemination of national and international standards. The second stage of the analysis involves modeling the impact of financial reporting and investment attractiveness of enterprises at the national level through economic and mathematical modeling (the specificity of the model is determined by testing the quantitative input data). According to the results of the study of financial reporting quality indicators, the general parameter is the strength of auditing and reporting standards, which the World Economic Forum assesses based on a survey of business leaders. Indicators of the country's investment attractiveness calculated by the World Bank's global statistical base were chosen as dependent variables. Calculations are performed on panel data for a sample of more than 20 countries (Azerbaijan, Belgium, Bulgaria, Canada, China, Czech Republic, Germany, Spain, Estonia, Georgia, Ghana, Greece, Hungary, India, Israel, Italy, Japan, Kazakhstan, Lithuania, Morocco, Mexico, Mongolia, New Zealand, Romania, Turkey, United States) over ten years. The obtained results of calculations are the basis for finding ways to improve further the quality of financial and nonfinancial disclosure of companies to increase their competitiveness in the investment market.
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Abdoli, Mohammadreza. "RELATION OF NON EXECUTIVE DIRECTORS AND OWNERSHIP CONCENTRATION WITH DISCRETIONARY ACCRUAL ACCOUNTING." Australian Journal of Business and Management Research 01, no. 04 (November 17, 2011): 93–101. http://dx.doi.org/10.52283/nswrca.ajbmr.20110104a10.
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In this study we consider the relationship and the effect of performance of non executive directors and ownership concentration on earnings manipulation by company's managers. On the basis of governance rule and also Iran business rule, the companies in Tehran stock exchange should abide about the combination of the board and also interrelated committee and protect minority stockholders against majority. In order to do this research, the information of the companies in financial statements and the reports of the Tehran stock exchange have been used. For the measurements of the earnings smoothing John's adjusted model has been used and for the measurement of the concentration of company's ownership "Herfindal" and "Hireshman" has been used. The choice of the companies is randomly and the confidence interval has been considered %95 .For research , observe 435 corporation- year and time period is 2005 – 2010. The results of the research reveal don't meaningful relationship of non executive directors and discretionary accrual accounting and the relationship is a positive. In companies which the concentration of ownership is high, management and earnings manipulation is also high and has a meaningful relationship and negative with these variables. The segregation of the companies into government and private causes to different the results. In private companies the concentration of the ownership is little and the statistical mean of discretionary accrual accounting items is low and non executive directors ratio is low but in governmental corporations statistical mean of discretionary accrual accounting item is high and ratio of corporations that has internal auditing is high to private corporations . Further more almost of non executive directors in Iranian corporation have nonfinancial technique and knowledge and ratio of them in board corporation is higher than executive directors.
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Steblyanskaya, A. N., Zhen Wang, and Z. V. Bragina. "Financial Sustainable Growth Theory as a Result of Interaction with Energy, Environmental and Social Processes (Evidence from Oil and Gas Industry)." Finance: Theory and Practice 23, no. 2 (May 4, 2019): 134–52. http://dx.doi.org/10.26794/2587-5671-2019-23-2-134-152.
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The research is based on the materials of the largest oil and gas companies in Russia and China, whose total production in each country exceeds 86%. The authors used indicators that are available to the world statistics and relate to the system of sustainable financial growth in Russia and China from 1996 to 2016. The aim of the article is to study the impact of investments in personnel social welfare, energy efficiency and environmental protection on sustainable financial growth of the oil and gas industry. The research objectives are to develop a theory of sustainable financial growth in the oil and gas industry, as well as its assessment and forecasting tools. The authors use the methods of statistical analysis of financial, social, energy and environmental coefficients, and mathematical modeling. They propose a new methodology for calculating the index of the financial sustainable growth system. The authors substantiate the composition and the structure of the sustainable financial growth system of oil and gas companies in Russia and China, as well as the composition of the economic processes that influence or predetermine this growth. The relationship between the subsystem indicators were analyzed in the article. The article substantiates the index of the sustainable financial growth system of oil and gas companies in Russia and China. The authors developed a model for calculating the index of the sustainable financial growth system in the AnyLogic program. The results of the study showed that the factors of the “energy efficiency” and “social subsystem” subsystems affect financial sustainable growth in Russian oil and gas companies, but the financial subsystem is least dependent on the “environment” subsystem. The situation in Chinese oil and gas companies is the opposite: the financial sustainable growth is mostly affected by the factors of the “environment” and “energy efficiency” subsystems. The financial subsystem is least connected with the subsystem of personnel social welfare. Nevertheless, the study proves that in the oil and gas companies in both countries, nonfinancial indicators (each country has its own block) have a positive effect on the financial sustainable growth. According to the authors, the main conclusion is to consider social, energy and environmental indicators that have the strongest influence on the financial sustainable growth in the company’s financial statements. The developed AnyLogic model can be used to predict the index of the sustainable growth system and its management. The results of the study are recommended for the oil and gas corporations of China.
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Bahrul Ilmi, Muhammad. "The analysis of the effect of Islamic financing and labor relationship development toward nonperforming financing in Islamic banks." Journal of Islamic Accounting and Business Research 9, no. 4 (July 9, 2018): 648–60. http://dx.doi.org/10.1108/jiabr-02-2015-0002.
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Purpose The purpose of this study is to examine the effect of Islamic financing (IF) and labor relationship development (LRD) toward nonperforming financing (NPF) in Islamic banks. This research aims to identify the connection between IF products and the practice of loan officers building a relationship with loan customers (also known as LRD) and its influence on NPF. Design/methodology/approach This study uses a quantitative field research that emphasizes upon analysis of numerical data which are processed with statistical methods. Furthermore, the source is secondary data from financial statements of Islamic banks such as annual reports or financial disclosures. These sources of data are used to examine NPF facilities from 2008 to 2012. Moreover, primary data collected via questionnaire are used to investigate IF and LRD. The banks where the study was conducted are: Bank Muamalat Indonesia and Bank Danamon Shari’ah in Surakarta, Indonesia. The population in this study is 15 employees who work as account officers in Bank Muamalat Indonesia and Bank Danamon Shari’ah. The techniques of data collection in this study are documentation, questionnaires and literary study. In this study, the data analysis technique was multiple regression analysis and examination using SPSS version 21. These methods were used for analyzing the effect of IF and LRD toward NPF. Findings IF has a significant effect on NPF. In contrast, the LRD has no effect on NPF in Islamic banks. In addition, both IF and LRD simultaneously had an effect on NPF in Islamic banks. Research limitations/implications This study does not cover all Islamic banks in Surakarta because of limited data; thus, in future research, the sample size could be increased by including all Islamic banks in Surakarta, Indonesia. Furthermore, this study does not take into consideration the fact that IF includes product financing. For future studies, the population and samples should be improved and take into consideration that product financing does exist in Islamic banks; moreover, future studies could provide other variables which are appropriate for current studies. Originality/value The results support the recommendation for Islamic banks in Surakarta to enhance the capability of employees to develop their knowledge in IF. Because the performance of a bank does not only depict financial performance but also nonfinancial performance such as services, knowledge and employees’ performance.
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Quattrone, Paolo. "Seeking transparency makes one blind: how to rethink disclosure, account for nature and make corporations sustainable." Accounting, Auditing & Accountability Journal ahead-of-print, ahead-of-print (September 16, 2021). http://dx.doi.org/10.1108/aaaj-04-2021-5233.
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PurposeFinancial and nonfinancial disclosures are still anchored to conventional notions of transparency, whereby corporations “push” information out to various stakeholders. Such information is now “pulled” from various sources and addresses aspects of corporate behavior that go well beyond those envisioned by the disclosure framework. This shift makes notions of values, measurement and accountability more fragmented, complex and difficult. The paper aims to bring the accounting scholarly debate back to what and how transparency can be achieved especially in relation to issues of social inequality and sustainability.Design/methodology/approachAfter an analysis of the limitations of current approaches to disclosure, the paper proposes a shift toward normative policies that profit of years of critique of positivism.FindingsDrawing on the notion of value-added, the paper ends with a new income statement design, labeled as Value-Added Statement for Nature, which recognizes Nature as a further stakeholder and forces human stakeholders to give voice, or at least acknowledge the lack of voice, for non-human actors.Originality/valueThe author proposes a shift in the perspective, practice and institutional arrangements in which disclosure occurs. Measurement and transparency need to happen in communication exercises, which do not presuppose what needs to be made transparent once and for good but define procedures on how to make fragmented, complex, multiple and volatile notions of value transparent. Income statements and accounting more in general is to be reconceived as a platform where stakeholders will have to continuously negotiate what counts as the common good in the interest of all, including Nature.
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Rozario, Andrea M., Miklos V. Vasarhelyi, and Tawei (David) Wang. "Using Consumer Tweets to Improve Revenue Risk Assessments in Consumer-Oriented Industries." Current Issues in Auditing, November 14, 2022. http://dx.doi.org/10.2308/ciia-2022-027.
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This article summarizes the study of Rozario, Vasarhelyi, and Wang (2022), which examines the use of consumer tweets in improving the prediction and error detection performance of preliminary analytical procedures for the revenue account for firms that belong to consumer-oriented industries. They find that consumer tweets about product or brand interest increase the prediction and error detection ability of analytical procedures compared to analytical procedures that do not include it. These results suggest that this new source of external nonfinancial information is incrementally informative to auditors in developing assessments for the risk of misstated revenue in the planning stage of the audit. The findings of this study have important implications that may be relevant to the audits of other financial statement accounts.
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Srbinoska, Dusica Stevcevska, and Igor Srbinoski. "A study on audit report timeliness: The Macedonian Stock Exchange." International Journal of Management and Economics, September 7, 2021. http://dx.doi.org/10.2478/ijme-2021-0015.
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Abstract Financial statements reflect important information about the entity's financial position, operating performance, and cash flows and must be made available in a timely fashion to all interested factions to stimulate opportune business judgments. Ergo, this paper examines the association of the audited annual report delay with eight entity and audit firm attributes. The sample includes 396 observations of 99 nonfinancial firms listed on the Macedonian Stock Exchange (MSE) for the period 2014–2017. The regression results designate a statistically significant relationship between the audit opinion, company liquidity, size, and industry with the audit opinion lag. Moreover, the publication period ranges from 43 days to 374 days suggesting that timeliness may be a significant concern for Macedonian entities regarding financial reporting policy. This is the first study to thoroughly assess the relationship between entity, auditor characteristics, and audit report timeliness on the developing Macedonian market.
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Abdi, Shima, and Afsaneh Soroushyar. "The effect of anti-money laundering regulations on earnings management: evidence of Iran." Journal of Financial Reporting and Accounting, November 28, 2022. http://dx.doi.org/10.1108/jfra-04-2022-0119.
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Purpose The purpose of this study is to examine the impact of anti-money laundering (AML) regulations on accrual earnings management (AEM) and real earnings management (REM) in Iran’s emerging capital market. Design/methodology/approach The panel data regression is used to testing hypotheses. The sample includes 2,020 data and 202 companies listed on the Tehran Stock Exchange (TSE) over a period of ten years from 2012 to 2021. Also, the companies covered in this study include financial and nonfinancial companies. Furthermore, the data related to the research variables were extracted from the annual financial statements and the TSE database. Findings The results show that compliance with AML regulations leads to a reduction in AEM and REM. In other words, companies with higher money laundering (ML) tend to manage their earnings, which is in line with agency theory. Practical implications This study has implication for policymakers and regulators, auditors and managers. Considering the negative impact of AML regulations on earnings management (EM), Iranian auditing firms need to emphasize on the full implementation of AML regulations in TSE. Also, the results of this research may aid policymakers and regulators to detect financial crimes through accounting signals. Originality/value To the best of the authors’ knowledge, this is the first study in an Iran capital market to examine the impact of AML regulations on EM in financial and nonfinancial companies. Previous research has not controlled for the effects of financial companies. Prior studies have not examined the effects of financial companies. In addition, this study differentiates itself from previous studies by introducing a new method for measuring the independent ML variable based on auditor opinions. The obtained data can aid international bodies to better understand compliance with ML regulations in Iran and can reduce their concerns in negotiations.
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Ojera, Patrick, and Collins Otieno Odoyo. "Current State of Sustainability Reporting: A Case of Public Universities in Western Kenya." European Journal of Business and Management Research 5, no. 2 (April 13, 2020). http://dx.doi.org/10.24018/ejbmr.2020.5.2.295.
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Corporate sustainability reporting, also known as Triple-bottom-line reporting, involves reporting nonfinancial and financial information to a broader set of stakeholders than just shareholders and seek to fortify an organization’s ability to manage key risks. The current case is that, the quality, rigor, and utility of sustainability reporting remains contentious with concerns about the suitability of the criteria or standards used to prepare the reports. Despite the rapid increase in the number of companies around the world adopting Global Reporting Initiative standards, little is known about the extent of practice of corporate sustainability reporting in public universities in Kenya. The study selected five universities that had their 2017-18 audited financial reports available online for the readers, which served as the main source of secondary data. The guidelines on corporate sustainability reporting was derived from literature review, which provided key indicators upon which the data from each university was evaluated. It was observed that almost all the institutions recognize the critical role of both internal and external independent audit of financial statements. In conclusion, financial reporting sustainability is guided by strict compliance to the factors of sustainability.
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Harimaya, Kozo, and Koichi Kagitani. "Efficiency, and economies of scale and scope in Japanese agricultural cooperatives." Journal of Economic Structures 11, no. 1 (October 25, 2022). http://dx.doi.org/10.1186/s40008-022-00282-8.
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AbstractThe purpose of this study is to investigate regional differences in the business characteristics of Japanese agricultural cooperatives (JAs), which have been widely criticized for depending on non-agricultural activities, contradictory to cooperative principles. We construct a panel data set over 2004–2019 from the financial statements of JAs’ prefectural-level federations and use a stochastic meta-frontier cost function model, which enables the decomposition of meta-frontier efficiency into two components: technical efficiency and technology gap ratios. The operational differences between JAs in urban and rural areas are investigated by comparing their efficiency and economies of scale and scope. The main results are summarized as follows: first, the meta-cost efficiency scores of JAs in urban areas are, on average, larger than those in rural areas, which reflects the differences in technology gap ratios. Second, JAs exhibit overall economies of scale in both areas; however, the product-specific economies of scale differ between financial and nonfinancial outputs. Finally, JAs in rural areas exhibit relatively larger economies of scope than those in urban areas. These findings indicate clear distinctions between urban and rural areas in cost-reduction effects. Finally, financial activities bring higher efficiency for JAs in urban areas, while benefits from simultaneous production are larger for those in rural areas.
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Signorelli, Thiago, Carlos Heitor Campani, and César Neves. "Direct approach to assess risk adjustment under IFRS 17." Revista Contabilidade & Finanças 33, no. 90 (2022). http://dx.doi.org/10.1590/1808-057x20221646.en.
Full textAbstract:
ABSTRACT This paper aims to develop a method that can be adopted by insurers to assess the risk adjustment for nonfinancial risks (RA) required by International Financial Reporting Standards 17 (IFRS 17). Unlike other methods, the method proposed here directly returns the RA for each liability related to a group of insurance contracts: remaining coverage and incurred claims. Moreover, each portion of the RA is correctly allocated to the corresponding actuarial liability, which constitutes an advantage over other methods. The method follows IFRS 17 directives and contributes to standardize accounting practices of insurers around the world, thus increasing the degree of comparability between financial statements in different jurisdictions. This paper should be relevant for insurance companies, for insurance market supervisors and regulators, as well as for practitioners in general. The method takes advantage of the collective risk theory and of the Monte Carlo simulation technique to adjust probability distributions used to calculate two different loading factors that, when applied to the carrying amount of unearned premiums and to the expected present value of incurred claims, directly return the RA for each liability related to a group of insurance contracts: remaining coverage and incurred claims. Our results show that, for large-scale portfolios, the central limit theorem holds and the distributions used to assess the loading factors can be well approximated by the normal distribution. Additionally, the values obtained for each loading factor are small, which means that the RA is relatively low when compared to the carrying amount of unearned premiums and to the expected present value of incurred claims. This result is in line with the law of large numbers, which states that, for large-scale portfolios, the risk borne by the insurer becomes considerably lower, since it is easier to predict the behavior of aggregate future claims.