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Article
Publication date: 1 December 2022

Zhiying Hu, Yan Li, Beixin Lin and Gary Kleinman

The purpose of this study is to investigate the decision usefulness of key audit matters (KAMs) disclosures from the perspective of financial analysts.

Abstract

Purpose

The purpose of this study is to investigate the decision usefulness of key audit matters (KAMs) disclosures from the perspective of financial analysts.

Design/methodology/approach

Using data from two groups of Chinese-listed firms subject to different audit standards, the authors use a quasi-natural experiment and the difference-in-differences approach to examine the impact of KAMs on analyst forecasts. The authors also conduct a textual analysis on management disclosures as well as on the content of KAM disclosures.

Findings

The results of this study show that both forecast errors and dispersion have significantly declined for the firms disclosing KAMs compared to the firms without such disclosures. Further analysis presents evidence that KAM disclosures have resulted in simultaneous increase in management disclosures and audit quality. In addition, auditor characteristics, such as auditor’s dependence on client fees and its industry specialization, and firm’s characteristics, such as its ownership structure and its social connection with the auditor, appear to affect the informativeness of KAM disclosures. The authors also perform content analysis of KAMs to provide additional insight.

Research limitations/implications

As AH firms are required to adopt the expanded audit report one year before A shares firms, by design, there is only one year in which these two types of companies differ. Therefore, the results without overgeneralizing the impact of KAM disclosures should be interpreted. In addition, this study involves the Chinese market alone and, therefore, may be affected by factors peculiar to the functioning of the Chinese economy and financial markets.

Originality/value

The main contribution of this study lies in highlighting the salience of KAM context in shaping the relationship between auditors, managers and analysts and its collective impact on information environment. The findings of this study are significant in that they help establish the importance of KAM disclosures in helping to assure that higher quality financial information is available to capital markets, as well as information that is otherwise unavailable given disclosure mandates in China. This study adds to the literature on the importance of providing additional means of safeguarding auditor independence and on the value of auditor expertise in providing useful content in audit disclosures. Moreover, the findings suggest that the expanded audit report can help reduce the level of asymmetric information, especially for state-owned entities. They provide insight on how the new audit rule influences managers and auditors communicating complex accounting matters as well as the moderating effect of the social connections between auditors and firm executives.

Details

Managerial Auditing Journal, vol. 38 no. 3
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 2 May 2008

Beixin Lin, Zu‐Hsu Lee and Lance G. Gibbs

When firms are dealing with negative earnings and/or economic downturns, operational restructuring is often initiated as a rescue tool. Some firms recover and prevail, while the…

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Abstract

Purpose

When firms are dealing with negative earnings and/or economic downturns, operational restructuring is often initiated as a rescue tool. Some firms recover and prevail, while the others fail to survive and are subsequently delisted from stock exchange. The purpose of this paper is to identify factors that are significantly associated with the delisting risk of restructuring firms.

Design/methodology/approach

The authors draw on a sample of firms with negative earnings that undertook restructuring during the 2001 economic recession. Logistic regression estimation is used to examine the delisting risk of these firms following the restructuring.

Findings

The paper finds that delisting risk increases when firms undertake repetitive restructurings, massive workforce reduction, and large‐scale asset downsizing. Firms with high levels of debt and failure to cut costs and/or narrowing its focus on core competencies are also more likely to delist.

Practical implications

By analyzing and synthesizing the information from empirical data and business experience, this paper provides a guide for managers to effectively plan and implement a restructuring program to improve performance amid an economic downturn.

Originality/value

This is the first study to examine the survivability or delisting risk of a poorly performing firm undergoing restructuring amid an economic recession.

Details

Management Decision, vol. 46 no. 4
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 21 December 2020

Wang Chen, Luo Wei and Wu Yuefei

This paper traces the incorporation of western educational histories in the development of normal-school curricula during the late Qing Dynasty and the Republic of China…

Abstract

Purpose

This paper traces the incorporation of western educational histories in the development of normal-school curricula during the late Qing Dynasty and the Republic of China (1901–1944). It uses publication networks to show how the study of comparative educational history facilitated the international circulation of knowledge in the teaching profession, and how the “uses” of educational history were shaped by larger geopolitical forces.

Design/methodology/approach

This paper analyzes the international exchange of texts between normal schools in China and Japan and, subsequently, between normal schools in China and the United States. A database of 107 publications in the field of western educational history that were adopted in China reveals specific patterns of textual citation, cross-reference, and canon-formation in the field of educational historiography.

Findings

With conclusions derived from a combination of social network analysis and clustering analysis, this paper identifies three broad stages in China's development of normal-school curricula in comparative educational history: “Japan as Teacher,” “transitional period” and “America as Teacher.”

Research limitations/implications

Statistical analysis can reveal citation and reference patterns but not readers' understanding of the deeper meaning of texts – in this case, textbooks on the subject of western educational history. In addition, the types of publications analyzed in this study are relatively limited, the articles on the history of education in journals have not become the main objects of this study.

Originality/value

This paper uses both quantitative and qualitative methods to uncover the transnational circulation of knowledge in the field of comparative educational history during its formative period in China.

Details

History of Education Review, vol. 50 no. 1
Type: Research Article
ISSN: 0819-8691

Keywords

Article
Publication date: 11 October 2022

Teng Ma and Ya Liu

The role of corporate social responsibility (CSR) fulfillment is critical when building resilience of project-based organizations (PBOs). However, fulfilling CSR to build a highly…

Abstract

Purpose

The role of corporate social responsibility (CSR) fulfillment is critical when building resilience of project-based organizations (PBOs). However, fulfilling CSR to build a highly resilient PBO remains a black box problem. This study explores the different CSR combinations that enhance PBO resilience.

Design/methodology/approach

This study defines CSR in terms of shareholder, employee, and social CSR, and analyzes corporate characteristics in terms of corporate scale and nature. Data are collected from Hexun.com and the China Stock Market and Accounting Research Database (CSMAR). The qualitative comparative analysis (QCA) method is used to analyze 48 listed construction and engineering companies from China to explore the CSR configurations for PBOs in enhancing organizational resilience.

Findings

A large firm size is a necessary condition for high organizational resilience. We find six paths to build high and non-high resilience in PBOs, and the driving mechanisms of high and non-high resilience exhibit an asymmetric relationship.

Research limitations/implications

This study cracks the black box of CSR fulfillment and PBO resilience. It reveals the CSR configurations that enhance or inhibit the resilience of PBOs. It also provides scientific basis for PBOs in their fulfillment of CSR in response to crises, and the enhancement of organizational resilience. Future research can be expanded to other industries, as the study sample is only limited to civil engineering construction companies. Since this study uses cross-sectional data, time series can be introduced in the future to further explore the relationship between CSR and organizational resilience.

Practical implications

This study provides targeted suggestions that can help decision-makers of construction companies to determine how they can fulfill CSR to enhance organizational resilience. At the same time, it can provide intellectual support for PBOs to cope with systemic crises and promote the fulfillment of CSR.

Originality/value

In terms of theoretical value, on the one hand, this study verifies the relationship between CSR fulfillment and PBO resilience, revealing its mechanism of action and multiple paths; on the other hand, it provides a new way of thinking for management research methods and enriches the theoretical study of organizational resilience.

Details

Engineering, Construction and Architectural Management, vol. 31 no. 2
Type: Research Article
ISSN: 0969-9988

Keywords

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