Pub Date : 2019-10-07DOI: 10.1108/ijaim-11-2018-0134
Q. Hao, Xiangyan Shi, Danlu Bu, Liaoliao Li
Purpose The purpose of this paper is to investigate the impacts of the 2008 Chinese stimulus program on earnings management. Design/methodology/approach Using a sample period from 2004 to 2011 (per-stimulus period: 2004-2007 and post-stimulus period: 2008-2011), the authors compare the change in earnings management between the firms that received the stimulus funds and those that did not receive the stimulus funds. Findings The authors find that from the pre- to post-stimulus period, the recipient firms experienced a greater increase in downward accrual management and a greater decrease in real management than the non-recipient firms did. This result is primarily driven by the non-state-owned enterprises and firms using non-Big-Four auditors. Originality/value The results suggest that the earnings management level is ultimately determined by the underlying economic and political factors influencing managers’ and auditors’ incentives (Cohen, 2008; Ball et al., 2003). Meanwhile, some mechanisms, such as high-quality audit (Eshleman and Guo, 2014) and state ownership (Wang and Yung, 2011) can also play a role in determining the level of earnings management.
目的研究2008年中国经济刺激计划对盈余管理的影响。采用2004年至2011年的样本期(刺激前期:2004-2007年，刺激后期:2008-2011年)，作者比较了接受刺激资金的公司和未接受刺激资金的公司在盈余管理方面的变化。研究发现，从刺激前到刺激后，与非刺激企业相比，接受刺激的企业在应计向下管理方面的增长更大，而在实际管理方面的下降更大。这一结果主要是由非国有企业和事务所使用的非四大会计师事务所推动的。结果表明，盈余管理水平最终由影响管理者和审计师激励的潜在经济和政治因素决定(Cohen, 2008;Ball et al.， 2003)。同时，一些机制，如高质量审计(Eshleman and Guo, 2014)和国有所有权(Wang and young, 2011)也可以在决定盈余管理水平方面发挥作用。
{"title":"The impact of the Chinese stimulus program on earnings management","authors":"Q. Hao, Xiangyan Shi, Danlu Bu, Liaoliao Li","doi":"10.1108/ijaim-11-2018-0134","DOIUrl":"https://doi.org/10.1108/ijaim-11-2018-0134","url":null,"abstract":"\u0000Purpose\u0000The purpose of this paper is to investigate the impacts of the 2008 Chinese stimulus program on earnings management.\u0000\u0000\u0000Design/methodology/approach\u0000Using a sample period from 2004 to 2011 (per-stimulus period: 2004-2007 and post-stimulus period: 2008-2011), the authors compare the change in earnings management between the firms that received the stimulus funds and those that did not receive the stimulus funds.\u0000\u0000\u0000Findings\u0000The authors find that from the pre- to post-stimulus period, the recipient firms experienced a greater increase in downward accrual management and a greater decrease in real management than the non-recipient firms did. This result is primarily driven by the non-state-owned enterprises and firms using non-Big-Four auditors.\u0000\u0000\u0000Originality/value\u0000The results suggest that the earnings management level is ultimately determined by the underlying economic and political factors influencing managers’ and auditors’ incentives (Cohen, 2008; Ball et al., 2003). Meanwhile, some mechanisms, such as high-quality audit (Eshleman and Guo, 2014) and state ownership (Wang and Yung, 2011) can also play a role in determining the level of earnings management.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"43 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2019-10-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80225677","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 : 2019-10-07DOI: 10.1108/ijaim-11-2018-0128
Q. Hao, Dayong Dong, Keke Wu
Purpose This paper aims to study the following two questions. Do earnings announcements stimulate investors to participate in online discussions? Does online investment forum participation affect the market’s reaction to earnings news? Design/methodology/approach The authors collect all the online posts, which were related to the internet service companies and posted in a Chinese financial forum, guba.eastmoney.com (Guba), during the period between June 30, 2008 and December 31, 2015. Multiple linear regression analysis is used to test the questions. Findings The study finds that the earnings announcements induce online discussion. In addition, before the earnings announcement, online posting activity does not affect earnings response coefficient but can weaken the positive association between the magnitude of the upcoming earnings surprise and abnormal trading volume. In contrast, after the earnings announcement, online forum participation can facilitate the incorporation of earnings surprise into the price. Originality/value This study contributes to the literature studying the impact of social media on market reaction to earnings news by providing evidence that the price discovery process can be affected by the online investment forum. Several policy implications are also provided.
{"title":"Online investment forum and the market response around earnings announcement in the Chinese stock markets","authors":"Q. Hao, Dayong Dong, Keke Wu","doi":"10.1108/ijaim-11-2018-0128","DOIUrl":"https://doi.org/10.1108/ijaim-11-2018-0128","url":null,"abstract":"\u0000Purpose\u0000This paper aims to study the following two questions. Do earnings announcements stimulate investors to participate in online discussions? Does online investment forum participation affect the market’s reaction to earnings news?\u0000\u0000\u0000Design/methodology/approach\u0000The authors collect all the online posts, which were related to the internet service companies and posted in a Chinese financial forum, guba.eastmoney.com (Guba), during the period between June 30, 2008 and December 31, 2015. Multiple linear regression analysis is used to test the questions.\u0000\u0000\u0000Findings\u0000The study finds that the earnings announcements induce online discussion. In addition, before the earnings announcement, online posting activity does not affect earnings response coefficient but can weaken the positive association between the magnitude of the upcoming earnings surprise and abnormal trading volume. In contrast, after the earnings announcement, online forum participation can facilitate the incorporation of earnings surprise into the price.\u0000\u0000\u0000Originality/value\u0000This study contributes to the literature studying the impact of social media on market reaction to earnings news by providing evidence that the price discovery process can be affected by the online investment forum. Several policy implications are also provided.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"7 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2019-10-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76793094","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 : 2019-10-07DOI: 10.1108/ijaim-10-2018-0121
J. Harper, Li Sun
Purpose The purpose of this study is to examine the impact of asymmetric information, estimated as the geographic distance between the acquiring firm and the target firm, on goodwill impairment following a merger or acquisition. Design/methodology/approach This study uses regression analysis to investigate the research questions of this study. Findings This study finds that geographic distance is positively related to the magnitude of current and cumulative goodwill impairment. The results of this study still hold even after robustness checks for other factors that affect mergers and acquisitions and sources of asymmetric information. Originality/value This study extends and links two distinct research streams: asymmetric information related to geographic distance studies in finance and goodwill literature in accounting. Specifically, this study extends literature on the impact of geographic distance on various firm characteristics and contributes to research regarding the determinants of goodwill impairment, a major research stream in goodwill accounting (Li and Sloan, 2016). To the best of the authors’ knowledge, this is the first study that performs a direct empirical test on the relation between geographic distance (between the acquiring firm and the target firm) and goodwill impairment.
{"title":"Geographic distance and goodwill impairment","authors":"J. Harper, Li Sun","doi":"10.1108/ijaim-10-2018-0121","DOIUrl":"https://doi.org/10.1108/ijaim-10-2018-0121","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study is to examine the impact of asymmetric information, estimated as the geographic distance between the acquiring firm and the target firm, on goodwill impairment following a merger or acquisition.\u0000\u0000\u0000Design/methodology/approach\u0000This study uses regression analysis to investigate the research questions of this study.\u0000\u0000\u0000Findings\u0000This study finds that geographic distance is positively related to the magnitude of current and cumulative goodwill impairment. The results of this study still hold even after robustness checks for other factors that affect mergers and acquisitions and sources of asymmetric information.\u0000\u0000\u0000Originality/value\u0000This study extends and links two distinct research streams: asymmetric information related to geographic distance studies in finance and goodwill literature in accounting. Specifically, this study extends literature on the impact of geographic distance on various firm characteristics and contributes to research regarding the determinants of goodwill impairment, a major research stream in goodwill accounting (Li and Sloan, 2016). To the best of the authors’ knowledge, this is the first study that performs a direct empirical test on the relation between geographic distance (between the acquiring firm and the target firm) and goodwill impairment.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"4 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2019-10-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88920795","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 : 2019-10-07DOI: 10.1108/ijaim-08-2018-0097
F. Shahzad, I. Rehman, Waqas Hanif, Ghazanfar Ali Asim, Mushahid Hussain Baig
Purpose This study aims to empirically investigate the effect of financial reporting quality (FRQ) and audit quality (AQ) on the investment efficiency (IE) for the firms listed on the Pakistan Stock Exchange during the period 2007-2014. Design/methodology The authors use pooled ordinary least squares (OLS) regression which cluster at the firm and year level to test the hypotheses. For sensitivity check, the authors also account for reverse causality and cross-sectional dependence by using the GMM and FGLS regression methods. Furthermore, the authors built their theoretical arguments based on alignment hypothesis of the agency theory and resource-based view of the firm. Findings The findings suggest that higher FRQ and AQ are associated with higher IE. The results for these particular estimates are robust when tested using alternative estimation techniques. Overall, the outcomes of this study are in line with the arguments presented by the alignment hypothesis of the agency theory and resource-based view of the firm. Practical implications This study is fruitful for policymakers’ and investors. This study finds that the audit done by the Big 4 also reduces the information gap and, thus, reduces the moral hazard and adverse selection problems, thereby enhancing the IE. Originality The authors extend the debate on determinates of IE and highlight two monitoring mechanisms: FRQ and AQ. The authors further extend the literature on the economic consequences of AQ in terms of IE, as proposed by Francis (2011). For the first time, this study investigates the impact of AQ on IE in a setting where minority shareholder risk of exploitation is high relative to other markets in Asia.
{"title":"The influence of financial reporting quality and audit quality on investment efficiency","authors":"F. Shahzad, I. Rehman, Waqas Hanif, Ghazanfar Ali Asim, Mushahid Hussain Baig","doi":"10.1108/ijaim-08-2018-0097","DOIUrl":"https://doi.org/10.1108/ijaim-08-2018-0097","url":null,"abstract":"\u0000Purpose\u0000This study aims to empirically investigate the effect of financial reporting quality (FRQ) and audit quality (AQ) on the investment efficiency (IE) for the firms listed on the Pakistan Stock Exchange during the period 2007-2014.\u0000\u0000\u0000Design/methodology\u0000The authors use pooled ordinary least squares (OLS) regression which cluster at the firm and year level to test the hypotheses. For sensitivity check, the authors also account for reverse causality and cross-sectional dependence by using the GMM and FGLS regression methods. Furthermore, the authors built their theoretical arguments based on alignment hypothesis of the agency theory and resource-based view of the firm.\u0000\u0000\u0000Findings\u0000The findings suggest that higher FRQ and AQ are associated with higher IE. The results for these particular estimates are robust when tested using alternative estimation techniques. Overall, the outcomes of this study are in line with the arguments presented by the alignment hypothesis of the agency theory and resource-based view of the firm.\u0000\u0000\u0000Practical implications\u0000This study is fruitful for policymakers’ and investors. This study finds that the audit done by the Big 4 also reduces the information gap and, thus, reduces the moral hazard and adverse selection problems, thereby enhancing the IE.\u0000\u0000\u0000Originality\u0000The authors extend the debate on determinates of IE and highlight two monitoring mechanisms: FRQ and AQ. The authors further extend the literature on the economic consequences of AQ in terms of IE, as proposed by Francis (2011). For the first time, this study investigates the impact of AQ on IE in a setting where minority shareholder risk of exploitation is high relative to other markets in Asia.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"51 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2019-10-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85615772","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 : 2019-08-05DOI: 10.1108/ijaim-07-2018-0077
S. Rahi, M. A. Ghani
Purpose The proliferation of information technology has changed the banking system globally. Internet technology has not only allowed banks to offer products and services but also improved their ability to retain customers. This study aims to examine internet banking user’s continuance intention by integrating two well-known theories DeLone and McLean information system success model (D&M) and self-determination theory (SDT). Design/methodology/approach The research model was tested using survey data from 398 customers of commercial banks. The respondents were internet banking users. Data were analyzed using structural equation modeling. Findings The results revealed that internet banking user continuance intention is jointly determined by information quality (INFQ), service quality, satisfaction, introjected regulation, external regulation, intrinsic regulation and identified regulation. The integrated model explained 75.4 per cent variation in customer’s continuance intention to use internet banking. The results suggested that intrinsic regulation and identified regulation were the most important human motivation factors that drive customer’s intention toward continue use of internet banking. Practical implications The findings imply that managers seeking user satisfaction should focus on INFQ and service quality to enhance user continuance intention. Policymakers should focus on intrinsic and identified regulation of internet banking users. Some of the ways banks can do this is to develop enjoyable internet banking website with kind of reward system, activities that have the charm of novelty, challenge or aesthetic significance will help to improve user’s intention to continue use of internet banking. Originality/value This study contributes to the literature by integrating D&M and SDT in continuance intention and different from several traditional studies that had investigated the initial acceptance of internet banking users.
{"title":"Integration of DeLone and McLean and self-determination theory in internet banking continuance intention context","authors":"S. Rahi, M. A. Ghani","doi":"10.1108/ijaim-07-2018-0077","DOIUrl":"https://doi.org/10.1108/ijaim-07-2018-0077","url":null,"abstract":"\u0000Purpose\u0000The proliferation of information technology has changed the banking system globally. Internet technology has not only allowed banks to offer products and services but also improved their ability to retain customers. This study aims to examine internet banking user’s continuance intention by integrating two well-known theories DeLone and McLean information system success model (D&M) and self-determination theory (SDT).\u0000\u0000\u0000Design/methodology/approach\u0000The research model was tested using survey data from 398 customers of commercial banks. The respondents were internet banking users. Data were analyzed using structural equation modeling.\u0000\u0000\u0000Findings\u0000The results revealed that internet banking user continuance intention is jointly determined by information quality (INFQ), service quality, satisfaction, introjected regulation, external regulation, intrinsic regulation and identified regulation. The integrated model explained 75.4 per cent variation in customer’s continuance intention to use internet banking. The results suggested that intrinsic regulation and identified regulation were the most important human motivation factors that drive customer’s intention toward continue use of internet banking.\u0000\u0000\u0000Practical implications\u0000The findings imply that managers seeking user satisfaction should focus on INFQ and service quality to enhance user continuance intention. Policymakers should focus on intrinsic and identified regulation of internet banking users. Some of the ways banks can do this is to develop enjoyable internet banking website with kind of reward system, activities that have the charm of novelty, challenge or aesthetic significance will help to improve user’s intention to continue use of internet banking.\u0000\u0000\u0000Originality/value\u0000This study contributes to the literature by integrating D&M and SDT in continuance intention and different from several traditional studies that had investigated the initial acceptance of internet banking users.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"74 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2019-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86332455","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 : 2019-08-05DOI: 10.1108/ijaim-11-2017-0144
G. Gong, Yue Li, Ling Zhou
Purpose It has been widely documented that investors and analysts underreact to information in past earnings changes, a fundamental performance indicator. The purpose of this paper is to examine whether managers’ voluntary disclosure efficiently incorporates information in past earnings changes, whether analysts recognize and fully anticipate the potential inefficiency in management forecasts and whether managers’ potential forecasting inefficiency entirely results from intentional disclosure strategies or at least partly reflects managers’ unintentional information processing biases. Design/methodology/approach Archival data were used to empirically test the relation between management earnings forecast errors and past earnings changes. Findings Results show that managers underreact to past earnings changes when projecting future earnings and analysts recognize, but fail to fully anticipate, the predictable bias associated with past earnings changes in management forecasts. Moreover, analysts appear to underreact more to past earnings changes when management forecasts exhibit greater underestimation of earnings change persistence. Further analyses suggest that the underestimation of earnings change persistence is at least partly attributable to managers’ unintentional information processing bias. Originality/value This study contributes to the voluntary disclosure literature by demonstrating the limitation in the informational value of management forecasts. The findings indicate that the effectiveness of voluntary disclosure in mitigating market mispricing is inherently limited by the inefficiency in management forecasts. This study can help market participants to better use management forecasts to form more accurate earnings expectations. Moreover, our evidence suggests a managerial information processing bias with respect to past earnings changes, which may affect managers' operational, investment or financing decisions.
{"title":"Do management earnings forecasts fully reflect information in past earnings changes?","authors":"G. Gong, Yue Li, Ling Zhou","doi":"10.1108/ijaim-11-2017-0144","DOIUrl":"https://doi.org/10.1108/ijaim-11-2017-0144","url":null,"abstract":"\u0000Purpose\u0000It has been widely documented that investors and analysts underreact to information in past earnings changes, a fundamental performance indicator. The purpose of this paper is to examine whether managers’ voluntary disclosure efficiently incorporates information in past earnings changes, whether analysts recognize and fully anticipate the potential inefficiency in management forecasts and whether managers’ potential forecasting inefficiency entirely results from intentional disclosure strategies or at least partly reflects managers’ unintentional information processing biases.\u0000\u0000\u0000Design/methodology/approach\u0000Archival data were used to empirically test the relation between management earnings forecast errors and past earnings changes.\u0000\u0000\u0000Findings\u0000Results show that managers underreact to past earnings changes when projecting future earnings and analysts recognize, but fail to fully anticipate, the predictable bias associated with past earnings changes in management forecasts. Moreover, analysts appear to underreact more to past earnings changes when management forecasts exhibit greater underestimation of earnings change persistence. Further analyses suggest that the underestimation of earnings change persistence is at least partly attributable to managers’ unintentional information processing bias.\u0000\u0000\u0000Originality/value\u0000This study contributes to the voluntary disclosure literature by demonstrating the limitation in the informational value of management forecasts. The findings indicate that the effectiveness of voluntary disclosure in mitigating market mispricing is inherently limited by the inefficiency in management forecasts. This study can help market participants to better use management forecasts to form more accurate earnings expectations. Moreover, our evidence suggests a managerial information processing bias with respect to past earnings changes, which may affect managers' operational, investment or financing decisions.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"38 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2019-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80003034","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 : 2019-08-05DOI: 10.1108/ijaim-10-2017-0121
Li Wang, Stephen D. Makar
Purpose This paper aims to examine the foreign exchange (FX) risk effects of cash flow hedge accounting (HA). To the extent the HA qualification criteria and detailed documentation give investors confidence that FX derivatives effectively hedge risk, market-assigned FX risk premiums will be lower for firms using cash flow HA. Design/methodology/approach Probit analyses rely on the HA designation to examine the decision to use cash flow HA. Primary analyses test the hypothesized relationship between the magnitude of FX risk premiums and such HA use. Additional analyses allow for the interaction between cash flow HA use and the extent of FX derivatives use. Findings Hypothesis tests indicate that the magnitude of the FX risk premium is, on average, lower for firms designated as effective cash flow hedgers. In additional tests, the evidence suggests that the market assigns a lower FX risk premium to firms using a higher level of FX derivatives as effective cash flow hedges. Practical implications The findings suggest that cash flow HA provides risk-relevant information to investors. Such positive effects of HA on investors’ understanding of risk management may guide US accounting regulators in their efforts to improve HA. Corporate treasurers also may benefit from these insights into evaluating the use of HA. Originality/value Responding to the call for research on the risk relevance of cash flow HA, this paper merges the HA literature with the FX risk management literature to directly examine the relationship between HA use and FX risk premiums for manufacturing firms. The authors take an innovative approach using FX rates to which each firm is most exposed and provide evidence consistent with the argument that this approach is helpful in understanding both the decision to use cash flow HA and the effect of such HA use on market-assigned FX risk premiums.
{"title":"Hedge accounting and investors’ view of FX risk","authors":"Li Wang, Stephen D. Makar","doi":"10.1108/ijaim-10-2017-0121","DOIUrl":"https://doi.org/10.1108/ijaim-10-2017-0121","url":null,"abstract":"\u0000Purpose\u0000This paper aims to examine the foreign exchange (FX) risk effects of cash flow hedge accounting (HA). To the extent the HA qualification criteria and detailed documentation give investors confidence that FX derivatives effectively hedge risk, market-assigned FX risk premiums will be lower for firms using cash flow HA.\u0000\u0000\u0000Design/methodology/approach\u0000Probit analyses rely on the HA designation to examine the decision to use cash flow HA. Primary analyses test the hypothesized relationship between the magnitude of FX risk premiums and such HA use. Additional analyses allow for the interaction between cash flow HA use and the extent of FX derivatives use.\u0000\u0000\u0000Findings\u0000Hypothesis tests indicate that the magnitude of the FX risk premium is, on average, lower for firms designated as effective cash flow hedgers. In additional tests, the evidence suggests that the market assigns a lower FX risk premium to firms using a higher level of FX derivatives as effective cash flow hedges.\u0000\u0000\u0000Practical implications\u0000The findings suggest that cash flow HA provides risk-relevant information to investors. Such positive effects of HA on investors’ understanding of risk management may guide US accounting regulators in their efforts to improve HA. Corporate treasurers also may benefit from these insights into evaluating the use of HA.\u0000\u0000\u0000Originality/value\u0000Responding to the call for research on the risk relevance of cash flow HA, this paper merges the HA literature with the FX risk management literature to directly examine the relationship between HA use and FX risk premiums for manufacturing firms. The authors take an innovative approach using FX rates to which each firm is most exposed and provide evidence consistent with the argument that this approach is helpful in understanding both the decision to use cash flow HA and the effect of such HA use on market-assigned FX risk premiums.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"31 3 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2019-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83679571","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 : 2019-08-05DOI: 10.1108/ijaim-03-2018-0027
Muhammad Safdar Sial, Chun-mei Zheng, Nguyen Vinh Khuong
PurposeThis study aims to explore the possibility of a two-way relationship between corporate social responsibility (CSR) and earnings management (accruals and real EM) with the moderating role of female and independent directors.Design/methodology/approachThe authors use STATA to test the generalized method of moments on a sample of Chinese listed firms data over the period 2009-2015. The unbalanced sample obtained 3,481 observations from China stock market and accounting research database and CSR rating provided by Rankins.FindingsThe results indicate a significant negative relationship between two-way CSR and accrual-based EM. Moreover, female and independent directors moderate the two-way relationship between CSR and EM.Research limitations/implicationsThe present study does not include all financial, insurance and investment firms to impact on CSR and EM. Further research might consist of family ownership to enhance the evidence for an emerging market.Originality/valueThis study primarily contributes to the literature on CSR, female and independent directors, and EM by providing evidence for the moderating role of female and independent directors on the two-way association between CSR and EM.
{"title":"Do female and independent directors explain the two-way relationship between corporate social responsibility and earnings management of Chinese listed firms?","authors":"Muhammad Safdar Sial, Chun-mei Zheng, Nguyen Vinh Khuong","doi":"10.1108/ijaim-03-2018-0027","DOIUrl":"https://doi.org/10.1108/ijaim-03-2018-0027","url":null,"abstract":"PurposeThis study aims to explore the possibility of a two-way relationship between corporate social responsibility (CSR) and earnings management (accruals and real EM) with the moderating role of female and independent directors.Design/methodology/approachThe authors use STATA to test the generalized method of moments on a sample of Chinese listed firms data over the period 2009-2015. The unbalanced sample obtained 3,481 observations from China stock market and accounting research database and CSR rating provided by Rankins.FindingsThe results indicate a significant negative relationship between two-way CSR and accrual-based EM. Moreover, female and independent directors moderate the two-way relationship between CSR and EM.Research limitations/implicationsThe present study does not include all financial, insurance and investment firms to impact on CSR and EM. Further research might consist of family ownership to enhance the evidence for an emerging market.Originality/valueThis study primarily contributes to the literature on CSR, female and independent directors, and EM by providing evidence for the moderating role of female and independent directors on the two-way association between CSR and EM.","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"1 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2019-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88896739","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 : 2019-08-05DOI: 10.1108/IJAIM-11-2017-0141
A. H. Ahmed, Yasser Eliwa, D. Power
Purpose There has been an ongoing call from various groups of stakeholders for social and environmental practices to be integrated into companies’ operations. A number of companies have responded by engaging in socially and environmentally responsible activities, while others choose not to participate in these activities, which incur additional costs. The absence of consensus regarding the economic implications of social and environmental practices provides the impetus for this paper. This study aims to examine the association between corporate social and environmental practices (CSEP) and the cost of equity capital measured by four ex ante measures using a sample of UK listed companies. Design/methodology/approach First, we undertake a review of the extant literature on CSEP. Second, using a sample of 236 companies surveyed in “Britain’s most admired companies” in terms of “community and environmental responsibility” during the period 2010-2014, we estimate four implied a cost of equity capital proxies. The relationship between a companies’ cost of equity capital and its CSEP is then calculated. Findings The authors find evidence that companies with higher levels of CSEP have a lower cost of equity capital. This finding determines the significant role played by CSEP in helping users to make useful decisions. Also, it supports arguments that firms with socially responsible practices have lower risk and higher valuation. Practical implications The finding encourages companies to be more socially and environmentally responsible. Furthermore, it provides up-to-date evidence of the economic consequences of CSEP. The results should, therefore, be of interest to managers, regulators and standard-setters charged with developing regulations to control CSEP, as these practices are still undertaken on a voluntary basis by companies. Originality/value To the best of the authors’ knowledge, this is the first study to investigate the association between CSEP of British companies and their cost of equity capital. The study complements Ghoul et al. (2011), who examine the relationship between CSR and the cost of equity capital of the US sample. The authors extend Ghoul et al. (2011) by using a sample of the UK market after applying International Financial Reporting Standards.
{"title":"The impact of corporate social and environmental practices on the cost of equity capital: UK evidence","authors":"A. H. Ahmed, Yasser Eliwa, D. Power","doi":"10.1108/IJAIM-11-2017-0141","DOIUrl":"https://doi.org/10.1108/IJAIM-11-2017-0141","url":null,"abstract":"\u0000Purpose\u0000There has been an ongoing call from various groups of stakeholders for social and environmental practices to be integrated into companies’ operations. A number of companies have responded by engaging in socially and environmentally responsible activities, while others choose not to participate in these activities, which incur additional costs. The absence of consensus regarding the economic implications of social and environmental practices provides the impetus for this paper. This study aims to examine the association between corporate social and environmental practices (CSEP) and the cost of equity capital measured by four ex ante measures using a sample of UK listed companies.\u0000\u0000\u0000Design/methodology/approach\u0000First, we undertake a review of the extant literature on CSEP. Second, using a sample of 236 companies surveyed in “Britain’s most admired companies” in terms of “community and environmental responsibility” during the period 2010-2014, we estimate four implied a cost of equity capital proxies. The relationship between a companies’ cost of equity capital and its CSEP is then calculated.\u0000\u0000\u0000Findings\u0000The authors find evidence that companies with higher levels of CSEP have a lower cost of equity capital. This finding determines the significant role played by CSEP in helping users to make useful decisions. Also, it supports arguments that firms with socially responsible practices have lower risk and higher valuation.\u0000\u0000\u0000Practical implications\u0000The finding encourages companies to be more socially and environmentally responsible. Furthermore, it provides up-to-date evidence of the economic consequences of CSEP. The results should, therefore, be of interest to managers, regulators and standard-setters charged with developing regulations to control CSEP, as these practices are still undertaken on a voluntary basis by companies.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this is the first study to investigate the association between CSEP of British companies and their cost of equity capital. The study complements Ghoul et al. (2011), who examine the relationship between CSR and the cost of equity capital of the US sample. The authors extend Ghoul et al. (2011) by using a sample of the UK market after applying International Financial Reporting Standards.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"43 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2019-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74406257","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 : 2019-08-05DOI: 10.1108/IJAIM-01-2018-0003
Arif Perdana, A. Robb, Fiona H. Rohde
Purpose The purpose of this study is to gain insight into what aspects of eXtensible Business Reporting Language (XBRL) data and information quality (DIQ) most interest professionals. Design/methodology/approach The authors use text analytics to examine XBRL discourses from professionals working in the domain. They explore the discussion in the three largest LinkedIn XBRL groups. Data collection covered the period 2010-2016. Findings Via the text analytics, the authors find the most appropriate XBRL DIQ dimensions. They propose an XBRL DIQ framework containing 18 relevant DIQ dimensions derived from both the accounting and IS fields. The findings of this study are expected to help direct future XBRL research into the DIQ dimensions most worthy of further empirical investigation. Originality/value XBRL is the international standard for the digital reporting of financial, performance, risk and compliance information. Although the expectations of XBRL to produce improvements in DIQ via its applications (e.g. standard business reporting, digital data standard and interactive data visualization) are high, they remain unclear. This paper contributes to better understanding of the aspects of XBRL DIQ most relevant to professionals.
{"title":"Textual and contextual analysis of professionals’ discourses on XBRL data and information quality","authors":"Arif Perdana, A. Robb, Fiona H. Rohde","doi":"10.1108/IJAIM-01-2018-0003","DOIUrl":"https://doi.org/10.1108/IJAIM-01-2018-0003","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study is to gain insight into what aspects of eXtensible Business Reporting Language (XBRL) data and information quality (DIQ) most interest professionals.\u0000\u0000\u0000Design/methodology/approach\u0000The authors use text analytics to examine XBRL discourses from professionals working in the domain. They explore the discussion in the three largest LinkedIn XBRL groups. Data collection covered the period 2010-2016.\u0000\u0000\u0000Findings\u0000Via the text analytics, the authors find the most appropriate XBRL DIQ dimensions. They propose an XBRL DIQ framework containing 18 relevant DIQ dimensions derived from both the accounting and IS fields. The findings of this study are expected to help direct future XBRL research into the DIQ dimensions most worthy of further empirical investigation.\u0000\u0000\u0000Originality/value\u0000XBRL is the international standard for the digital reporting of financial, performance, risk and compliance information. Although the expectations of XBRL to produce improvements in DIQ via its applications (e.g. standard business reporting, digital data standard and interactive data visualization) are high, they remain unclear. This paper contributes to better understanding of the aspects of XBRL DIQ most relevant to professionals.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"10 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2019-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83985199","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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