Pub Date : 2023-11-06DOI: 10.1108/ara-09-2023-0253
Li Yao
Purpose This paper aims to discuss Harymawan et al . (2023) and suggest a few areas for improvement. Design/methodology/approach This paper critically assesses Harymawan et al .’s (2023) position in the extant literature and discusses pertinent aspects. Findings This paper's primary focus is on Harymawan et al .’s (2023) conceptual development, especially chief executive officers' (CEOs) role in footnote disclosures. Originality/value This paper's viewpoints are relevant to readers interested in corporate textual disclosure and governance.
{"title":"Discussion of busy CEO and financial statement footnotes readability: evidence from Indonesia","authors":"Li Yao","doi":"10.1108/ara-09-2023-0253","DOIUrl":"https://doi.org/10.1108/ara-09-2023-0253","url":null,"abstract":"Purpose This paper aims to discuss Harymawan et al . (2023) and suggest a few areas for improvement. Design/methodology/approach This paper critically assesses Harymawan et al .’s (2023) position in the extant literature and discusses pertinent aspects. Findings This paper's primary focus is on Harymawan et al .’s (2023) conceptual development, especially chief executive officers' (CEOs) role in footnote disclosures. Originality/value This paper's viewpoints are relevant to readers interested in corporate textual disclosure and governance.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":"80 5","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-11-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135584889","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 : 2023-11-02DOI: 10.1108/ara-12-2022-0301
Yeut Hong Tham
Purpose This study comprehensively reviews the global literature on busy boards and audit committees. Design/methodology/approach Six eight articles on busy boards and audit committees from prominent accounting journals are reviewed and analyzed under the “reputation” and “busyness” premise. Findings Most studies advocating the “reputation” hypothesis have the consensus that busy directors have their benefits (knowledge spillovers), particularly regarding sharing their in-depth knowledge, experiences and expertise. This phenomenon is pronounced for younger and IPO firms, which have high advising and financing needs. From the “busyness” perspective, busy directors are too overboard in carrying out their duty effectively and responsibly. Practical implications This study identifies future research avenues on busy boards/audit committees and suggests that policymakers and regulators should limit the number of board appointments. Originality/value This is the first study to extensively amalgamate research on busy directors and audit committees. It reveals the various proxies used to measure the busyness of board and audit committee members and the consequences of busyness.
{"title":"A global review of the literature on and proxies of busy boards and audit committees","authors":"Yeut Hong Tham","doi":"10.1108/ara-12-2022-0301","DOIUrl":"https://doi.org/10.1108/ara-12-2022-0301","url":null,"abstract":"Purpose This study comprehensively reviews the global literature on busy boards and audit committees. Design/methodology/approach Six eight articles on busy boards and audit committees from prominent accounting journals are reviewed and analyzed under the “reputation” and “busyness” premise. Findings Most studies advocating the “reputation” hypothesis have the consensus that busy directors have their benefits (knowledge spillovers), particularly regarding sharing their in-depth knowledge, experiences and expertise. This phenomenon is pronounced for younger and IPO firms, which have high advising and financing needs. From the “busyness” perspective, busy directors are too overboard in carrying out their duty effectively and responsibly. Practical implications This study identifies future research avenues on busy boards/audit committees and suggests that policymakers and regulators should limit the number of board appointments. Originality/value This is the first study to extensively amalgamate research on busy directors and audit committees. It reveals the various proxies used to measure the busyness of board and audit committee members and the consequences of busyness.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":"26 10","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-11-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135875337","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 : 2023-10-31DOI: 10.1108/ara-01-2023-0009
Kyungeun Kwon, Mi Zhou, Tawei Wang, Xu Cheng, Zhilei Qiao
Purpose Both the SEC (Securities and Exchange Commission) and the popular press have routinely criticized firms for the complexity of their financial disclosures. This study aims to investigate how financial analysts respond to the tone complexity of firm disclosures. Design/methodology/approach Using approximately 20,000 earnings conference call transcripts of S&P 1,500 firms between 2005 and 2015, the authors first calculate the abnormal negative tone, the measure of tone complexity; then use such tone measure in econometric models to examine analyst forecast behavior. The authors also test the robustness of the results under different model specifications, tone word lists and alternative tone measure calculations. Findings Consistent with the notion that analysts respond to the information demand from investors and incur more costs and effort to analyze firm disclosure when the tone is more complex, the authors find that higher tone complexity is positively and significantly associated with more analyst following, longer report duration, more forecast revisions, larger forecast error and larger forecast dispersion. In addition, the authors find that tone complexity has a long-term impact on analyst following but has a limited long-term impact on analyst report duration, analyst revision, forecast error and dispersion. Originality/value This study complements existing literature by highlighting the information role of financial analysts and by providing evidence that analysts incorporate the management tone disclosed during conference calls to adjust their forecasting behaviors. The results can be used by policymakers as evidence and support for further improving firm communication from a new dimension of disclosure tone.
{"title":"Tone complexity and analyst forecast behaviors: evidence from earnings conference calls","authors":"Kyungeun Kwon, Mi Zhou, Tawei Wang, Xu Cheng, Zhilei Qiao","doi":"10.1108/ara-01-2023-0009","DOIUrl":"https://doi.org/10.1108/ara-01-2023-0009","url":null,"abstract":"Purpose Both the SEC (Securities and Exchange Commission) and the popular press have routinely criticized firms for the complexity of their financial disclosures. This study aims to investigate how financial analysts respond to the tone complexity of firm disclosures. Design/methodology/approach Using approximately 20,000 earnings conference call transcripts of S&P 1,500 firms between 2005 and 2015, the authors first calculate the abnormal negative tone, the measure of tone complexity; then use such tone measure in econometric models to examine analyst forecast behavior. The authors also test the robustness of the results under different model specifications, tone word lists and alternative tone measure calculations. Findings Consistent with the notion that analysts respond to the information demand from investors and incur more costs and effort to analyze firm disclosure when the tone is more complex, the authors find that higher tone complexity is positively and significantly associated with more analyst following, longer report duration, more forecast revisions, larger forecast error and larger forecast dispersion. In addition, the authors find that tone complexity has a long-term impact on analyst following but has a limited long-term impact on analyst report duration, analyst revision, forecast error and dispersion. Originality/value This study complements existing literature by highlighting the information role of financial analysts and by providing evidence that analysts incorporate the management tone disclosed during conference calls to adjust their forecasting behaviors. The results can be used by policymakers as evidence and support for further improving firm communication from a new dimension of disclosure tone.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":"9 ","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135928778","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 : 2023-10-24DOI: 10.1108/ara-08-2023-0237
Stephen Gong
Purpose Nwaeze and Kalelkar (2023) examine the association between the functional background of the compensation committee chair (CC chair) and CEO compensation using S&P 500 firms from 2008 to 2018. They find that the CC chair's functional background is positively associated with the adoption of performance measures that are more aligned with such background. This discussion starts with Nwaeze and Kalelkar's (2023) incremental contribution, and offers suggestions on two areas for improvement. First, the authors could provide a more focused discussion of the conceptual framework. Second, the authors could improve their empirical design and interpretation of results. Avenues for future research are also suggested. Design/methodology/approach This discussion suggests methods and model specifications that may strengthen the research design, facilitate the interpretation of results, and provide additional insights. Findings The discussed paper could improve the reliability and rigor of the empirical tests and the conclusions by providing more contextual and granular information on firms' actual CEO compensation arrangements, using more careful testing procedures, and enhancing clarity in the writing. Originality/value Researchers could be interested in alternative perspectives and richer analyses of non-agency model based determinants of CEO compensation.
{"title":"Discussion of “the functional background of the compensation committee chair: the choice and weight of performance measures in CEO compensation”","authors":"Stephen Gong","doi":"10.1108/ara-08-2023-0237","DOIUrl":"https://doi.org/10.1108/ara-08-2023-0237","url":null,"abstract":"Purpose Nwaeze and Kalelkar (2023) examine the association between the functional background of the compensation committee chair (CC chair) and CEO compensation using S&P 500 firms from 2008 to 2018. They find that the CC chair's functional background is positively associated with the adoption of performance measures that are more aligned with such background. This discussion starts with Nwaeze and Kalelkar's (2023) incremental contribution, and offers suggestions on two areas for improvement. First, the authors could provide a more focused discussion of the conceptual framework. Second, the authors could improve their empirical design and interpretation of results. Avenues for future research are also suggested. Design/methodology/approach This discussion suggests methods and model specifications that may strengthen the research design, facilitate the interpretation of results, and provide additional insights. Findings The discussed paper could improve the reliability and rigor of the empirical tests and the conclusions by providing more contextual and granular information on firms' actual CEO compensation arrangements, using more careful testing procedures, and enhancing clarity in the writing. Originality/value Researchers could be interested in alternative perspectives and richer analyses of non-agency model based determinants of CEO compensation.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":"102 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135220538","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 : 2023-10-24DOI: 10.1108/ara-05-2023-0130
Santushti Gupta, Divya Aggarwal
Purpose This study aims to empirically examine environment, social, and governance (ESG) as an effective strategy to reduce major impediments for a corporation in the form of costs of capital (COC) and systematic risk, especially for emerging markets such as India. Design/methodology/approach A sample of 114 Indian firms from eight prominent industries based on Thomson Reuters classification (TRBC) are used in the study. A panel regression with industry-fixed effects is carried out to account for industry heterogeneity. For robustness, the authors also carry out a matched sample analysis. Findings The authors observe a negative and significant relationship between ESG performance with COC and systematic risk, respectively. For the pillar-wise analysis, the authors observe that only governance performance is negatively and significantly related to COC whereas the environmental and social performances are negative and insignificant. For ESG pillar level analysis for beta, the authors observe that all pillars are negative and significant, thus making a case for how firms can fine-tune their ESG strategies according to each pillar. Research limitations/implications As the ESG concept is still in a very nascent stage, data availability is a definite challenge in India. Practical implications As ESG is increasingly becoming relevant for multiple stakeholders, this study aims to provide evidence that can potentially guide the regulators, practitioners, and academicians to address the contemporary needs of these stakeholders, while also doing good for the firm in the traditional sense. Social implications The transition to a sustainable economy is a challenge for emerging economies, especially for a country like India where stakeholders are not only varied but also huge in number. With this study's contribution towards an incremental understanding of ESG, Indian regulators and policymakers can bring forward mandates as to ESG compliances that are rewarding for the firms and give them enough impetus towards complying with ESG norms. Originality/value The extant literature on ESG majorly discusses the relationship between ESG performance and financial performance. This study addresses the lacuna of the relationship of ESG with COC and beta in the Indian context.
{"title":"Shrinking the capital costs and beta risk impediments through ESG: study of an emerging market","authors":"Santushti Gupta, Divya Aggarwal","doi":"10.1108/ara-05-2023-0130","DOIUrl":"https://doi.org/10.1108/ara-05-2023-0130","url":null,"abstract":"Purpose This study aims to empirically examine environment, social, and governance (ESG) as an effective strategy to reduce major impediments for a corporation in the form of costs of capital (COC) and systematic risk, especially for emerging markets such as India. Design/methodology/approach A sample of 114 Indian firms from eight prominent industries based on Thomson Reuters classification (TRBC) are used in the study. A panel regression with industry-fixed effects is carried out to account for industry heterogeneity. For robustness, the authors also carry out a matched sample analysis. Findings The authors observe a negative and significant relationship between ESG performance with COC and systematic risk, respectively. For the pillar-wise analysis, the authors observe that only governance performance is negatively and significantly related to COC whereas the environmental and social performances are negative and insignificant. For ESG pillar level analysis for beta, the authors observe that all pillars are negative and significant, thus making a case for how firms can fine-tune their ESG strategies according to each pillar. Research limitations/implications As the ESG concept is still in a very nascent stage, data availability is a definite challenge in India. Practical implications As ESG is increasingly becoming relevant for multiple stakeholders, this study aims to provide evidence that can potentially guide the regulators, practitioners, and academicians to address the contemporary needs of these stakeholders, while also doing good for the firm in the traditional sense. Social implications The transition to a sustainable economy is a challenge for emerging economies, especially for a country like India where stakeholders are not only varied but also huge in number. With this study's contribution towards an incremental understanding of ESG, Indian regulators and policymakers can bring forward mandates as to ESG compliances that are rewarding for the firms and give them enough impetus towards complying with ESG norms. Originality/value The extant literature on ESG majorly discusses the relationship between ESG performance and financial performance. This study addresses the lacuna of the relationship of ESG with COC and beta in the Indian context.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":"80 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135220543","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}
Purpose To measure the dynamic features of compassion as an emotional and behavioral construct, the present research used a univariate latent growth modeling (LGM) approach within the structural equation modeling (SEM) framework. The aim was to trace the dynamic development of compassion longitudinally in accounting and business students during a three-credit English course at university. Design/methodology/approach The suggested method ensures the measurement invariance over time, deals with the first order latent variable, traces its growth and takes into account the measurement errors. This longitudinal analytical method was used to explore the initial state and the growth of compassion in four points of time during a language course. The data were collected from 60 adult accounting and business students in four time phases using Sprecher and Fehr's Compassionate Love Scale and were analyzed in Mplus 8.4 with univariate LGM. Findings The model fit was accepted and the invariance of the latent factor was confirmed over time. The negative covariance between intercept and slope (second-order latent variables) suggested that lower initial scores in L2 learners' compassion show a faster increase in compassion over time as the mean of slope is larger than that of the intercept. L2 learners who started off at a higher level of compassion showed a slower change in compassion over time. This can be at least partly explained by the teacher's motivating role or learners' compassion but needs to be further explored in complementary qualitative phases for deeper insights. Originality/value In the present research, awareness was raised of the developmental nature of compassion as an emotional and behavioral construct essential to the accounting and business profession. The great strength of this research lies in the dynamic approach to the compassion construct and the LGM used to capture the temporal growth of compassion and how it evolved through the L2 course.
{"title":"Temporal changes of compassion in accounting and business students in an English course: a longitudinal study in higher education","authors":"Arash Arianpoor, Elham Yazdanmehr, Majid Elahi Shirvan","doi":"10.1108/ara-02-2023-0040","DOIUrl":"https://doi.org/10.1108/ara-02-2023-0040","url":null,"abstract":"Purpose To measure the dynamic features of compassion as an emotional and behavioral construct, the present research used a univariate latent growth modeling (LGM) approach within the structural equation modeling (SEM) framework. The aim was to trace the dynamic development of compassion longitudinally in accounting and business students during a three-credit English course at university. Design/methodology/approach The suggested method ensures the measurement invariance over time, deals with the first order latent variable, traces its growth and takes into account the measurement errors. This longitudinal analytical method was used to explore the initial state and the growth of compassion in four points of time during a language course. The data were collected from 60 adult accounting and business students in four time phases using Sprecher and Fehr's Compassionate Love Scale and were analyzed in Mplus 8.4 with univariate LGM. Findings The model fit was accepted and the invariance of the latent factor was confirmed over time. The negative covariance between intercept and slope (second-order latent variables) suggested that lower initial scores in L2 learners' compassion show a faster increase in compassion over time as the mean of slope is larger than that of the intercept. L2 learners who started off at a higher level of compassion showed a slower change in compassion over time. This can be at least partly explained by the teacher's motivating role or learners' compassion but needs to be further explored in complementary qualitative phases for deeper insights. Originality/value In the present research, awareness was raised of the developmental nature of compassion as an emotional and behavioral construct essential to the accounting and business profession. The great strength of this research lies in the dynamic approach to the compassion construct and the LGM used to capture the temporal growth of compassion and how it evolved through the L2 course.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":"57 6","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135567598","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 : 2023-10-20DOI: 10.1108/ara-07-2023-0197
Kuldeep Singh
Purpose Environmental, social and governance (ESG) issues have become the cornerstone of investment decisions in firms today. With that, publicly traded ESG indices (like the BSE ESG 100 index in India) have come into existence. The existing literature signifies that ESG generates financial implications and induces stability. The current study aims to test whether the firms listed on the ESG index (ESG-sensitive firms) face less financial distress than those not listed on such an index. Design/methodology/approach The study applies panel data difference-in-differences (DID) regression by considering ESG as an unstaggered treatment to 74 non-financial firms listed on India's Bombay Stock Exchanges (BSE) 100 index. In total, 42 firms are ESG treated as they got listed on the BSE ESG 100 index, formed in 2017. The remaining 32 firms form the control group. The confidence intervals and standard errors are estimated using clustered robust errors and the Donald and Lang method. Findings Listing on the ESG index matters for financial stability; differences in financial distress are significant on financial distress. ESG-sensitive firms face less financial distress than non-ESG firms (or firms not perceived as ESG-sensitive). The results are consistent across two financial distress measures, Altman z-scores for emerged and emerging markets. Thus, the DID in distress status between ESG-sensitive and non-ESG firms matter. Practical implications The study creates vibrant implications for practitioners using ESG to reduce financial distress. Originality/value The study is one of its kind to test the treatment effects of ESG on firm value and quantify treatment effects on financial distress.
环境、社会和治理(ESG)问题已成为当今企业投资决策的基石。因此，上市的ESG指数(如印度的BSE ESG 100指数)应运而生。现有文献表明，ESG产生财务影响并诱导稳定性。本研究旨在检验在ESG指数上上市的公司(ESG敏感公司)是否比未在该指数上上市的公司面临更少的财务困境。设计/方法/方法本研究采用面板数据差分回归(DID)，将ESG作为非交错处理，对印度孟买证券交易所(BSE) 100指数上市的74家非金融公司进行了分析。总共有42家公司在2017年成立的BSE ESG 100指数上市时受到ESG待遇。其余32家公司组成对照组。使用聚类鲁棒误差和Donald and Lang方法估计置信区间和标准误差。ESG指数的上市对金融稳定至关重要;财务困境差异对财务困境影响显著。与非esg公司(或不被视为esg敏感的公司)相比，esg敏感公司面临的财务困境更小。在新兴市场和新兴市场的Altman z-score两项金融危机指标中，结果是一致的。因此，在esg敏感公司和非esg公司之间处于困境的DID很重要。该研究为使用ESG来减少财务困境的从业者创造了充满活力的启示。本研究是检验ESG对企业价值的处理效果，量化ESG对财务困境的处理效果的研究之一。
{"title":"Listing on environmental, social and governance index and financial distress: does the difference-in-differences matter?","authors":"Kuldeep Singh","doi":"10.1108/ara-07-2023-0197","DOIUrl":"https://doi.org/10.1108/ara-07-2023-0197","url":null,"abstract":"Purpose Environmental, social and governance (ESG) issues have become the cornerstone of investment decisions in firms today. With that, publicly traded ESG indices (like the BSE ESG 100 index in India) have come into existence. The existing literature signifies that ESG generates financial implications and induces stability. The current study aims to test whether the firms listed on the ESG index (ESG-sensitive firms) face less financial distress than those not listed on such an index. Design/methodology/approach The study applies panel data difference-in-differences (DID) regression by considering ESG as an unstaggered treatment to 74 non-financial firms listed on India's Bombay Stock Exchanges (BSE) 100 index. In total, 42 firms are ESG treated as they got listed on the BSE ESG 100 index, formed in 2017. The remaining 32 firms form the control group. The confidence intervals and standard errors are estimated using clustered robust errors and the Donald and Lang method. Findings Listing on the ESG index matters for financial stability; differences in financial distress are significant on financial distress. ESG-sensitive firms face less financial distress than non-ESG firms (or firms not perceived as ESG-sensitive). The results are consistent across two financial distress measures, Altman z-scores for emerged and emerging markets. Thus, the DID in distress status between ESG-sensitive and non-ESG firms matter. Practical implications The study creates vibrant implications for practitioners using ESG to reduce financial distress. Originality/value The study is one of its kind to test the treatment effects of ESG on firm value and quantify treatment effects on financial distress.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135567779","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}
Purpose The study examines the influence of a firm's life cycle on the cash flow classification of Indian firms. Design/methodology/approach The study employs Dickinson's (2011) cash flow patterns to classify firm years under various life-cycle stages. Cash flow classification is employed to measure a firm's classification shifting (CS) practices. The study includes Indian firms listed on the Bombay Stock Exchange during 2012–2020, an ordinary least squares regression model, a fixed-effect model and a panel corrected with standard error regression method. Findings Firms face different opportunities and challenges at different stages of the firm's life cycle and therefore adopt cash flow CS. The results show that firms adopt cash flow CS during introduction, growth and decline stage of life cycle either to boost or to reduce operating cash flows. Originality/value This study is one of its kind to study the influence of a firm's life cycle on the cash flow classification of Indian firms.
{"title":"Firm's life cycle and cash flow classification: evidence from Indian firms","authors":"Kalyani Mulchandani, Ketan Mulchandani, Megha Jain","doi":"10.1108/ara-08-2023-0213","DOIUrl":"https://doi.org/10.1108/ara-08-2023-0213","url":null,"abstract":"Purpose The study examines the influence of a firm's life cycle on the cash flow classification of Indian firms. Design/methodology/approach The study employs Dickinson's (2011) cash flow patterns to classify firm years under various life-cycle stages. Cash flow classification is employed to measure a firm's classification shifting (CS) practices. The study includes Indian firms listed on the Bombay Stock Exchange during 2012–2020, an ordinary least squares regression model, a fixed-effect model and a panel corrected with standard error regression method. Findings Firms face different opportunities and challenges at different stages of the firm's life cycle and therefore adopt cash flow CS. The results show that firms adopt cash flow CS during introduction, growth and decline stage of life cycle either to boost or to reduce operating cash flows. Originality/value This study is one of its kind to study the influence of a firm's life cycle on the cash flow classification of Indian firms.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":"298 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135303888","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 : 2023-10-06DOI: 10.1108/ara-04-2023-0119
Thomas Kim, Li Sun
Purpose Using a sample of oil and gas firms in the USA, the study examines the relation between the presence of hedging and annual report readability. Design/methodology/approach The authors use regression analysis to examine the relation between the presence of hedging and annual report readability. Findings The authors find that annual reports of firms with the use of hedging are less readable (i.e. difficult to read and understand). The authors also find that the primary results are more pronounced for firms with a higher level of business volatility. Originality/value The study contributes to the finance literature on the use and value of hedging and to the accounting literature on the determinants of annual report readability. The Securities and Exchange Commission (SEC) has persistently asked companies to improve the readability of their disclosures to stakeholders (SEC, 1998; 2013, 2014). Hence, the study not only identifies a potential determinant (i.e. hedging) that may influence the level of readability but also supports the current regulatory policy by the SEC, which is encouraging companies to improve readability.
{"title":"Energy hedging and annual report readability","authors":"Thomas Kim, Li Sun","doi":"10.1108/ara-04-2023-0119","DOIUrl":"https://doi.org/10.1108/ara-04-2023-0119","url":null,"abstract":"Purpose Using a sample of oil and gas firms in the USA, the study examines the relation between the presence of hedging and annual report readability. Design/methodology/approach The authors use regression analysis to examine the relation between the presence of hedging and annual report readability. Findings The authors find that annual reports of firms with the use of hedging are less readable (i.e. difficult to read and understand). The authors also find that the primary results are more pronounced for firms with a higher level of business volatility. Originality/value The study contributes to the finance literature on the use and value of hedging and to the accounting literature on the determinants of annual report readability. The Securities and Exchange Commission (SEC) has persistently asked companies to improve the readability of their disclosures to stakeholders (SEC, 1998; 2013, 2014). Hence, the study not only identifies a potential determinant (i.e. hedging) that may influence the level of readability but also supports the current regulatory policy by the SEC, which is encouraging companies to improve readability.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":"100 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135303897","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 : 2023-09-28DOI: 10.1108/ara-02-2023-0062
Moh. Riskiyadi
Purpose This study aims to compare machine learning models, datasets and splitting training-testing using data mining methods to detect financial statement fraud. Design/methodology/approach This study uses a quantitative approach from secondary data on the financial reports of companies listed on the Indonesia Stock Exchange in the last ten years, from 2010 to 2019. Research variables use financial and non-financial variables. Indicators of financial statement fraud are determined based on notes or sanctions from regulators and financial statement restatements with special supervision. Findings The findings show that the Extremely Randomized Trees (ERT) model performs better than other machine learning models. The best original-sampling dataset compared to other dataset treatments. Training testing splitting 80:10 is the best compared to other training-testing splitting treatments. So the ERT model with an original-sampling dataset and 80:10 training-testing splitting are the most appropriate for detecting future financial statement fraud. Practical implications This study can be used by regulators, investors, stakeholders and financial crime experts to add insight into better methods of detecting financial statement fraud. Originality/value This study proposes a machine learning model that has not been discussed in previous studies and performs comparisons to obtain the best financial statement fraud detection results. Practitioners and academics can use findings for further research development.
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