Pub Date : 2022-08-12DOI: 10.1108/ara-01-2022-0012
Shaojun Fan, Juan Chen, H. Han
PurposeThe authors expand the connotation of the research on the accounting information quality characteristics, provide empirical evidence for the factors of consistency and also help to deepen further their understanding of the economic consequences of ownership concentration and other ownership structures.Design/methodology/approachUsing financial data of Chinese listed companies as samples, coupled with a method to calculate the consistency of the sample enterprises on the corporate level in the 2007–2019 period, the authors studied its impact of ownership concentration on consistency.FindingsThe study finds that after controlling other factors, ownership concentration could significantly reduce accounting information consistency. Further research finds that when the executives' shareholding is higher, the reduction effect of ownership concentration on consistency is weaker. After the robustness test, the conclusion remains basically unchanged.Research limitations/implicationsFirst, maybe there is a limitation of De Franco et al. (2011) method the authors use in China. As some scholars pointed out, the systematic component of returns variation is large in emerging markets (Morck et al., 2000), so it is hard to determine to what extent market stock returns will capture the net effect of earnings. As is mentioned above, there are multiple methods for measuring comparability and consistency, but it is not easy to judge which way is the best. Maybe the authors will have a perfect process in the future. Second, in addition to the factors mentioned in this study's hypotheses, there should be other factors (these include internal factors and external factors) that play moderating role in the impact of ownership concentration on accounting information consistency. The authors have not thoroughly studied the effect of those factors. These limitations all need to be further explored in the future.Originality/valueThe study finds that after controlling other factors, ownership concentration could significantly reduce accounting information consistency, but the reduction will be affected by some other factors related to corporate governance. The new insights from these advances are that the conclusions provide a technical path for management of companies to improve corporate governance efficiency and the quality of accounting information, and also provide more reference and empirical evidence for information users to identify the company's accounting information quality, which contributes to creating a prerequisite for the usefulness of accounting information.
目的拓展会计信息质量特征研究的内涵，为一致性因素提供实证证据，也有助于进一步加深对股权集中等股权结构的经济后果的理解。设计/方法论/方法以中国上市公司的财务数据为样本，结合2007-2019年样本企业在公司层面一致性的计算方法，研究了股权集中对一致性的影响。研究发现，在控制其他因素后，股权集中会显著降低会计信息的一致性。进一步研究发现，高管持股比例越高，股权集中度对一致性的降低作用越弱。经过稳健性测试，结论基本保持不变。研究局限性/含义首先，可能存在De Franco等人的局限性。（2011）作者在中国使用的方法。正如一些学者所指出的，新兴市场回报变化的系统性成分很大（Morck et al.，2000），因此很难确定市场股票回报在多大程度上会反映收益的净效应。如上所述，衡量可比性和一致性的方法有多种，但要判断哪种方法最好并不容易。也许作者在未来会有一个完美的过程。其次，除了本研究假设中提到的因素外，股权集中对会计信息一致性的影响还应该有其他因素（包括内部因素和外部因素）发挥调节作用。作者没有彻底研究这些因素的影响。这些局限性都需要在未来进一步探索。原创性/价值研究发现，在控制其他因素后，股权集中会显著降低会计信息的一致性，但这种降低会受到其他一些与公司治理相关的因素的影响。这些进展带来的新见解是，结论为公司管理层提高公司治理效率和会计信息质量提供了技术路径，也为信息使用者识别公司会计信息质量、，这有助于为会计信息的有用性创造先决条件。
{"title":"Ownership concentration and accounting information consistency—evidence from Chinese listed companies","authors":"Shaojun Fan, Juan Chen, H. Han","doi":"10.1108/ara-01-2022-0012","DOIUrl":"https://doi.org/10.1108/ara-01-2022-0012","url":null,"abstract":"PurposeThe authors expand the connotation of the research on the accounting information quality characteristics, provide empirical evidence for the factors of consistency and also help to deepen further their understanding of the economic consequences of ownership concentration and other ownership structures.Design/methodology/approachUsing financial data of Chinese listed companies as samples, coupled with a method to calculate the consistency of the sample enterprises on the corporate level in the 2007–2019 period, the authors studied its impact of ownership concentration on consistency.FindingsThe study finds that after controlling other factors, ownership concentration could significantly reduce accounting information consistency. Further research finds that when the executives' shareholding is higher, the reduction effect of ownership concentration on consistency is weaker. After the robustness test, the conclusion remains basically unchanged.Research limitations/implicationsFirst, maybe there is a limitation of De Franco et al. (2011) method the authors use in China. As some scholars pointed out, the systematic component of returns variation is large in emerging markets (Morck et al., 2000), so it is hard to determine to what extent market stock returns will capture the net effect of earnings. As is mentioned above, there are multiple methods for measuring comparability and consistency, but it is not easy to judge which way is the best. Maybe the authors will have a perfect process in the future. Second, in addition to the factors mentioned in this study's hypotheses, there should be other factors (these include internal factors and external factors) that play moderating role in the impact of ownership concentration on accounting information consistency. The authors have not thoroughly studied the effect of those factors. These limitations all need to be further explored in the future.Originality/valueThe study finds that after controlling other factors, ownership concentration could significantly reduce accounting information consistency, but the reduction will be affected by some other factors related to corporate governance. The new insights from these advances are that the conclusions provide a technical path for management of companies to improve corporate governance efficiency and the quality of accounting information, and also provide more reference and empirical evidence for information users to identify the company's accounting information quality, which contributes to creating a prerequisite for the usefulness of accounting information.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-08-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47186970","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 : 2022-08-09DOI: 10.1108/ara-08-2021-0151
E. Fedorova, P. Drogovoz, A. Nevredinov, Polina Kazinina, Cai Qitan
PurposeThe goal of the study is to examine the effects of management discussion and analysis (MD&A) sentiment in public companies' annual reports on corporate investment incentives in developing economies.Design/methodology/approachThe authors use sentiment analysis of MD&A texts based on Loughran and McDonald (2011) and combination of panel data regression, logit model and random forest. The text data consists of 3,511 annual reports of Chinese listed companies for the period from 2010 to 2019.FindingsThis paper provides empirical evidence of signaling theory that sentiment of annual reports and MD&A influences corporate decisions on both M&A and internal investments. The authors found that comparing to annual reports MD&A sentiment has more stable and significant explanatory and predictive power.Practical implicationsThis paper confirms the importance of MD&A sentiment for corporate investment decision taking and provides practical techniques for analysts and researchers to study corporate investment incentives from the point of view of signaling theory.Originality/valueThe study aims to expand the domains of signaling theory and corporate investment valuation by including a broader range of data on companies' M&A and internal investments in developing economies. To explore the impact of MD&A sentiment on corporate investment, a state-of-the-art set of text mining and machine learning techniques is used. The authors' results confirm that MD&A has signaling effect and can get a positive market response. Furthermore, this study enhances the empirical evidence of overconfidence theory, i.e. optimistic management whose MD&A tend to positive overestimates the management's investments decision and also underestimate the potential risk to the firm.
{"title":"Impact of MD&A sentiment on corporate investment in developing economies: Chinese evidence","authors":"E. Fedorova, P. Drogovoz, A. Nevredinov, Polina Kazinina, Cai Qitan","doi":"10.1108/ara-08-2021-0151","DOIUrl":"https://doi.org/10.1108/ara-08-2021-0151","url":null,"abstract":"PurposeThe goal of the study is to examine the effects of management discussion and analysis (MD&A) sentiment in public companies' annual reports on corporate investment incentives in developing economies.Design/methodology/approachThe authors use sentiment analysis of MD&A texts based on Loughran and McDonald (2011) and combination of panel data regression, logit model and random forest. The text data consists of 3,511 annual reports of Chinese listed companies for the period from 2010 to 2019.FindingsThis paper provides empirical evidence of signaling theory that sentiment of annual reports and MD&A influences corporate decisions on both M&A and internal investments. The authors found that comparing to annual reports MD&A sentiment has more stable and significant explanatory and predictive power.Practical implicationsThis paper confirms the importance of MD&A sentiment for corporate investment decision taking and provides practical techniques for analysts and researchers to study corporate investment incentives from the point of view of signaling theory.Originality/valueThe study aims to expand the domains of signaling theory and corporate investment valuation by including a broader range of data on companies' M&A and internal investments in developing economies. To explore the impact of MD&A sentiment on corporate investment, a state-of-the-art set of text mining and machine learning techniques is used. The authors' results confirm that MD&A has signaling effect and can get a positive market response. Furthermore, this study enhances the empirical evidence of overconfidence theory, i.e. optimistic management whose MD&A tend to positive overestimates the management's investments decision and also underestimate the potential risk to the firm.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-08-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44754051","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 : 2022-08-09DOI: 10.1108/ara-09-2021-0165
Dian Agustia, I. Harymawan, M. Nasih, J. Nowland
PurposeJoint board management meetings bring boards of directors and top management teams together to share information and discuss company matters. The authors investigate whether these joint meetings are associated with higher agency costs or information sharing benefits in the context of firm earnings management.Design/methodology/approachUsing publicly disclosed data on the frequency of joint board management meetings in Indonesian firms, the authors examine the relationship between joint board management meetings and earnings management during 2010–2017.FindingsThe authors find that more joint board management meetings are associated with lower earnings management. This is consistent with joint board management meetings providing net information sharing benefits. Additional testing indicates that the results are the strongest when firms hold more joint board management meetings than regular board meetings.Originality/valueThe findings suggest that in addition to holding regular board and audit committee meetings, formal meetings between boards of directors and top management teams are beneficial to shareholders by restricting opportunistic accounting choices by firm management.
{"title":"Joint board management meetings and earnings management","authors":"Dian Agustia, I. Harymawan, M. Nasih, J. Nowland","doi":"10.1108/ara-09-2021-0165","DOIUrl":"https://doi.org/10.1108/ara-09-2021-0165","url":null,"abstract":"PurposeJoint board management meetings bring boards of directors and top management teams together to share information and discuss company matters. The authors investigate whether these joint meetings are associated with higher agency costs or information sharing benefits in the context of firm earnings management.Design/methodology/approachUsing publicly disclosed data on the frequency of joint board management meetings in Indonesian firms, the authors examine the relationship between joint board management meetings and earnings management during 2010–2017.FindingsThe authors find that more joint board management meetings are associated with lower earnings management. This is consistent with joint board management meetings providing net information sharing benefits. Additional testing indicates that the results are the strongest when firms hold more joint board management meetings than regular board meetings.Originality/valueThe findings suggest that in addition to holding regular board and audit committee meetings, formal meetings between boards of directors and top management teams are beneficial to shareholders by restricting opportunistic accounting choices by firm management.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-08-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43897630","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 : 2022-07-12DOI: 10.1108/ara-10-2021-0195
Guoquan Xu, Fang-Chun Liu, Hsiao-Tang Hsu, Jerry W. Lin
PurposeThe choice of accounting methods is critical in measuring the performance and sustainability of a public defined benefit pension (DBP) plan, and such measurement has an impact on the effectiveness of the entire pension system. Prior literature rarely discusses the choice and rationale of the accounting assumptions for public DBP plans. This study fills the gap by investigating whether crucial plan characteristics, including operational performance, financial health, sponsor fiscal stress, and audit quality, are associated with the accounting assumptions of public DBP plans.Design/methodology/approachThe sample includes 1,170 plan-years from the intersection of the Center for Retirement Research and public DBPs' annual financial reports for the years 2001–2013. This study develops regression models to examine the relationship between the characteristics of public DBP practices and DBP accounting choices.FindingsThe empirical results show that the public DBPs that have better investment performance, higher funding status, less fiscal stress, and that are audited by Big 4 accounting firms are more likely to adopt conservative accounting choices.Originality/valueThe study documents the impact of crucial pension plan characteristics on public DBP managers' accounting choices, which were not extensively discussed in pension literature. The findings help us understand the rationale for employing different accounting treatments in the context of public pension fund practices. In addition, the study sheds light on policy implications for the future reform of public pension regulations.
{"title":"The association between public pension fund characteristics and pension accounting choices","authors":"Guoquan Xu, Fang-Chun Liu, Hsiao-Tang Hsu, Jerry W. Lin","doi":"10.1108/ara-10-2021-0195","DOIUrl":"https://doi.org/10.1108/ara-10-2021-0195","url":null,"abstract":"PurposeThe choice of accounting methods is critical in measuring the performance and sustainability of a public defined benefit pension (DBP) plan, and such measurement has an impact on the effectiveness of the entire pension system. Prior literature rarely discusses the choice and rationale of the accounting assumptions for public DBP plans. This study fills the gap by investigating whether crucial plan characteristics, including operational performance, financial health, sponsor fiscal stress, and audit quality, are associated with the accounting assumptions of public DBP plans.Design/methodology/approachThe sample includes 1,170 plan-years from the intersection of the Center for Retirement Research and public DBPs' annual financial reports for the years 2001–2013. This study develops regression models to examine the relationship between the characteristics of public DBP practices and DBP accounting choices.FindingsThe empirical results show that the public DBPs that have better investment performance, higher funding status, less fiscal stress, and that are audited by Big 4 accounting firms are more likely to adopt conservative accounting choices.Originality/valueThe study documents the impact of crucial pension plan characteristics on public DBP managers' accounting choices, which were not extensively discussed in pension literature. The findings help us understand the rationale for employing different accounting treatments in the context of public pension fund practices. In addition, the study sheds light on policy implications for the future reform of public pension regulations.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49027879","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 : 2022-07-11DOI: 10.1108/ara-04-2022-0077
D. M. Lopez, Michael A. Schuldt, J. G. Vega
PurposeThe purpose of this study is to examine the association between auditor industry specialization and accounting quality in the European Union (EU).Design/methodology/approachThis study employs a difference-in-differences design and explores audit quality from different industry specialist perspectives and different accounting standard regimes. Specifically, this study examines accounting quality among audits performed by non-industry specialists, EU member country-level industry specialists (EUM-level), EU community-level industry specialists (EUC-level), as well as joint industry specialists.FindingsThis study finds evidence of an improvement in accounting quality among audits performed by non-industry specialists post-IFRS. There is also evidence of an improvement in accounting quality among audits performed by EUC-level industry specialists post-IFRS. In addition, accounting quality among audits performed by EUM-level industry specialists seems to be greater than that of audits performed by non-industry specialists in either the pre-IFRS period or the post-IFRS period. Overall, the mandatory adoption of IFRS in the EU appears to be associated with an improvement in accounting quality among some auditor groups.Research limitations/implicationsIndustry specialization and accounting quality are not directly observable constructs; this study inevitably employs proxy measures for both. The findings of this study are location-specific and apply to mandatory IFRS adopters only.Practical implicationsThis study informs regulators with respect to the importance of industry specialist auditors and financial reporting quality, particularly within the context of the EU. The findings suggest that industry specialists were a significant accounting quality determinant during the mandatory adoption of IFRS. The findings have implications for regulators in the EU and beyond.Originality/valueThis study is among the first to investigate the impact of auditor specialization on accounting quality in the EU, particularly in connection with the adoption of IFRS.
{"title":"Do industry specialist auditors enhance accounting quality in the EU? Evidence from the pre-IFRS and mandatory post-IFRS periods","authors":"D. M. Lopez, Michael A. Schuldt, J. G. Vega","doi":"10.1108/ara-04-2022-0077","DOIUrl":"https://doi.org/10.1108/ara-04-2022-0077","url":null,"abstract":"PurposeThe purpose of this study is to examine the association between auditor industry specialization and accounting quality in the European Union (EU).Design/methodology/approachThis study employs a difference-in-differences design and explores audit quality from different industry specialist perspectives and different accounting standard regimes. Specifically, this study examines accounting quality among audits performed by non-industry specialists, EU member country-level industry specialists (EUM-level), EU community-level industry specialists (EUC-level), as well as joint industry specialists.FindingsThis study finds evidence of an improvement in accounting quality among audits performed by non-industry specialists post-IFRS. There is also evidence of an improvement in accounting quality among audits performed by EUC-level industry specialists post-IFRS. In addition, accounting quality among audits performed by EUM-level industry specialists seems to be greater than that of audits performed by non-industry specialists in either the pre-IFRS period or the post-IFRS period. Overall, the mandatory adoption of IFRS in the EU appears to be associated with an improvement in accounting quality among some auditor groups.Research limitations/implicationsIndustry specialization and accounting quality are not directly observable constructs; this study inevitably employs proxy measures for both. The findings of this study are location-specific and apply to mandatory IFRS adopters only.Practical implicationsThis study informs regulators with respect to the importance of industry specialist auditors and financial reporting quality, particularly within the context of the EU. The findings suggest that industry specialists were a significant accounting quality determinant during the mandatory adoption of IFRS. The findings have implications for regulators in the EU and beyond.Originality/valueThis study is among the first to investigate the impact of auditor specialization on accounting quality in the EU, particularly in connection with the adoption of IFRS.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-07-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44557363","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 : 2022-07-08DOI: 10.1108/ara-01-2022-0014
Vedika Saxena, Seshadev Sahoo
Purpose
This study aims to investigate the impact of banking relationships and ownership concentration on corporate cash holdings (CCH) in 333 Indian micro, small and medium-sized enterprises (MSMEs) for nine years (2011–2020).
Design/methodology/approach
The authors use system generalized method of moments approach to examine the impact of banking relationships and ownership concentration on CCH.
Findings
The paper finds that the firm's number of banking relationships share a concave (inverted U-shaped) relationship with the cash holding levels. Initially, the positive relationship may signal weak creditworthiness of MSMEs or be a consequence of bank free-rider monitoring issues. The negative effect after a certain level shows that the competition among banks reduces the firm's financial constraints and therefore makes the firms hoard less cash. The authors also document an inverse relationship between ownership concentration and cash holdings. The authors' results suggest that the presence of large shareholders acts as efficient monitors, reducing the risk of potential agency conflicts and thereby managerial entrenchment resulting in lower cash levels. This association remains unchanged for MSMEs in the service sector. However, the quadratic association between banking relationships and CCH vanishes in the presence of a service sector dummy in the regression model. The authors find a significant positive linear relationship in this regard.
Originality/value
To the best of the authors' knowledge, this is the first paper that studies banking relationships and ownership concentration as determinants of Indian MSMEs.
本文发现，企业的银行关系数量与现金持有水平呈凹形（倒 U 形）关系。起初，这种正相关关系可能表明中小微企业的信用度较弱，或者是银行搭便车监督问题的结果。达到一定水平后的负效应表明，银行间的竞争减少了企业的财务约束，从而使企业减少了现金囤积。作者还记录了所有权集中度与现金持有量之间的反比关系。作者的研究结果表明，大股东的存在起到了有效监督者的作用，降低了潜在代理冲突的风险，从而减少了管理阶层的固化，导致现金水平降低。对于服务业的中小微企业来说，这种关联性保持不变。然而，在回归模型中加入服务业虚拟变量后，银行关系与现金流量之间的二次关联就消失了。据作者所知，这是第一篇研究银行关系和所有权集中度作为印度中小微企业决定因素的论文。
{"title":"Impact of banking relationships and ownership concentration on corporate cash holdings in India","authors":"Vedika Saxena, Seshadev Sahoo","doi":"10.1108/ara-01-2022-0014","DOIUrl":"https://doi.org/10.1108/ara-01-2022-0014","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to investigate the impact of banking relationships and ownership concentration on corporate cash holdings (CCH) in 333 Indian micro, small and medium-sized enterprises (MSMEs) for nine years (2011–2020).</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The authors use system generalized method of moments approach to examine the impact of banking relationships and ownership concentration on CCH.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The paper finds that the firm's number of banking relationships share a concave (inverted U-shaped) relationship with the cash holding levels. Initially, the positive relationship may signal weak creditworthiness of MSMEs or be a consequence of bank free-rider monitoring issues. The negative effect after a certain level shows that the competition among banks reduces the firm's financial constraints and therefore makes the firms hoard less cash. The authors also document an inverse relationship between ownership concentration and cash holdings. The authors' results suggest that the presence of large shareholders acts as efficient monitors, reducing the risk of potential agency conflicts and thereby managerial entrenchment resulting in lower cash levels. This association remains unchanged for MSMEs in the service sector. However, the quadratic association between banking relationships and CCH vanishes in the presence of a service sector dummy in the regression model. The authors find a significant positive linear relationship in this regard.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>To the best of the authors' knowledge, this is the first paper that studies banking relationships and ownership concentration as determinants of Indian MSMEs.</p><!--/ Abstract__block -->","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140200590","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 : 2022-07-08DOI: 10.1108/ara-12-2021-0235
Murat Ocak, Serdar Ozkan, Gökberk Can
PurposeIn this paper, the authors examine the association between the amount of continuing professional education (CPE) hours per staff and audit quality in terms of discretionary accruals and audit opinion.Design/methodology/approachSeveral methodologies are adopted to test the hypotheses, including the ordinary least square (OLS) and logistic regression (Logistic). The authors also employ instrument variables regression with two least square (IVREG with 2SLS) and instrument variables probit model (IVProbit) to address the possible endogeneity and strengthen the validity of the main estimation results.FindingsThe main results show that there is a positive and significant relationship between CPE hours per staff and audit quality. As the authors grouped CPE into four areas (finance, auditing and accounting, tax, law and regulations and others) the results are more robust for the sub-sample “accounting and audit” and “others”. Moreover, the findings of this study suggest that CPE hours per staff do not affect audit quality significantly for Big4 audit firms compared to non-Big4 firms.Research limitations/implicationsThe sample size of the present study is quite small because the transparency reports of the audit firms in Turkey have been available since 2013 and the authors could not reach some auditor demographics at the individual level and some attributes at the audit firm level. Besides, some alternative audit quality measures, such as audit effort, audit fees are not employed because they are not disclosed.Originality/valueThis study contributes to the audit literature using Turkish audit firms. The authors believe that the setting of Turkey may yield interesting results because of the data it provides.
目的本文从可操纵性应计项目和审计意见两个方面考察了员工人均持续职业教育时数与审计质量之间的关系。设计/方法/方法采用几种方法来检验假设，包括普通最小二乘(OLS)和逻辑回归(logistic)。作者还采用了二最小二乘法的工具变量回归(IVREG with 2SLS)和工具变量probit模型(IVProbit)来解决可能的内禀性并加强主要估计结果的有效性。主要结果表明，员工人均CPE时数与审计质量之间存在显著的正相关关系。由于作者将CPE分为四个领域(财务，审计和会计，税收，法律和法规等)，结果对于子样本“会计和审计”和“其他”更为稳健。此外，本研究的结果表明，与非四大会计师事务所相比，每名员工的CPE时间对四大会计师事务所的审计质量没有显著影响。本研究的样本量相当小，因为土耳其审计公司的透明度报告自2013年以来一直可用，作者无法达到个人层面的一些审计师人口统计数据和审计公司层面的一些属性。此外，一些替代的审计质量度量，如审计工作量、审计费用，由于没有披露而没有被采用。原创性/价值本研究对使用土耳其审计事务所的审计文献有所贡献。作者认为，土耳其的背景可能会产生有趣的结果，因为它提供的数据。
{"title":"Continuing professional education and audit quality: evidence from an emerging market","authors":"Murat Ocak, Serdar Ozkan, Gökberk Can","doi":"10.1108/ara-12-2021-0235","DOIUrl":"https://doi.org/10.1108/ara-12-2021-0235","url":null,"abstract":"PurposeIn this paper, the authors examine the association between the amount of continuing professional education (CPE) hours per staff and audit quality in terms of discretionary accruals and audit opinion.Design/methodology/approachSeveral methodologies are adopted to test the hypotheses, including the ordinary least square (OLS) and logistic regression (Logistic). The authors also employ instrument variables regression with two least square (IVREG with 2SLS) and instrument variables probit model (IVProbit) to address the possible endogeneity and strengthen the validity of the main estimation results.FindingsThe main results show that there is a positive and significant relationship between CPE hours per staff and audit quality. As the authors grouped CPE into four areas (finance, auditing and accounting, tax, law and regulations and others) the results are more robust for the sub-sample “accounting and audit” and “others”. Moreover, the findings of this study suggest that CPE hours per staff do not affect audit quality significantly for Big4 audit firms compared to non-Big4 firms.Research limitations/implicationsThe sample size of the present study is quite small because the transparency reports of the audit firms in Turkey have been available since 2013 and the authors could not reach some auditor demographics at the individual level and some attributes at the audit firm level. Besides, some alternative audit quality measures, such as audit effort, audit fees are not employed because they are not disclosed.Originality/valueThis study contributes to the audit literature using Turkish audit firms. The authors believe that the setting of Turkey may yield interesting results because of the data it provides.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46148199","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 : 2022-07-05DOI: 10.1108/ara-02-2022-0033
Yoshiaki Amano
PurposeThis study examines the relation between negative goodwill (NGW) and operating performance after mergers and acquisitions (M&A).Design/methodology/approachThis is a comparative analysis of post-M&A operating performance for 228 transactions involving listed Japanese firms that generated negative or positive goodwill.FindingsFirst, post-M&A operating performance is lower when the transaction generates NGW. Second, the negative relation between NGW and post-M&A performance is stronger when managers have incentives for earnings management and when target firms perform poorly before M&A. Third, changes in the accounting treatment of NGW alter the relative importance of earnings management incentives and target firms' poor pre-M&A performance.Originality/valuePrior studies attribute the negative relation between NGW and post-M&A performance solely to acquiring firms' managers' earnings management incentives. The current study finds that the target firm's poor pre-M&A performance is also associated with the relation between NGW and post-M&A performance.
{"title":"Negative goodwill and postmerger operating performance: evidence from Japan","authors":"Yoshiaki Amano","doi":"10.1108/ara-02-2022-0033","DOIUrl":"https://doi.org/10.1108/ara-02-2022-0033","url":null,"abstract":"PurposeThis study examines the relation between negative goodwill (NGW) and operating performance after mergers and acquisitions (M&A).Design/methodology/approachThis is a comparative analysis of post-M&A operating performance for 228 transactions involving listed Japanese firms that generated negative or positive goodwill.FindingsFirst, post-M&A operating performance is lower when the transaction generates NGW. Second, the negative relation between NGW and post-M&A performance is stronger when managers have incentives for earnings management and when target firms perform poorly before M&A. Third, changes in the accounting treatment of NGW alter the relative importance of earnings management incentives and target firms' poor pre-M&A performance.Originality/valuePrior studies attribute the negative relation between NGW and post-M&A performance solely to acquiring firms' managers' earnings management incentives. The current study finds that the target firm's poor pre-M&A performance is also associated with the relation between NGW and post-M&A performance.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44351237","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 : 2022-06-28DOI: 10.1108/ara-11-2021-0203
I. Harymawan, M. Nasih, Nadia Klarita Rahayu, K. A. Kamarudin, Wan Adibah Wan Ismail
PurposeThis study aims to examine the relationship between CEO busyness and financial reporting quality in a country which implements a two-tier board system.Design/methodology/approachThis study includes firms listed on the Indonesian Stock Exchange during the 2010–2018 period. This study employs an ordinary least squares regression, the propensity score matching procedure, and a Heckman two-stage regression in testing the hypothesis.FindingsThis study finds that firms with busy directors have a higher financial reporting quality, and these results are robust to a battery or sensitivity analysis. The additional analyses also find that a busy CEO is negatively associated with the firm's financial reporting quality with decreasing income.Practical implicationsThis paper provides implications for policy-makers in the emerging market on devising policies on CEOs' appointments, especially when involving multiple directorships. Despite the general belief on the detrimental workload effects of busy directors, this study offers evidence supporting the opposite effect.Originality/valueAs many previous studies focused on the effect of director busyness on firm’s performance, this study focusses on the effect of CEO busyness on financial reporting quality. To the best of our knowledge, this study is the first to investigate this issue in an emerging market.
{"title":"Busy CEOs and financial reporting quality: evidence from Indonesia","authors":"I. Harymawan, M. Nasih, Nadia Klarita Rahayu, K. A. Kamarudin, Wan Adibah Wan Ismail","doi":"10.1108/ara-11-2021-0203","DOIUrl":"https://doi.org/10.1108/ara-11-2021-0203","url":null,"abstract":"PurposeThis study aims to examine the relationship between CEO busyness and financial reporting quality in a country which implements a two-tier board system.Design/methodology/approachThis study includes firms listed on the Indonesian Stock Exchange during the 2010–2018 period. This study employs an ordinary least squares regression, the propensity score matching procedure, and a Heckman two-stage regression in testing the hypothesis.FindingsThis study finds that firms with busy directors have a higher financial reporting quality, and these results are robust to a battery or sensitivity analysis. The additional analyses also find that a busy CEO is negatively associated with the firm's financial reporting quality with decreasing income.Practical implicationsThis paper provides implications for policy-makers in the emerging market on devising policies on CEOs' appointments, especially when involving multiple directorships. Despite the general belief on the detrimental workload effects of busy directors, this study offers evidence supporting the opposite effect.Originality/valueAs many previous studies focused on the effect of director busyness on firm’s performance, this study focusses on the effect of CEO busyness on financial reporting quality. To the best of our knowledge, this study is the first to investigate this issue in an emerging market.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44081831","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 : 2022-06-27DOI: 10.1108/ara-02-2022-0037
N. Alsharari
PurposeThis paper aims to explain the interaction of external and internal influences in the imposition of results-based budgeting (RBB) in a public sector organization, subsequent to public sector reforms.Design/methodology/approachThe paper uses an explanatory case study of a state-imposed RBB system, drawing evidence from in-depth interviews, document analysis, and direct observation. The paper draws on Alsharari's (2013) contextual framework which synthesizes three approaches to analyzing institutional change: Dillard et al.'s (2004) New Institutional Sociology (NIS) framework for analyzing externalities; Burns and Scapens' (2000) framework inspired by old institutional economics (OIE) for internal processes of change and Hardy (1996) power and politics mobilization model. In addition, Pettigrew's (1987) contextual framework is used for its holistic incorporation of different perspectives and to integrate theoretical perspectives.FindingsThe findings show that Jordan's National Reform Agenda represented a turning towards the New Public Management (NPM) model, following entrenched poor state budget performance. The findings also show that NPM ideas, such as results orientation and performance-based accountability, are invoked in response to common economic and social pressures, such as budget insufficiency and public antipathy to government service provision, as well as the pressures of globalization. Institutional analysis confirms the “path-dependent” and evolutionary nature of accounting change implemented in Jordan's customs agency. The study also concludes, from observation of the organization's work routines and practices, that the implementation of accounting change was not merely a symbolic innovation.Research limitations/implicationsThis study has significant implications for politicians, economists, academics and government leaders as it provides fieldwork evidence about the role of RBB in the economy and public policy. Changes at the political and economic level, particularly with respect to the introduction of the fiscal reforms and customs modernization projects, have resulted in changes to structures and systems at the organizational level, particularly the implementation of RBB. This study is subject to normal limitations. The role of legitimate power in the organizational change process can be subject to further examination, especially in the public sectors of developing countries. A longitudinal study could also affirm the institutional analysis of the present case study.Originality/valueThe study contributes to accounting literature by providing further understanding and a thick explanation of the dynamics of accounting change in the Jordanian public sector. It utilizes a contextual framework for studying accounting change that attempts to overcome the limitations of single-dimension theories, such as NIS and OIE, by integrating levels of analysis. The case study provides insight into how internal dynamics interact with exter
{"title":"Institutionalization of results-based budgeting in the public sector: political and economic pressures","authors":"N. Alsharari","doi":"10.1108/ara-02-2022-0037","DOIUrl":"https://doi.org/10.1108/ara-02-2022-0037","url":null,"abstract":"PurposeThis paper aims to explain the interaction of external and internal influences in the imposition of results-based budgeting (RBB) in a public sector organization, subsequent to public sector reforms.Design/methodology/approachThe paper uses an explanatory case study of a state-imposed RBB system, drawing evidence from in-depth interviews, document analysis, and direct observation. The paper draws on Alsharari's (2013) contextual framework which synthesizes three approaches to analyzing institutional change: Dillard et al.'s (2004) New Institutional Sociology (NIS) framework for analyzing externalities; Burns and Scapens' (2000) framework inspired by old institutional economics (OIE) for internal processes of change and Hardy (1996) power and politics mobilization model. In addition, Pettigrew's (1987) contextual framework is used for its holistic incorporation of different perspectives and to integrate theoretical perspectives.FindingsThe findings show that Jordan's National Reform Agenda represented a turning towards the New Public Management (NPM) model, following entrenched poor state budget performance. The findings also show that NPM ideas, such as results orientation and performance-based accountability, are invoked in response to common economic and social pressures, such as budget insufficiency and public antipathy to government service provision, as well as the pressures of globalization. Institutional analysis confirms the “path-dependent” and evolutionary nature of accounting change implemented in Jordan's customs agency. The study also concludes, from observation of the organization's work routines and practices, that the implementation of accounting change was not merely a symbolic innovation.Research limitations/implicationsThis study has significant implications for politicians, economists, academics and government leaders as it provides fieldwork evidence about the role of RBB in the economy and public policy. Changes at the political and economic level, particularly with respect to the introduction of the fiscal reforms and customs modernization projects, have resulted in changes to structures and systems at the organizational level, particularly the implementation of RBB. This study is subject to normal limitations. The role of legitimate power in the organizational change process can be subject to further examination, especially in the public sectors of developing countries. A longitudinal study could also affirm the institutional analysis of the present case study.Originality/valueThe study contributes to accounting literature by providing further understanding and a thick explanation of the dynamics of accounting change in the Jordanian public sector. It utilizes a contextual framework for studying accounting change that attempts to overcome the limitations of single-dimension theories, such as NIS and OIE, by integrating levels of analysis. The case study provides insight into how internal dynamics interact with exter","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41655026","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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