Alim Al Ayub Ahmed, Harish Paruchuri, Siddhartha Vadlamudi, Apoorva Ganapathy
Digital finance is assuming a significant part in the arrangement of financial services all over the world. Fast growth with digitalization, data analysis, and computing capacities allows for a whole new scope of financial services and transactions. This financial development empowered by digital financial technology (Fintech) has pulled in a ton of attention, as it could offer some potential for economic growth and development. As a part of the Fintech environment, cryptography has started to grow quickly and digital assets are acquiring in favorability among financial bankers and investors. Human behavior as they engage with financial activities is personally associated with the noticed market elements. However, with many existing theories and studies on the fundamental motivations of the conduct of people in financial frameworks, there is still restricted experimental derivation of the behavioral conduct of the financial agents from a definite market analysis. Cryptocurrency technology has given a map to this analysis with its voluminous data and its transparency of financial transactions. It has empowered us to perform inference on the personal conduct standards of users in the market, which we analyze in the bitcoin and ethereum cryptocurrency markets. In our study, we initially decide different properties of the cryptography users by complex network analysis. Financial cryptography is a difficult subject that necessitates abilities from a variety of seemingly unrelated fields. There is a serious risk that attempts to establish Financial Cryptography frameworks would simplify or omit key disciplines because they are caught between central banking and cryptography. This paper discusses research that attempts to limit the scope of Financial Cryptography. This model should assist the project, administrative, and requirements personnel by classifying each discipline into a seven-layer model of basic nature, where the link between each adjoining layer is evident. While this model is shown as effective, all models have cutoff points. This one does not present a design system or a protocol agenda. Furthermore, given the model's initial adaptation and the field, it should be viewed as a suggestion of complexity rather than a definitive approach.
{"title":"Cryptography in Financial Markets: Potential Channels for Future Financial Stability","authors":"Alim Al Ayub Ahmed, Harish Paruchuri, Siddhartha Vadlamudi, Apoorva Ganapathy","doi":"10.5281/ZENODO.4774829","DOIUrl":"https://doi.org/10.5281/ZENODO.4774829","url":null,"abstract":"Digital finance is assuming a significant part in the arrangement of financial services all over the world. Fast growth with digitalization, data analysis, and computing capacities allows for a whole new scope of financial services and transactions. This financial development empowered by digital financial technology (Fintech) has pulled in a ton of attention, as it could offer some potential for economic growth and development. As a part of the Fintech environment, cryptography has started to grow quickly and digital assets are acquiring in favorability among financial bankers and investors. Human behavior as they engage with financial activities is personally associated with the noticed market elements. However, with many existing theories and studies on the fundamental motivations of the conduct of people in financial frameworks, there is still restricted experimental derivation of the behavioral conduct of the financial agents from a definite market analysis. Cryptocurrency technology has given a map to this analysis with its voluminous data and its transparency of financial transactions. It has empowered us to perform inference on the personal conduct standards of users in the market, which we analyze in the bitcoin and ethereum cryptocurrency markets. In our study, we initially decide different properties of the cryptography users by complex network analysis. Financial cryptography is a difficult subject that necessitates abilities from a variety of seemingly unrelated fields. There is a serious risk that attempts to establish Financial Cryptography frameworks would simplify or omit key disciplines because they are caught between central banking and cryptography. This paper discusses research that attempts to limit the scope of Financial Cryptography. This model should assist the project, administrative, and requirements personnel by classifying each discipline into a seven-layer model of basic nature, where the link between each adjoining layer is evident. While this model is shown as effective, all models have cutoff points. This one does not present a design system or a protocol agenda. Furthermore, given the model's initial adaptation and the field, it should be viewed as a suggestion of complexity rather than a definitive approach.","PeriodicalId":39296,"journal":{"name":"Academy of Accounting and Financial Studies Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2021-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49620896","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}
This paper analyzes the effects of the book-tax difference (BTD) on accounting accruals and value relevance. Recent studies argued that book-tax conformity increases earnings quality. However, other studies argued that book-tax conformity decreases earnings quality. The previous studies failed to isolate the components of BTD, and they did not consider the design of the operation of accounting or tax systems, which is the reason for the conflicting results. This paper isolates the elements of BTD and compares these elements and similar items. In addition, this paper focuses on the timing of changing accounting and tax systems. We predict and find that (1) large discretionary book-only accruals (DBOA) reduce the value relevance of earnings, (2) the value relevance of firms with large non-discretionary book-only accruals (NBOA) are higher than other firms. However, this result is not clear from a comparison of the value relevance of firms with large non-discretionary book-tax accruals (NBTA), and (3) the relationship between BTD and value relevance depends on the accounting system and the taxation system.
{"title":"Does Book-Tax Difference Influence the Value Relevance of Book Income? Empirical Evidence from Japan","authors":"A. Yamada","doi":"10.2139/SSRN.2615213","DOIUrl":"https://doi.org/10.2139/SSRN.2615213","url":null,"abstract":"This paper analyzes the effects of the book-tax difference (BTD) on accounting accruals and value relevance. Recent studies argued that book-tax conformity increases earnings quality. However, other studies argued that book-tax conformity decreases earnings quality. The previous studies failed to isolate the components of BTD, and they did not consider the design of the operation of accounting or tax systems, which is the reason for the conflicting results. This paper isolates the elements of BTD and compares these elements and similar items. In addition, this paper focuses on the timing of changing accounting and tax systems. We predict and find that (1) large discretionary book-only accruals (DBOA) reduce the value relevance of earnings, (2) the value relevance of firms with large non-discretionary book-only accruals (NBOA) are higher than other firms. However, this result is not clear from a comparison of the value relevance of firms with large non-discretionary book-tax accruals (NBTA), and (3) the relationship between BTD and value relevance depends on the accounting system and the taxation system.","PeriodicalId":39296,"journal":{"name":"Academy of Accounting and Financial Studies Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2016-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68226031","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}
INTRODUCTION I examine whether timely loss recognition affects the sensitivity of firm investment to cash flows, a proxy for internal funds (see Hayashi, 1982). (1) Two related streams of literature motivate my analyses. First, timely loss recognition may arise not only out of a contracting need (Watts, 2003), but also out of the need to reduce information asymmetries between managers and investors (e.g. LaFond and Watts, 2008; Biddle et al., 2009). Where managers have significant information advantages over investors, timely loss recognition may act as a governance mechanism by resulting in a more conservative estimate of firm value. In line with this argument, timely loss recognition has been shown to be negatively related to cost of capital (e.g. Zhang, 2008; Lara et al., 2010), indicating investors consider conservative firms to be less risky. Second, financial reporting may have real effects in that managers take into account financial reporting practices when making operating and investment decisions (see Kanodia, 2007; McNichols and Stubben, 2009). Recent studies by Bushman et al. (2005), Ahmed and Duellman (2011), Francis and Martin (2009), and Lara et al. (2009) provide evidence that timely loss recognition improves capital allocation and investment profitability. Collectively, these findings support the argument by Ball (2001) and Ball and Shivakumar (2005) that conservative accounting forces managers to be mindful ex-ante of how they will report the outcomes of their investment decisions to investors ex-post. Given the potential for timely loss recognition to reduce external capital costs and affect managers' investment decisions, I examine its impact on one of the more established relations in the corporate finance literature, namely, the sensitivity of firm investment to cash flows. (2) Because of its ability to decrease external capital costs, timely loss recognition should be associated with a lower sensitivity of firm investment to cash flows. Furthermore, to the extent that timely loss recognition provides governance benefits, its impact on the investment-cash flow relation should be strongest in firms with a high agency costs (see LaFond and Watts, 2008; Francis and Martin, 2010). To test these predictions I expand the basic investment-cash flow model (e.g., Myers and Majluf, 1984; Gurgler et al., 2007; Chen et al., 2007) and examine whether the sensitivity of investment to cash flows is decreasing in timely loss recognition. I then introduce agency costs into the model to determine whether the impact of timely loss recognition on the investment-cash flow relation is dependent upon a firm's potential for agency problems. Results support my predictions; timely loss recognition is associated with a lower sensitivity of firm investment to cash flows, and this effect is strongest in firms with high agency costs. These findings are robust to both a changes specification of my primary empirical model and alternative measures of timely
我研究了及时的损失确认是否会影响企业投资对现金流量的敏感性，现金流量是内部资金的代理(见Hayashi, 1982)。两种相关的文学流派促使我进行分析。首先，及时确认损失可能不仅是出于合同需要(Watts, 2003)，而且也是出于减少管理者和投资者之间信息不对称的需要(例如LaFond和Watts, 2008;Biddle et al.， 2009)。当管理者比投资者拥有显著的信息优势时，及时确认损失可能作为一种治理机制，导致对公司价值的更保守估计。根据这一观点，及时确认损失已被证明与资金成本呈负相关(例如Zhang, 2008;Lara et al.， 2010)，这表明投资者认为保守的公司风险较小。其次，财务报告可能具有实际影响，因为管理者在做出经营和投资决策时考虑到财务报告实践(见Kanodia, 2007;McNichols and Stubben, 2009)。Bushman等人(2005)、Ahmed和Duellman(2011)、Francis和Martin(2009)以及Lara等人(2009)的最新研究证明，及时确认损失可以提高资本配置和投资盈利能力。总的来说，这些发现支持了Ball(2001)和Ball and Shivakumar(2005)的观点，即保守会计迫使管理者事先注意他们将如何在事后向投资者报告其投资决策的结果。考虑到及时确认损失可能会降低外部资本成本并影响管理者的投资决策，我研究了它对公司财务文献中更成熟的关系之一的影响，即公司投资对现金流的敏感性。(2)由于其降低外部资本成本的能力，及时确认损失应与企业投资对现金流的较低敏感性相关联。此外，就及时确认损失提供治理收益而言，其对投资-现金流关系的影响在代理成本高的公司中应该是最强的(见LaFond和Watts, 2008;弗朗西斯和马丁，2010)。为了验证这些预测，我扩展了基本的投资-现金流模型(例如，Myers和Majluf, 1984;Gurgler et al.， 2007;Chen et al.， 2007)，并检查投资对现金流量的敏感性是否在及时损失确认中下降。然后，我将代理成本引入模型，以确定及时损失确认对投资-现金流量关系的影响是否依赖于公司出现代理问题的可能性。结果支持我的预测;及时确认损失与企业投资对现金流的敏感度较低有关，这种影响在代理成本高的企业中最为明显。这些发现对于我的主要经验模型的变化规范和及时损失识别的替代措施都是稳健的。我的研究对Ball(2001)和Ball and Shivakumar(2005)提出的保守会计对企业投资有影响的理论有所贡献。Ahmed和Duellman(2011)以及Francis和Martin(2010)的实证研究发现，及时确认损失的公司的管理者会做出更好的投资，而Bushman等人(2011)和Lara等人(2010)的实证研究发现，更及时的损失确认会提高资本配置效率。我的发现也增加了关于保守报道的信息益处的文献。LaFond和Watts(2008)认为，在信息不对称程度较高的企业中，及时确认损失是最有价值的。Francis和Martin(2010)为这一论点提供了实证支持，他们记录了保守的公司进行更有利可图的收购，尤其是那些可能存在重大代理问题的公司。我提供了额外的支持，通过记录高代理成本的公司从及时的损失确认中获益更多，就其投资-现金流敏感性而言。．..
{"title":"Timely Loss Recognition, Agency Costs and the Cash Flow Sensitivity of Firm Investment","authors":"Michael J Imhof","doi":"10.2139/ssrn.1465907","DOIUrl":"https://doi.org/10.2139/ssrn.1465907","url":null,"abstract":"INTRODUCTION I examine whether timely loss recognition affects the sensitivity of firm investment to cash flows, a proxy for internal funds (see Hayashi, 1982). (1) Two related streams of literature motivate my analyses. First, timely loss recognition may arise not only out of a contracting need (Watts, 2003), but also out of the need to reduce information asymmetries between managers and investors (e.g. LaFond and Watts, 2008; Biddle et al., 2009). Where managers have significant information advantages over investors, timely loss recognition may act as a governance mechanism by resulting in a more conservative estimate of firm value. In line with this argument, timely loss recognition has been shown to be negatively related to cost of capital (e.g. Zhang, 2008; Lara et al., 2010), indicating investors consider conservative firms to be less risky. Second, financial reporting may have real effects in that managers take into account financial reporting practices when making operating and investment decisions (see Kanodia, 2007; McNichols and Stubben, 2009). Recent studies by Bushman et al. (2005), Ahmed and Duellman (2011), Francis and Martin (2009), and Lara et al. (2009) provide evidence that timely loss recognition improves capital allocation and investment profitability. Collectively, these findings support the argument by Ball (2001) and Ball and Shivakumar (2005) that conservative accounting forces managers to be mindful ex-ante of how they will report the outcomes of their investment decisions to investors ex-post. Given the potential for timely loss recognition to reduce external capital costs and affect managers' investment decisions, I examine its impact on one of the more established relations in the corporate finance literature, namely, the sensitivity of firm investment to cash flows. (2) Because of its ability to decrease external capital costs, timely loss recognition should be associated with a lower sensitivity of firm investment to cash flows. Furthermore, to the extent that timely loss recognition provides governance benefits, its impact on the investment-cash flow relation should be strongest in firms with a high agency costs (see LaFond and Watts, 2008; Francis and Martin, 2010). To test these predictions I expand the basic investment-cash flow model (e.g., Myers and Majluf, 1984; Gurgler et al., 2007; Chen et al., 2007) and examine whether the sensitivity of investment to cash flows is decreasing in timely loss recognition. I then introduce agency costs into the model to determine whether the impact of timely loss recognition on the investment-cash flow relation is dependent upon a firm's potential for agency problems. Results support my predictions; timely loss recognition is associated with a lower sensitivity of firm investment to cash flows, and this effect is strongest in firms with high agency costs. These findings are robust to both a changes specification of my primary empirical model and alternative measures of timely","PeriodicalId":39296,"journal":{"name":"Academy of Accounting and Financial Studies Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2014-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2139/ssrn.1465907","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68183985","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}
Over the years, several studies have been done by researchers and practitioners to understand the significance of adopting Mergers & Acquisitions (MA identify the most popular methods; their limitations and benefits; and analyze whether research conclusions differ depending upon the method used to measure performance. We also research whether methods used in emerging markets such as India differ from those typically used in the developed markets. We find that internationally event studies dominate acquisition performance research; while research on Indian acquisitions has primarily been based on accounting returns. There are a few other methods such as data envelopment analysis and balanced score card methods which warrant further research and inclusion in MA which is an important factor for researchers and practitioners to consider while drawing conclusions on acquisition success or failure. We recommend that the method of evaluation should be based on the country of study, and more significantly the aspect under examination i.e. profitability, stock market perception or efficiency. Our contribution to the present body of knowledge is to suggest that methods of evaluation used in developed markets may not work in emerging markets and that method selection can influence research conclusions.
{"title":"Methodologies Used to Determine Mergers and Acquisitions’ Performance","authors":"Madhvi Sethi, Dipali Krishnakumar","doi":"10.2139/SSRN.1803922","DOIUrl":"https://doi.org/10.2139/SSRN.1803922","url":null,"abstract":"Over the years, several studies have been done by researchers and practitioners to understand the significance of adopting Mergers & Acquisitions (MA identify the most popular methods; their limitations and benefits; and analyze whether research conclusions differ depending upon the method used to measure performance. We also research whether methods used in emerging markets such as India differ from those typically used in the developed markets. We find that internationally event studies dominate acquisition performance research; while research on Indian acquisitions has primarily been based on accounting returns. There are a few other methods such as data envelopment analysis and balanced score card methods which warrant further research and inclusion in MA which is an important factor for researchers and practitioners to consider while drawing conclusions on acquisition success or failure. We recommend that the method of evaluation should be based on the country of study, and more significantly the aspect under examination i.e. profitability, stock market perception or efficiency. Our contribution to the present body of knowledge is to suggest that methods of evaluation used in developed markets may not work in emerging markets and that method selection can influence research conclusions.","PeriodicalId":39296,"journal":{"name":"Academy of Accounting and Financial Studies Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2012-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67748997","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}
In response to proposed convergence of accounting standards, we investigate whether non-U.S. firms (which list their shares on U.S. secondary markets and report under U.S. standards) are more likely to interpret and apply the accounting rules in a different manner than their U.S. counterparts. Specifically, this paper evaluates a mediation effect that non-U.S. firms will take greater goodwill impairment charges under SFAS 142 than U.S. firms. Extending earlier international accounting research (e.g., d'Arcy 2006), the study illustrates the difference between de jure harmonization (harmonized rules) and de facto harmonization (harmonized practices) and examines the impact of legal, accounting, and cultural values upon the accounting for goodwill. The findings indicate that both firm-level and country-level characteristics affect the goodwill impairment decision.
{"title":"Goodwill Impairment: A Comparative Country Analysis","authors":"Zane L. Swanson, Robert Singer, Alexis Downs","doi":"10.2139/SSRN.1003941","DOIUrl":"https://doi.org/10.2139/SSRN.1003941","url":null,"abstract":"In response to proposed convergence of accounting standards, we investigate whether non-U.S. firms (which list their shares on U.S. secondary markets and report under U.S. standards) are more likely to interpret and apply the accounting rules in a different manner than their U.S. counterparts. Specifically, this paper evaluates a mediation effect that non-U.S. firms will take greater goodwill impairment charges under SFAS 142 than U.S. firms. Extending earlier international accounting research (e.g., d'Arcy 2006), the study illustrates the difference between de jure harmonization (harmonized rules) and de facto harmonization (harmonized practices) and examines the impact of legal, accounting, and cultural values upon the accounting for goodwill. The findings indicate that both firm-level and country-level characteristics affect the goodwill impairment decision.","PeriodicalId":39296,"journal":{"name":"Academy of Accounting and Financial Studies Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2007-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2139/SSRN.1003941","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68120235","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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