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1 – 10 of 46Matthew A. Notbohm, Jeffrey S. Paterson and Adrian Valencia
Prior research finds evidence that audit quality is positively associated with the joint purchase of tax nonaudit services (NAS) and concludes that jointly provided tax services…
Abstract
Prior research finds evidence that audit quality is positively associated with the joint purchase of tax nonaudit services (NAS) and concludes that jointly provided tax services result in audit-related knowledge spillovers that lead to improved audit quality. We extend this line of research. We examine the relation between auditor-provided tax services and restatements and determine whether this relation differs when the auditor is a small or large accounting firm. We also examine whether the Securities Exchange Commission’s restrictions on certain tax consulting practices (SEC, 2006) altered this relation. Specifically, we measure whether the probability of financial statement restatements varies with (1) variation in accounting firm size (measured as PCAOB annually inspected firms versus PCAOB triennially inspected firms), and (2) the joint provision of audit and tax services. We find a negative relation between auditor-provided tax services and restatements which is consistent with prior research. We also find that this relation is significantly more negative when the auditor is a small accounting firm. Finally, we find that the lower probability of a restatement associated with the joint provision of audit and tax services persists regardless of auditor size after the SEC-imposed restrictions on certain tax consulting services in 2006. Our study provides evidence that accounting firms, and particularly small accounting firms, benefit from knowledge spillovers when jointly providing audit and tax services and these benefits lead to improved audit quality. Prior research concludes that large auditors provide higher audit quality and that the provision of tax services improves audit quality. Our results provide evidence that audit quality improvements are greater for small auditors and their clients. This improvement narrows that audit quality gap between large and small auditors. We do not find evidence that the SEC’s restrictions on certain tax consulting services altered the relation between audit quality and tax services.
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Adrian A. Díaz-Faes and María Bordons
Science is subject to a normative structure that includes how the contributions and interactions between scientists are rewarded. Authorship and citations have been the key…
Abstract
Purpose
Science is subject to a normative structure that includes how the contributions and interactions between scientists are rewarded. Authorship and citations have been the key elements within the reward system of science, whereas acknowledgements, despite being a well-established element in scholarly communication, have not received the same attention. The purpose of this paper is to put forward the bearing of acknowledgements in the humanities to bring to the foreground contributions and interactions that, otherwise, would remain invisible through traditional indicators of research performance.
Design/methodology/approach
The study provides a comprehensive framework to understanding acknowledgements as part of the reward system with a special focus on their value in the humanities as a reflection of intellectual indebtedness. The distinctive features of research in the humanities are outlined and the role of acknowledgements as a source of contributorship information is reviewed to support these assumptions.
Findings
“Peer interactive communication” is the prevailing support thanked in the acknowledgements of humanities, so the notion of acknowledgements as “super-citations” can make special sense in this area. Since single-authored papers still predominate as publishing pattern in this domain, the study of acknowledgements might help to understand social interactions and intellectual influences that lie behind a piece of research and are not visible through authorship.
Originality/value
Previous works have proposed and explored the prevailing acknowledgement types by domain. This paper focusses on the humanities to show the role of acknowledgements within the reward system and highlight publication patterns and inherent research features which make acknowledgements particularly interesting in the area as a reflection of the socio-cognitive structure of research.
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Soumya Bhadury and Bhanu Pratap
In the economic literature, a crisis has been thematically defined around bank runs, failure of large financial corporations, and financial distress. Section 1 summarizes our…
Abstract
In the economic literature, a crisis has been thematically defined around bank runs, failure of large financial corporations, and financial distress. Section 1 summarizes our learnings about international banking crisis, in terms of the origin and impact of such crises. This provides us an international benchmark before we delve deeper into India's banking distress, its size and trends. Section 2 focuses on the twin-balance-sheet crisis in India. On one side, corporate firms recklessly overleveraged, resulting in excess capacities and business diversification. On the other side, banks, both private and public, fell prey to excessive and procyclical credit lending and improper monitoring. Overall, too many projects were left too weakly monitored. Separately, we have focused on two subsections, first, how the financial institutions in India have overstretched their credit-disposal limit during market upturns. Second, we found absence of any theoretically grounded approaches to determine the capital-adequacy ratios (CARs) for the banks. In Section 3, we have identified the steps taken so far by the Banking regulator and the Government to resolve the crisis. Further, we critically examine the role of Korea Asset Management Corporation (KAMCO) towards a successful non-performing assets (NPAs) resolution in South Korea. Few key takeaways include, (1) establishing a public asset-management company (AMC) focused on maximization of recoveries and resolution of stressed assets, (2) well-defined governance structure for the AMC ensuring it works on market principles, shielded from political interferences, and (3) realistic asset valuation and transfer price that ensures limited downside risks for the public AMC.
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Van Dan Dang and Khac Quoc Bao Nguyen
The study explores how banks design their financial structure and asset portfolio in response to monetary policy changes.
Abstract
Purpose
The study explores how banks design their financial structure and asset portfolio in response to monetary policy changes.
Design/methodology/approach
The authors conduct the research design for the Vietnamese banking market during 2007–2018. To ensure robust findings, the authors employ two econometric models of static and dynamic panels, multiple monetary policy indicators and alternative measures of bank leverage and liquidity.
Findings
Banks respond to monetary expansion by raising their financial leverage on the liability side and cutting their liquidity positions on the asset side. Further analysis suggests that larger banks' financial leverage is more responsive to monetary policy changes, while smaller banks strengthen the potency of monetary policy transmission toward bank liquidity. Additionally, the authors document that lower interest rates induce a beneficial effect on the net stable funding ratio (NSFR) under Basel III guidelines, implying that banks appear to modify the composition of liabilities to improve the stability of funding sources.
Originality/value
The study is the first attempt to simultaneously examine the impacts of monetary policy on both sides of bank balance sheets, across various banks of different sizes under a multiple-tool monetary regime. Besides, understanding how banks organize their stable funding sources and illiquid assets amid monetary shocks is an innovation of this study.
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