Pub Date : 2022-12-30DOI: 10.24818/jamis.2022.04002
A. Bratu
Research Questions: To what extent do the various corporate reporting channels, documents, and instruments incorporate the issues identified in the literature as affecting human capital? Which aspects are taken into account by Romanian healthcare companies regarding the reporting of human resources management practices? Motivation: Given the commitment of companies to sustainable development, the requirements for enhancing the reporting of human resource management practices have increased. In addition to the specific responsibilities of economic entities that are required to publish periodic financial statements, this study is particularly relevant to human resource management practices in Romanian companies. In this study, the focus is on companies in the healthcare sector, an industry sensitive to the events that have occurred in recent times. Idea: This study explores the defining elements of human resources management awareness and behaviour. The main objective of the research is to analyse the area of human resource information reporting in six companies in the healthcare or pharmaceutical sector and its debate in the context of different company characteristics. Data: To achieve the proposed objective, data from the annual reports were collected for 2021 for six Romanian companies listed on the Bucharest Stock Exchange. Tools: The extracted information is analysed through a critical interpretation to identify and analyse the level of reporting. In this study, the collected data was critically analysed based on empirical and archival sources to understand human resources reporting practices. All data used in this study were manually collected. Findings: The results of this research show that there is an interest in transparency of human resources information, but some variables should be improved or, where appropriate, added to the report. The most detailed information found is related to the reporting of descriptive company characteristics such as profitability and company size , and the least detailed is the information that belongs to the human resource category such as employment of people with disabilities and employment of women. Contribution: This paper contributes to research on companies' human resources reporting practices by identifying what is included in the annual report and analysing it through the lens of the transparency with which companies treat these practices.
{"title":"Content analysis of human resources management reporting practices in Romanian health industry","authors":"A. Bratu","doi":"10.24818/jamis.2022.04002","DOIUrl":"https://doi.org/10.24818/jamis.2022.04002","url":null,"abstract":"Research Questions: To what extent do the various corporate reporting channels, documents, and instruments incorporate the issues identified in the literature as affecting human capital? Which aspects are taken into account by Romanian healthcare companies regarding the reporting of human resources management practices? Motivation: Given the commitment of companies to sustainable development, the requirements for enhancing the reporting of human resource management practices have increased. In addition to the specific responsibilities of economic entities that are required to publish periodic financial statements, this study is particularly relevant to human resource management practices in Romanian companies. In this study, the focus is on companies in the healthcare sector, an industry sensitive to the events that have occurred in recent times. Idea: This study explores the defining elements of human resources management awareness and behaviour. The main objective of the research is to analyse the area of human resource information reporting in six companies in the healthcare or pharmaceutical sector and its debate in the context of different company characteristics. Data: To achieve the proposed objective, data from the annual reports were collected for 2021 for six Romanian companies listed on the Bucharest Stock Exchange. Tools: The extracted information is analysed through a critical interpretation to identify and analyse the level of reporting. In this study, the collected data was critically analysed based on empirical and archival sources to understand human resources reporting practices. All data used in this study were manually collected. Findings: The results of this research show that there is an interest in transparency of human resources information, but some variables should be improved or, where appropriate, added to the report. The most detailed information found is related to the reporting of descriptive company characteristics such as profitability and company size , and the least detailed is the information that belongs to the human resource category such as employment of people with disabilities and employment of women. Contribution: This paper contributes to research on companies' human resources reporting practices by identifying what is included in the annual report and analysing it through the lens of the transparency with which companies treat these practices.","PeriodicalId":14716,"journal":{"name":"Journal of Accounting and Management Information Systems","volume":"30 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-12-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75958126","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-12-30DOI: 10.24818/jamis.2022.04006
Souha Ben Gamra, Fadhila Hamza, Hela Borgi
Purpose: The purpose of this paper is to investigate the impact of the International Financial Reporting Standards (IFRS) adoption and corporate governance mechanisms (e.g., Board characteristics and Audit Committee (AC) characteristics) on Audit Report Lag (ARL) in an emerging country, named Saudi Arabia. Methodology: We use a sample of 616 firm-year observations from the Tadawul Stock Exchange in Saudi Arabia for the period 2016-2019. Panel regressions were used. Findings: The results indicate that ARL has significantly increased after the IFRSs' adoption. This result may imply that IFRS adoption leads to a need of adaptation process. It may support the need for more training and IFRS education in Saudi Arabia. Additionally, both AC diligence and AC financial expertise significantly reduce ARL. It may support the Saudi regulatory requirement to equip audit committees with at least one member with accounting and financial expertise. However, the results show that AC size and Board characteristics (board size, board independence and board meetings) are not significantly associated with ARL. Contribution: Our study fills the gap in the existing literature by examining the impact of the IFRSs' adoption and the corporate governance characteristics on ARL, whose results remain mixed and rare in Saudi Arabia, an emerging and under-studied context.
{"title":"The impact of IFRS adoption and corporate governance mechanisms on audit report lag: evidence from an emerging country","authors":"Souha Ben Gamra, Fadhila Hamza, Hela Borgi","doi":"10.24818/jamis.2022.04006","DOIUrl":"https://doi.org/10.24818/jamis.2022.04006","url":null,"abstract":"Purpose: The purpose of this paper is to investigate the impact of the International Financial Reporting Standards (IFRS) adoption and corporate governance mechanisms (e.g., Board characteristics and Audit Committee (AC) characteristics) on Audit Report Lag (ARL) in an emerging country, named Saudi Arabia. Methodology: We use a sample of 616 firm-year observations from the Tadawul Stock Exchange in Saudi Arabia for the period 2016-2019. Panel regressions were used. Findings: The results indicate that ARL has significantly increased after the IFRSs' adoption. This result may imply that IFRS adoption leads to a need of adaptation process. It may support the need for more training and IFRS education in Saudi Arabia. Additionally, both AC diligence and AC financial expertise significantly reduce ARL. It may support the Saudi regulatory requirement to equip audit committees with at least one member with accounting and financial expertise. However, the results show that AC size and Board characteristics (board size, board independence and board meetings) are not significantly associated with ARL. Contribution: Our study fills the gap in the existing literature by examining the impact of the IFRSs' adoption and the corporate governance characteristics on ARL, whose results remain mixed and rare in Saudi Arabia, an emerging and under-studied context.","PeriodicalId":14716,"journal":{"name":"Journal of Accounting and Management Information Systems","volume":"49 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-12-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82925515","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-01DOI: 10.24818/jamis.2022.03001
Mahmoud Elmarzouky, K. Hussainey, Tarek Abdelfattah
Research Question: This paper aims to answer whether the Key Audit Matters (KAMs) Signaling Corporate Bankruptcy and investigate auditor responsibility versus the lack of auditing standards, and examine whether the disclosure of the KAMs by independent auditors enhances the prediction of corporate bankruptcy and the extent to which the KAMs reduce the information asymmetry between firm managers and shareholders. Motivation: We analyse the risk topics in the annual reports, then the KAMs highlighted by the auditor and then the KAMs are disclosed by adopting a case study approach. Data: We use a single descriptive case study approach and read the relative academic and professional literature to explore the KAMs included in the auditors' reports before the Thomas Cook Group Plc bankruptcy. Findings: We find no significant predicting power of KAMs disclosed by Ernst & Young (EY) on Thomas Cook's annual reports. We found that the auditor is not responsible for indicating financial failure. Contribution: We suggest that the regulators and the accounting boards adopt more restrictive standards and improve the International Standards on Auditing (ISA) 701. Furthermore, attention should be focused on the reliability of KAMs specified in ISA 701. We conclude that the KAMs are ineffective in disclosing bankruptcy risk. Our paper concludes that the current auditing standards should be more instructive in preventing corporate bankruptcy. We contribute to the literature in a unique and core research area not researched previously.
{"title":"Do key audit matters signal corporate bankruptcy?","authors":"Mahmoud Elmarzouky, K. Hussainey, Tarek Abdelfattah","doi":"10.24818/jamis.2022.03001","DOIUrl":"https://doi.org/10.24818/jamis.2022.03001","url":null,"abstract":"Research Question: This paper aims to answer whether the Key Audit Matters (KAMs) Signaling Corporate Bankruptcy and investigate auditor responsibility versus the lack of auditing standards, and examine whether the disclosure of the KAMs by independent auditors enhances the prediction of corporate bankruptcy and the extent to which the KAMs reduce the information asymmetry between firm managers and shareholders. Motivation: We analyse the risk topics in the annual reports, then the KAMs highlighted by the auditor and then the KAMs are disclosed by adopting a case study approach. Data: We use a single descriptive case study approach and read the relative academic and professional literature to explore the KAMs included in the auditors' reports before the Thomas Cook Group Plc bankruptcy. Findings: We find no significant predicting power of KAMs disclosed by Ernst & Young (EY) on Thomas Cook's annual reports. We found that the auditor is not responsible for indicating financial failure. Contribution: We suggest that the regulators and the accounting boards adopt more restrictive standards and improve the International Standards on Auditing (ISA) 701. Furthermore, attention should be focused on the reliability of KAMs specified in ISA 701. We conclude that the KAMs are ineffective in disclosing bankruptcy risk. Our paper concludes that the current auditing standards should be more instructive in preventing corporate bankruptcy. We contribute to the literature in a unique and core research area not researched previously.","PeriodicalId":14716,"journal":{"name":"Journal of Accounting and Management Information Systems","volume":"48 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81513481","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-01DOI: 10.24818/jamis.2022.03006
Sameh Kobbi-Fakhfakh, Fatma Driss
Research Question: Does public country by country reporting (CbCr) deter multinationals' tax avoidance practices operating in extractive industries? Motivation: Public CbCr has already been implemented for two specific sectors, namely the financial and extractive sectors. Prior studies have focused on tax avoidance of EU banks around the implementation of public CbCr requirement (Joshi et al., 2020; Eberhartinger et al., 2020; Overesch & Wolff, 2021). However, studies on how resource-extracting multinationals respond to the CbCr regulation are scarce. This study seeks to fill this gap by examining the effect of public CbCr on tax avoidance with a special focus on extractive industries. Idea: To improve fiscal transparency, Canadian and European legislators have adopted regulations requiring multinational corporations (MNCs) to provide, annually, their Extraction Payment Disclosures (EPD) (Public CbCr standard for extractive industries) to governments (EC, 2013; Natural Resource Canada, 2014). This study examines the effect of mandatory EPD adoption on the extent of tax haven use. Data: For a 10-year period surrounding the mandatory EPD adoption (2010-2019), we selected a sample of UK MNCs operating in the oil, gas, and mining sectors and listed on the London Stock Exchange. The analysis is mainly based on firm-level information taken from DATASTREAM database. Based on hand-collected data from annual reports, we measured the extent of tax haven use using the percentage of multinational subsidiaries located in tax haven jurisdictions/countries as listed in Dyreng and Lindsey (2009). An alternative list identified by the Organization for Economic Co-operation and Development (OECD) (2006) was also used in a robustness test. Tools: To examine our research question, we estimated a linear regression model with panel data using STATA software. Findings: The results show that the increased transparency resulting from public EPD does not appear to significantly affect the intensity of tax haven use. Contribution: This study extends and complements prior literature examining the effect of CbCr on tax avoidance and profit shifting by focusing on a specific setting i.e. extractive sector. To the best of our knowledge, apart from Johannesen and Larsen (2016) and Rauter (2020), no studies have provided empirical evidence on how resource-extracting multinationals respond to the EPD regulation.
研究问题:国别公开报告(CbCr)能否阻止跨国公司在采掘业的避税行为?动机:公共CbCr已经在两个特定行业实施，即金融和采掘行业。先前的研究主要集中在欧盟银行围绕实施公共CbCr要求的避税问题上(Joshi等人，2020;Eberhartinger et al.， 2020;Overesch & Wolff, 2021)。然而，关于资源开采跨国公司如何应对CbCr监管的研究却很少。本研究试图通过考察公共CbCr对避税的影响来填补这一空白，并特别关注采掘业。想法:为了提高财政透明度，加拿大和欧洲的立法者已经通过了法规，要求跨国公司(MNCs)每年向政府提供其采掘付款披露(EPD)(采掘行业的公共CbCr标准)(EC, 2013;加拿大自然资源部，2014)。本研究考察了强制性采用环境保护措施对避税天堂使用程度的影响。数据:在强制性采用EPD的10年期间(2010-2019年)，我们选择了在伦敦证券交易所上市的英国石油、天然气和采矿行业的跨国公司样本。分析主要基于从DATASTREAM数据库中获取的公司级信息。根据从年度报告中手工收集的数据，我们使用Dyreng和Lindsey(2009)中列出的避税天堂管辖区/国家的跨国子公司的百分比来衡量避税天堂的使用程度。经济合作与发展组织(OECD)(2006)确定的替代列表也用于稳健性检验。工具:为了检验我们的研究问题，我们使用STATA软件估计了面板数据的线性回归模型。研究结果表明，公共环境保护所带来的透明度的增加似乎并没有显著影响避税天堂的使用强度。贡献:本研究扩展并补充了先前研究CbCr对避税和利润转移影响的文献，重点研究了一个特定的环境，即采掘业。据我们所知，除了Johannesen和Larsen(2016)和Rauter(2020)之外，没有研究提供关于资源开采跨国公司如何应对epa法规的经验证据。
{"title":"Mandatory extraction payment disclosures and tax haven use: Evidence from United Kingdom","authors":"Sameh Kobbi-Fakhfakh, Fatma Driss","doi":"10.24818/jamis.2022.03006","DOIUrl":"https://doi.org/10.24818/jamis.2022.03006","url":null,"abstract":"Research Question: Does public country by country reporting (CbCr) deter multinationals' tax avoidance practices operating in extractive industries? Motivation: Public CbCr has already been implemented for two specific sectors, namely the financial and extractive sectors. Prior studies have focused on tax avoidance of EU banks around the implementation of public CbCr requirement (Joshi et al., 2020; Eberhartinger et al., 2020; Overesch & Wolff, 2021). However, studies on how resource-extracting multinationals respond to the CbCr regulation are scarce. This study seeks to fill this gap by examining the effect of public CbCr on tax avoidance with a special focus on extractive industries. Idea: To improve fiscal transparency, Canadian and European legislators have adopted regulations requiring multinational corporations (MNCs) to provide, annually, their Extraction Payment Disclosures (EPD) (Public CbCr standard for extractive industries) to governments (EC, 2013; Natural Resource Canada, 2014). This study examines the effect of mandatory EPD adoption on the extent of tax haven use. Data: For a 10-year period surrounding the mandatory EPD adoption (2010-2019), we selected a sample of UK MNCs operating in the oil, gas, and mining sectors and listed on the London Stock Exchange. The analysis is mainly based on firm-level information taken from DATASTREAM database. Based on hand-collected data from annual reports, we measured the extent of tax haven use using the percentage of multinational subsidiaries located in tax haven jurisdictions/countries as listed in Dyreng and Lindsey (2009). An alternative list identified by the Organization for Economic Co-operation and Development (OECD) (2006) was also used in a robustness test. Tools: To examine our research question, we estimated a linear regression model with panel data using STATA software. Findings: The results show that the increased transparency resulting from public EPD does not appear to significantly affect the intensity of tax haven use. Contribution: This study extends and complements prior literature examining the effect of CbCr on tax avoidance and profit shifting by focusing on a specific setting i.e. extractive sector. To the best of our knowledge, apart from Johannesen and Larsen (2016) and Rauter (2020), no studies have provided empirical evidence on how resource-extracting multinationals respond to the EPD regulation.","PeriodicalId":14716,"journal":{"name":"Journal of Accounting and Management Information Systems","volume":"59 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86892302","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-01DOI: 10.24818/jamis.2022.03007
Jacob Peng, Chang-Wei Li
Research Question: How do firms approach their cybersecurity disclosure obligations, especially for those who experienced a cyber-attack? Prior research has found that year-after-year modification on textual disclosures adds more appreciable information that makes it more relevant. But do firms provide meaningful disclosures to promote market transparency? Motivation: Because of growing cybersecurity threats in recent years, the U.S. Securities and Exchange Commission (SEC) has issued several regulations and guidance that emphasized on the disclosure of material information on cybersecurity. Given that the mandatory risk factor disclosures in SEC Form 10-K is the first place firms are encouraged to disclose cybersecurity-related assessment, it is important to examine how firms approach their disclosure expectations. Idea: To examine whether firms respond to cyber-attacks with meaningful disclosures, we use the Vector Space Model (VSM) to calculate disclosure modifications before and after major cyber-attack incident. Data: We extracted cybersecurity breach incidents from the Data Breach Database, a centralized and global database of data breaches maintained by a leading security company. In addition, we use the SEC data depository to find firms’ 10-K disclosures. Findings: We find that firms modify their cybersecurity disclosures by increasing the quantity of disclosures, but not necessarily the quality of disclosures as measured by document similarity. Furthermore, we find partial evidence that the degree of modification is positively associated with the severity of cyber-attacks. Contribution: Our evidence suggests that firms tend to use boilerplate language to disclose cybersecurity-related issues. This finding is consistent with prior research. That is, consistent with prior literature, the information content in public company 10-Ks is limited. We find that this seems to be the case as well when it comes to cybersecurity disclosures.
{"title":"Security breaches and modifications on cybersecurity disclosures","authors":"Jacob Peng, Chang-Wei Li","doi":"10.24818/jamis.2022.03007","DOIUrl":"https://doi.org/10.24818/jamis.2022.03007","url":null,"abstract":"Research Question: How do firms approach their cybersecurity disclosure obligations, especially for those who experienced a cyber-attack? Prior research has found that year-after-year modification on textual disclosures adds more appreciable information that makes it more relevant. But do firms provide meaningful disclosures to promote market transparency? Motivation: Because of growing cybersecurity threats in recent years, the U.S. Securities and Exchange Commission (SEC) has issued several regulations and guidance that emphasized on the disclosure of material information on cybersecurity. Given that the mandatory risk factor disclosures in SEC Form 10-K is the first place firms are encouraged to disclose cybersecurity-related assessment, it is important to examine how firms approach their disclosure expectations. Idea: To examine whether firms respond to cyber-attacks with meaningful disclosures, we use the Vector Space Model (VSM) to calculate disclosure modifications before and after major cyber-attack incident. Data: We extracted cybersecurity breach incidents from the Data Breach Database, a centralized and global database of data breaches maintained by a leading security company. In addition, we use the SEC data depository to find firms’ 10-K disclosures. Findings: We find that firms modify their cybersecurity disclosures by increasing the quantity of disclosures, but not necessarily the quality of disclosures as measured by document similarity. Furthermore, we find partial evidence that the degree of modification is positively associated with the severity of cyber-attacks. Contribution: Our evidence suggests that firms tend to use boilerplate language to disclose cybersecurity-related issues. This finding is consistent with prior research. That is, consistent with prior literature, the information content in public company 10-Ks is limited. We find that this seems to be the case as well when it comes to cybersecurity disclosures.","PeriodicalId":14716,"journal":{"name":"Journal of Accounting and Management Information Systems","volume":"35 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84129869","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-01DOI: 10.24818/jamis.2022.03002
N. Daskalakis, Nikolaos Aggelakis, John Filos
Research Question: This study examines whether bankruptcy prediction models work well during recessionary periods, on an advanced economy, and how their results can be improved, via a methodological approach to change the coefficients of their variables. Motivation: This is the first study to follow a methodological approach of a simultaneous comparison-update-comparison task, during a recessionary period, for an advanced economy. Idea: The paper explores, updates and compares the effectiveness of five of the most common bankruptcy prediction models on the listed companies of an advanced economy (Greece), covering the recessionary period of 2010-2019. Data: The study sample consists of Greek companies, listed in the Athens Stock Exchange, covering the period 2010-2019, classified into viable and non-viable, based on specific criteria. The final sample consists of fifty-two (52) companies, listed in the Athens Stock Exchange during the period from 2010 to 2019. Tools: We follow a two-stage analysis. First, we apply the original five bankruptcy prediction models of Altman (2000) and Grammatikos and Gloubos (1984), MDA and LPM models, Taffler (1983) and Dimitras et al. (1999) Next, we recalculate their coefficients, keeping the variables stable, and we again apply them to the same sample and compare them again. Findings: We find that the original models are significantly biased against viable companies, but predict with almost perfect accuracy non-viable companies’ bankruptcy. Once we update the variables’ coefficients, we get significantly improved results as regards correctly predicting viable companies, at the expense of slightly decreased, but still high, non-viable companies’ bankruptcy prediction rates. We suggest a similar methodology to be applied in other similar economies, to increase models’ accuracy. Contribution: The contribution of the paper is threefold. First, we show how we can develop highly accurate bankruptcy prediction models that can be applied in the economic environment of a developed economy. Second, we show that these models work well during recessionary periods as well, and can also be improved when their coefficients are changed. Third, we suggest a methodology of applying, comparing and updating such models, thus showing in detail this improvement process per model.
{"title":"Applying, updating and comparing bankruptcy forecasting models. The case of Greece","authors":"N. Daskalakis, Nikolaos Aggelakis, John Filos","doi":"10.24818/jamis.2022.03002","DOIUrl":"https://doi.org/10.24818/jamis.2022.03002","url":null,"abstract":"Research Question: This study examines whether bankruptcy prediction models work well during recessionary periods, on an advanced economy, and how their results can be improved, via a methodological approach to change the coefficients of their variables. Motivation: This is the first study to follow a methodological approach of a simultaneous comparison-update-comparison task, during a recessionary period, for an advanced economy. Idea: The paper explores, updates and compares the effectiveness of five of the most common bankruptcy prediction models on the listed companies of an advanced economy (Greece), covering the recessionary period of 2010-2019. Data: The study sample consists of Greek companies, listed in the Athens Stock Exchange, covering the period 2010-2019, classified into viable and non-viable, based on specific criteria. The final sample consists of fifty-two (52) companies, listed in the Athens Stock Exchange during the period from 2010 to 2019. Tools: We follow a two-stage analysis. First, we apply the original five bankruptcy prediction models of Altman (2000) and Grammatikos and Gloubos (1984), MDA and LPM models, Taffler (1983) and Dimitras et al. (1999) Next, we recalculate their coefficients, keeping the variables stable, and we again apply them to the same sample and compare them again. Findings: We find that the original models are significantly biased against viable companies, but predict with almost perfect accuracy non-viable companies’ bankruptcy. Once we update the variables’ coefficients, we get significantly improved results as regards correctly predicting viable companies, at the expense of slightly decreased, but still high, non-viable companies’ bankruptcy prediction rates. We suggest a similar methodology to be applied in other similar economies, to increase models’ accuracy. Contribution: The contribution of the paper is threefold. First, we show how we can develop highly accurate bankruptcy prediction models that can be applied in the economic environment of a developed economy. Second, we show that these models work well during recessionary periods as well, and can also be improved when their coefficients are changed. Third, we suggest a methodology of applying, comparing and updating such models, thus showing in detail this improvement process per model.","PeriodicalId":14716,"journal":{"name":"Journal of Accounting and Management Information Systems","volume":"7 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82356753","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-01DOI: 10.24818/jamis.2022.03005
Kishore Singh, Pran Boolaky, Kamil Omoteso
Motivation: Fraud is a challenging problem. Its economic effects are clear – worse public services, less financially stable and profitable companies, charities deprived of resources needed for charitable purposes and diminished levels of disposable income of everyone. In every sector globally, fraud has an adverse impact on the quality of life. Fraud threatens the effective and efficient utilization of resources and hence is of great concern to industries, the whole community and academia. Research Question: Does political regime moderate the relationship between financial reporting regime and on fraud? Does the legal system moderate the relationship between financial reporting regime and on fraud? What is the impact of financial reporting regime, legal regime and political regime on fraud at national level? Idea: This study investigates how political, legal and financial reporting impacts on fraud at a country level and whether any triangular effects exist. Data: Country level data published by ACFE, World Fact book, Deloitte IAS Plus Report, IFAC Report and Economic Intelligence Unit Report on Democracy Index for 106 countries for the years 2010 to 2014 was used. Tools: To test study’s hypotheses and to determine the interactive effects of legal regime, political regime and financial reporting regime on fraud, a three-way ANOVA is used. To determine the impact of the independent variables on fraud, pooled regression analysis is used. Findings: The findings provide both theoretical and empirical evidence on the interaction effects of political, legal and financial reporting regimes on fraud. Political and legal regime has a significant interaction with financial reporting on fraud as posited by political accountability theory and legal theory. Even the main effects of each regime separately are statistically significant. Contribution: given the complex nature of frauds, the study is relevant to regulators, practising auditors, legal and political experts and politicians engaged in the debate on frauds and how to address this harmful act at a cross country level. When collusion exists between executive, legislative oversight in a full democratic regime is weakened, impacting the mechanism of fraud minimisation.
{"title":"The relationship between politics, legal system and financial reporting on fraud","authors":"Kishore Singh, Pran Boolaky, Kamil Omoteso","doi":"10.24818/jamis.2022.03005","DOIUrl":"https://doi.org/10.24818/jamis.2022.03005","url":null,"abstract":"Motivation: Fraud is a challenging problem. Its economic effects are clear – worse public services, less financially stable and profitable companies, charities deprived of resources needed for charitable purposes and diminished levels of disposable income of everyone. In every sector globally, fraud has an adverse impact on the quality of life. Fraud threatens the effective and efficient utilization of resources and hence is of great concern to industries, the whole community and academia. Research Question: Does political regime moderate the relationship between financial reporting regime and on fraud? Does the legal system moderate the relationship between financial reporting regime and on fraud? What is the impact of financial reporting regime, legal regime and political regime on fraud at national level? Idea: This study investigates how political, legal and financial reporting impacts on fraud at a country level and whether any triangular effects exist. Data: Country level data published by ACFE, World Fact book, Deloitte IAS Plus Report, IFAC Report and Economic Intelligence Unit Report on Democracy Index for 106 countries for the years 2010 to 2014 was used. Tools: To test study’s hypotheses and to determine the interactive effects of legal regime, political regime and financial reporting regime on fraud, a three-way ANOVA is used. To determine the impact of the independent variables on fraud, pooled regression analysis is used. Findings: The findings provide both theoretical and empirical evidence on the interaction effects of political, legal and financial reporting regimes on fraud. Political and legal regime has a significant interaction with financial reporting on fraud as posited by political accountability theory and legal theory. Even the main effects of each regime separately are statistically significant. Contribution: given the complex nature of frauds, the study is relevant to regulators, practising auditors, legal and political experts and politicians engaged in the debate on frauds and how to address this harmful act at a cross country level. When collusion exists between executive, legislative oversight in a full democratic regime is weakened, impacting the mechanism of fraud minimisation.","PeriodicalId":14716,"journal":{"name":"Journal of Accounting and Management Information Systems","volume":"17 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83216126","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-01DOI: 10.24818/jamis.2022.03003
Andreas G. Koutoupis, Christos G. Kampouris, Athanasia V. Sakellaridou
Research Question: Can the F-Score predict the stock market returns in the cross section of international stock markets? Motivation: The majority of the literature, in the area of the F-Score metric, has examined whether it can be used to predict future financial profitability, the relationship of F-Score with book-to-value metrics and the momentum premium and whether it can be used as a successful investment strategy tool. There only three studies that examine the relationship between the F-Score and future stock returns, without the use of complementary variables, and in other countries except Europe. This paper seeks to fill this gap. Data: The dataset of the present research consists of listed European companies from 21 countries (in random order: Finland, United Kingdom, Switzerland, Turkey, Hungary, Portugal, Spain, Poland, Norway, Luxembourg, Italy, Netherlands, Ireland, Greece, Belgium Germany, Denmark, France Czech Republic, Sweden, Austria), from 1989 to 2016. We collect firm-level accounting information as provided by Worldscope, as well as the monthly total returns for common stocks from Datastream. Tools: With the use of a dataset consisting of European companies from 21 countries, portfolio analysis and time series regressions are performed using abnormal monthly returns (monthly returns minus risk-free interest rates). Findings: We find that the F-Score is a statistically significant predictor as well as an economically meaningful index. Its performance forecasting ability is visible in developed Europe, both in small and large companies, and remains stable after controlling for established cross-sectional determinants (such as book market, investment, and company size). Contribution: This study seeks to fill the gap in the stock return and F-Score relationship in a European setting controlling for the other financial variables. Our empirical models are tested across a number of different economic and stock market backgrounds and the implications of our results are of particular interest for academics, for investors (retail and institutional) and for policy makers.
{"title":"Can financial strength indicators form a profitable investment strategy? The case of F-Score in Europe","authors":"Andreas G. Koutoupis, Christos G. Kampouris, Athanasia V. Sakellaridou","doi":"10.24818/jamis.2022.03003","DOIUrl":"https://doi.org/10.24818/jamis.2022.03003","url":null,"abstract":"Research Question: Can the F-Score predict the stock market returns in the cross section of international stock markets? Motivation: The majority of the literature, in the area of the F-Score metric, has examined whether it can be used to predict future financial profitability, the relationship of F-Score with book-to-value metrics and the momentum premium and whether it can be used as a successful investment strategy tool. There only three studies that examine the relationship between the F-Score and future stock returns, without the use of complementary variables, and in other countries except Europe. This paper seeks to fill this gap. Data: The dataset of the present research consists of listed European companies from 21 countries (in random order: Finland, United Kingdom, Switzerland, Turkey, Hungary, Portugal, Spain, Poland, Norway, Luxembourg, Italy, Netherlands, Ireland, Greece, Belgium Germany, Denmark, France Czech Republic, Sweden, Austria), from 1989 to 2016. We collect firm-level accounting information as provided by Worldscope, as well as the monthly total returns for common stocks from Datastream. Tools: With the use of a dataset consisting of European companies from 21 countries, portfolio analysis and time series regressions are performed using abnormal monthly returns (monthly returns minus risk-free interest rates). Findings: We find that the F-Score is a statistically significant predictor as well as an economically meaningful index. Its performance forecasting ability is visible in developed Europe, both in small and large companies, and remains stable after controlling for established cross-sectional determinants (such as book market, investment, and company size). Contribution: This study seeks to fill the gap in the stock return and F-Score relationship in a European setting controlling for the other financial variables. Our empirical models are tested across a number of different economic and stock market backgrounds and the implications of our results are of particular interest for academics, for investors (retail and institutional) and for policy makers.","PeriodicalId":14716,"journal":{"name":"Journal of Accounting and Management Information Systems","volume":"3 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86370063","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-01DOI: 10.24818/jamis.2022.03004
Anis Ben Amar, Islem Turki
Research Questions: Does the hierarchy of earnings thresholds differ between accounting systems? Does a temporal shift occur in the hierarchy of the earnings thresholds associated with earnings management? Motivation: A number of studies looked into the hierarchy of earnings thresholds based on the earnings distribution, capital market valuation, survey views, and discretionary accruals. Our study seeks to fill this gap by investigating the hierarchy of earnings thresholds based on real earnings management and by investigating if the hierarchy of earnings thresholds differs between accounting systems. Idea: This paper aims to examine the hierarchy of achieving certain earnings thresholds based on the magnitude of discretionary accruals and real earnings management under two different accounting models. Tools: Large samples of US and French firms for the period ranging from 2008 to 2018 are used. The relative extent of both discretionary accruals and real earnings management used to achieve three earnings thresholds is examined by regression analyses. Findings: Two hierarchies emerge from the US and French contexts. On the one hand, we find (1) avoiding earnings losses, (2) avoiding earnings decreases, and (3) avoiding negative earnings surprises in the US context. On the other hand, we find out (1) avoiding earnings losses, (2) avoiding negative earnings surprises, and (3) avoiding earnings decreases in the French context. An analysis of the real earnings management behavior of these firms indicates that they have used the significant real earnings management for the purpose of avoiding earnings decreases in both contexts. These hierarchies are reorganized over time. Contribution: Our paper contributes to the existing literature in several ways. First, the majorities of studies on earnings management examine and validate opportunistic incentives, whereas our results validate incentives with reference to the signaling theory. Second, our findings are of interest to investors, auditors, regulators and academics with respect to the financial statement analysis, accounting earnings quality, and financial reporting. Research limitations: This study is subject to measurement error which is a common limitation in the earnings management literature.
{"title":"Temporal evidence on threshold hierarchy based on accruals and real earnings management: Evidence from France and the US","authors":"Anis Ben Amar, Islem Turki","doi":"10.24818/jamis.2022.03004","DOIUrl":"https://doi.org/10.24818/jamis.2022.03004","url":null,"abstract":"Research Questions: Does the hierarchy of earnings thresholds differ between accounting systems? Does a temporal shift occur in the hierarchy of the earnings thresholds associated with earnings management? Motivation: A number of studies looked into the hierarchy of earnings thresholds based on the earnings distribution, capital market valuation, survey views, and discretionary accruals. Our study seeks to fill this gap by investigating the hierarchy of earnings thresholds based on real earnings management and by investigating if the hierarchy of earnings thresholds differs between accounting systems. Idea: This paper aims to examine the hierarchy of achieving certain earnings thresholds based on the magnitude of discretionary accruals and real earnings management under two different accounting models. Tools: Large samples of US and French firms for the period ranging from 2008 to 2018 are used. The relative extent of both discretionary accruals and real earnings management used to achieve three earnings thresholds is examined by regression analyses. Findings: Two hierarchies emerge from the US and French contexts. On the one hand, we find (1) avoiding earnings losses, (2) avoiding earnings decreases, and (3) avoiding negative earnings surprises in the US context. On the other hand, we find out (1) avoiding earnings losses, (2) avoiding negative earnings surprises, and (3) avoiding earnings decreases in the French context. An analysis of the real earnings management behavior of these firms indicates that they have used the significant real earnings management for the purpose of avoiding earnings decreases in both contexts. These hierarchies are reorganized over time. Contribution: Our paper contributes to the existing literature in several ways. First, the majorities of studies on earnings management examine and validate opportunistic incentives, whereas our results validate incentives with reference to the signaling theory. Second, our findings are of interest to investors, auditors, regulators and academics with respect to the financial statement analysis, accounting earnings quality, and financial reporting. Research limitations: This study is subject to measurement error which is a common limitation in the earnings management literature.","PeriodicalId":14716,"journal":{"name":"Journal of Accounting and Management Information Systems","volume":"31 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73461179","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-01DOI: 10.24818/jamis.2022.02006
Atanasko Atanasovski, Todor Tocev
Research Question: Is there a gap in research preferences on disruptive technologies between academia and practitioners? Motivation: Disruptive technologies in accounting represent a new evolutionary phase of accounting impacted by emerging technologies that are part of industrial revolution 4.0. The relevance of emerging technologies, their potential, and the opportunities they offer for the accounting profession attract both academia and professionals with accelerated research efforts. Academia and scientific researchers must research and provide an appropriate theoretical basis to help practitioners better adapt and increase their awareness and trust in technology. Idea: This paper provides early quantitative research data on publication trends related to most disruptive technologies in accounting such as big data, data analytics, cloud, artificial intelligence, and blockchain. Data: The data were collected through detailed analysis and research of websites and publishing platforms on Big Four accounting firms, professional accounting associations, and institutes, and selected high-ranking journals for the period from 2016 to 2020. Tools: The research was conducted using bibliometric analysis to identify how many articles were published by individual parties. Findings: The results highlight that there are no significant discrepancies or different views of academia and practitioners. It is a positive result indicating that academia and scientific researchers exploit in the same direction as practitioners, thus providing support for adaptation and alignment to technology trends. Contribution: The significance of the results of such research is important for obtaining directions in which the academy should research in the future but also for the regulators as well.
{"title":"Research trends in disruptive technologies for accounting of the future – A bibliometric analysis","authors":"Atanasko Atanasovski, Todor Tocev","doi":"10.24818/jamis.2022.02006","DOIUrl":"https://doi.org/10.24818/jamis.2022.02006","url":null,"abstract":"Research Question: Is there a gap in research preferences on disruptive technologies between academia and practitioners? Motivation: Disruptive technologies in accounting represent a new evolutionary phase of accounting impacted by emerging technologies that are part of industrial revolution 4.0. The relevance of emerging technologies, their potential, and the opportunities they offer for the accounting profession attract both academia and professionals with accelerated research efforts. Academia and scientific researchers must research and provide an appropriate theoretical basis to help practitioners better adapt and increase their awareness and trust in technology. Idea: This paper provides early quantitative research data on publication trends related to most disruptive technologies in accounting such as big data, data analytics, cloud, artificial intelligence, and blockchain. Data: The data were collected through detailed analysis and research of websites and publishing platforms on Big Four accounting firms, professional accounting associations, and institutes, and selected high-ranking journals for the period from 2016 to 2020. Tools: The research was conducted using bibliometric analysis to identify how many articles were published by individual parties. Findings: The results highlight that there are no significant discrepancies or different views of academia and practitioners. It is a positive result indicating that academia and scientific researchers exploit in the same direction as practitioners, thus providing support for adaptation and alignment to technology trends. Contribution: The significance of the results of such research is important for obtaining directions in which the academy should research in the future but also for the regulators as well.","PeriodicalId":14716,"journal":{"name":"Journal of Accounting and Management Information Systems","volume":"37 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74809917","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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