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To the authors’ knowledge, this paper is the first to use Detail I/B/E/S to study directly the timeliness of security analysts’ next-year earnings-per-share (EPS) estimates relative to the SEC filings of annual (10-K) and quarterly (10-Q) financial statements. Although the authors do not prove a causal relationship, they provide evidence that the average time from firms’ filings of 10-Ks and 10-Qs to the release of analysts’ annual EPS forecasts during short timeframes (for example, 15-day timeframe from a 10-K’s SEC file date) subsequent to the 10-K and 10-Q filing dates significantly shortened with XBRL implementation and then remained relatively constant following implementation.

Using filing dates hand-collected from the SEC website for 10-Ks during 2009-2011 and filing dates for 10-Ks and 10-Qs during 2003-2014 input from Compustat along with analysts’ estimated values for next year EPS, actual estimated next year EPS realized and estimate announcement dates in Detail I/B/E/S, the authors study the days from 10-K and 10-Q file dates to announcement dates and the per cent errors for individual estimates during per- and post-XBRL eras.

The authors find that analysts are announcing next-year EPS forecasts significantly more frequently and in significantly shorter time in zero to 15 days immediately following 10-K and 10-Q file dates post-XBRL as compared to pre-XBRL. However, the authors do not find a significant change in forecast accuracy post-XBRL as compared to pre-XBRL.

Because this study uses short timeframes immediately following the events (filings of 10-Ks and 10-Qs), the relationship between 10-Ks and 10-Qs with and without XBRL and improved forecast timeliness is strengthened. However, even this strengthened difference-in-difference methodology does not establish causality. Future research may determine whether XBRL or other factors cause the improved forecast timeliness the authors’ evidence.

This improved efficiency may become critical if financial statement reporting expands as a result of new innovations such as Big Data and continuous reporting. In the future, users may be able to electronically connect to financial statement data that firms are maintaining on a perpetual basis on the SEC website and continuously monitor and analyze the financial statement data dynamically in real time. If so, then unquestionably, XBRL will have played a critical role in bringing about this future innovation.

Whereas previous studies have utilized Summary IBES data to assess the impact of XBRL on analyst forecasts, the authors use Detail IBES to study the effects of XBRL adoption directly by measuring days from 10-K and 10-Q file dates in Compustat to each estimate’s announcement date recorded in IBES and by computing the per cent error using each estimate’s VALUE and ACTUAL recorded in Detail IBES. The authors are the first to evidence a significant shortening in average days and an increase in per cent of 30-day counts in the zero- to 15-day timeframe immediately following the fillings of 10-K s and 10-Qs.

eXtensible Business Reporting Language (XBRL) is an important new information and communication technology for the electronic communication of business and financial data. International research shows unacceptably low levels of awareness and adoption of XBRL. This paper aims to investigate the level of awareness of XBRL in South Africa among chartered accountants. Furthermore, it aims to consider the factors influencing adoption of XBRL and the impact of the economic circumstances on the decision to adopt XBRL.

The research was conducted with data collected through a structured, self‐administered web‐based survey sent to 11,458 chartered accountants. Chartered accountants will be primarily responsible for the implementation of XBRL at organisations.

The findings are largely in line with international studies, indicating a low level of awareness and slow adoption of the new technology. The major reasons cited for not adopting XBRL are that it is not yet mandatory in South Africa to do so and in the view of the respondents there is not any benefit in adopting XBRL. The results indicated that the economic circumstances did not have any effect on the decision to implement XBRL, be it either to implement or not to implement XBRL.

It is concluded that the business case for XBRL, internationally and in South Africa, should be made stronger for awareness and adoption rates to improve. The adoption of XBRL is, by implication, important and relevant to everyone with an interest in information management.

The purpose of this paper is to investigate the perceptions of auditor independence between auditors, bank‐loan officers, and financial analysts in Bahrain.

This study examines the effect of 41 independence‐enhancing and – threatening Factors on the perceptions of auditor, bank‐loan officers, and financial analysts regarding auditor independence in Bahrain. Out of 450 questionnaires distributed, 281 usable responses were received, representing a response rate of 62.4 percent.

Overall, the three groups agree on the classification of the 41 factors into two groups; however, they do not agree on the relative importance of those factors on their perception of auditor independence. Economic reliance of auditors on their clients and the provisions of non‐audit service, competition, and long tenure of audit services are considered the most important independence‐threatening factors. The risks posed to auditors in fulfilling their audit engagement, regulatory rights and requirements surrounding auditor change, regulation concerning the appointment/remuneration of auditors, and the disclosure of financial and nonfinancial relationships are among the most important factors that are perceived by the three groups to enhance auditor independence.

The samples did not include all users of financial statements; the samples were drawn only from institutions that were willing to take part, and consequently the results might not be applicable to those that did not take part in the study; and data were collected using a survey questionnaire and this approach is subject to certain types of bias such as response bias, which may affect the reliability of the respondents' answers.

The paper can inform policy makers, governments, and professional accounting bodies in emerging markets in countries that share similar economic, political, and cultural environment on how policies and frameworks related to auditor independence can be structured to ensure adequate regulation of the capital market, and enhance the awareness of users and auditors about the contextual factors surrounding the role of an auditor, in addition to the possible threats and enhancing factors that affect auditor independence.

The paper offers rich data on the perceptions of auditors' independence of auditors and users of financial statements. This is the first time, this type of research has been conducted in Bahrain.

Accounting scandals and earnings management problems at large firms such as Global Crossing and Enron have resulted in lots of wealth loss not only to corporate investors but also led tremendous damage to societies. Hence, policymakers and academic researchers have started to explore mechanisms to prevent improprieties in financial reporting and further enhance firm value. Using data from United States (US)-listed companies between 2000 and 2018, this article explores the effect of ex-military executives on earnings quality, the role of financial analysts in their interplay and the firm value implication of earnings quality driven by ex-military executives.

This study employs a firm fixed-effects model to validate the main conjecture and adopts the weighted least squares, Granger causality analysis, instrumental variable approach, propensity score matching, entropy balancing approach and dynamic system Generalized Method of Moments (GMM) estimator to address robustness and endogeneity issues.

Authors reveal that companies run by ex-military senior executives exhibit lower levels of accruals-based and real earnings management than those without. The effect of management military leadership on constraining earnings management is more prominent for companies with low analyst coverage, suggesting that the military experience of executives could be a substitute for external monitoring. Authors also find that these ethical managers alleviate the negative impact of earnings management on firm value and that companies managed by these managers exhibit higher firm performance.

This study highlights the importance of the intrinsic motivation behind the effect of military experience on senior managers' personalities and offers essential stakeholder-related implications regarding the effect of military experience. The military experience of senior managers helps facilitate the attainment of broader corporate governance and economic objectives.

This article adds new insights to the literature on the role of managerial military experience in decision-making processes, financial reporting outcomes and firm performance by employing the upper echelons and imprinting theoretical perspectives.

This case is meant for MBA students as a part of their leadership/information technology and system curriculum. It is suitable for classes in both offline and online mode.

Human resources management/information technology and systems.

The case discusses how Poppy Gustafsson (Gustafsson) (she), Cofounder and Chief Executive Officer of Darktrace plc, one of the world’s largest cyber-AI companies, is reinventing enterprise security by using artificial intelligence (AI) to detect and respond to cyberthreats to businesses and protect the public. Darktrace’s technology leverages the principles of the human immune system to autonomously defend organizations from cyberattacks, insider threats and AI warfare. In addition to leading a cutting-edge cybersecurity company, Gustafsson evangelizes gender diversity at Darktrace where 40% of employees and four C-level executives are women, a number nearly unheard of in the tech sector.The case chronicles the journey of Gustafsson and how she led the company to growth and success. Under her leadership, Darktrace has grown into a market leader in the AI cybersecurity space serving 5,600 customers in 100 countries, as of June 2021. Gustafsson not only redefined the cybersecurity space but also inspired women to pursue a career in the field of cybersecurity. She also collaborated with a social enterprise called WISE to encourage more girls to consider STEM careers.However, along the way, she faced several challenges including growing competition, procuring funds from investors, cybersecurity talent shortage and training personnel. Going forward, some of the challenges before Gustafsson would be to meet the changing cyber protection demands of customers; hire, train and retain highly skilled cybersecurity personnel; beat the competition in a saturated cybersecurity services space; sustain revenue growth; and post profits as Darktrace had incurred losses every year since its inception.

This case is designed to enable students to: understand the issues and challenges women face in the field of cybersecurity; understand the qualities required for a woman leader to lead a technology firm; study the leadership and management style of Gustafsson; understand the importance of transformational leadership in management; understand the role of Gustafsson in Darktrace’s growth and success; analyze the traits that Gustafsson possesses as a tech leader in an emerging cybersecurity space; understand the importance of gender diversity in cybersecurity; and analyze the challenges faced by Gustafsson going forward and explore ways in which she can overcome them.

CSS: 11 Strategy.

Achieving sustainable development goals (SDGs) demands mobilising finance and aligning it with elements of sustainability. This study, thus, aims to investigate the impact of financial development of an economy on the achievement of SDGs.

The authors analyse a sample of 35 Asian countries based on their SDG trends and representative SDG indicators. An ordered probit model is employed for analysing the impact of financial development on the SDG trend. Subsequently, pairwise Granger causality test is employed for investigating the causality between the SDG and the financial development.

The findings indicate that financial development positively impacts the progress towards SDG achievement in the areas: (1) gender equality, (2) economic growth, (3) industry, innovation and infrastructure and (4) sustainable cities and communities; and adversely impacts the climate action. The causality test indicates a bidirectional causality for financial development and industry, infrastructure and innovation, financial development and sustainable cities and communities and financial development and climate action, and unidirectional causality from gender equality to financial development.

The findings have implications for the government of a nation as well as the private businesses. The goals allow businesses to implement well-articulated strategies which pay attention to the SDGs.

The novelty of the paper is that the authors provide evidence supporting the view that focusing on building a resilient and robust financial system is of importance for the achievement of SDGs.

The purpose of this paper is to provide insights into recent financial analysis practice in the Chinese context. The paper aims to examine the approaches pursued and information used by Chinese financial analysts in investment appraisal of ordinary shares. The research seeks to explore influences upon analysts' decision making and how analysts perceived the Chinese investment environment.

A questionnaire based survey approach was used, conducted in 2003 with 65 Chinese financial analysts.

The findings indicate that fundamental analysis was the predominant technique adopted in appraising equities in line with the development of institutional investors and improved market efficiency. Regarding information used to analyse companies, annual reports constituted the most influential source. The Chinese analysts favoured usage of International Financial Reporting Standards (IFRSs) and International Accounting Standards (IASs) by A‐share companies. The findings indicate changes within the financial analyst community, suggesting pressure for higher quality analysis and increased use of more sophisticated techniques despite ongoing market shortcomings. Opinions vary as to how important financial analysis is in influencing stock valuation or, crucially, socio‐economic welfare. However, studies putting the analysts' role in perspective vis‐à‐vis other forces contribute to broadening understanding of this significantly under researched area. This current study contributes to filling this gap.

This paper provides insights into how specific country contexts influence financial analysts' investment appraisal practice in interims of incentives, information sources and techniques adopted.

Critics say cryptocurrencies are hard to predict and lack both economic value and accounting standards, while supporters argue they are revolutionary financial technology and a new asset class. This study aims to help accounting and financial modelers compare cryptocurrencies with other asset classes (such as gold, stocks and bond markets) and develop cryptocurrency forecast models.

Daily data from 12/31/2013 to 08/01/2020 (including the COVID-19 pandemic period) for the top six cryptocurrencies that constitute 80% of the market are used. Cryptocurrency price, return and volatility are forecasted using five traditional econometric techniques: pooled ordinary least squares (OLS) regression, fixed-effect model (FEM), random-effect model (REM), panel vector error correction model (VECM) and generalized autoregressive conditional heteroskedasticity (GARCH). Fama and French's five-factor analysis, a frequently used method to study stock returns, is conducted on cryptocurrency returns in a panel-data setting. Finally, an efficient frontier is produced with and without cryptocurrencies to see how adding cryptocurrencies to a portfolio makes a difference.

The seven findings in this analysis are summarized as follows: (1) VECM produces the best out-of-sample price forecast of cryptocurrency prices; (2) cryptocurrencies are unlike cash for accounting purposes as they are very volatile: the standard deviations of daily returns are several times larger than those of the other financial assets; (3) cryptocurrencies are not a substitute for gold as a safe-haven asset; (4) the five most significant determinants of cryptocurrency daily returns are emerging markets stock index, S&P 500 stock index, return on gold, volatility of daily returns and the volatility index (VIX); (5) their return volatility is persistent and can be forecasted using the GARCH model; (6) in a portfolio setting, cryptocurrencies exhibit negative alpha, high beta, similar to small and growth stocks and (7) a cryptocurrency portfolio offers more portfolio choices for investors and resembles a levered portfolio.

One of the tasks of the financial econometrics profession is building pro forma models that meet accounting standards and satisfy auditors. This paper undertook such activity by deploying traditional financial econometric methods and applying them to an emerging cryptocurrency asset class.

This paper attempts to contribute to the existing academic literature in three ways: Pro forma models for price forecasting: five established traditional econometric techniques (as opposed to novel methods) are deployed to forecast prices; Cryptocurrency as a group: instead of analyzing one currency at a time and running the risk of missing out on cross-sectional effects (as done by most other researchers), the top-six cryptocurrencies constitute 80% of the market, are analyzed together as a group using panel-data methods; Cryptocurrencies as financial assets in a portfolio: To understand the linkages between cryptocurrencies and traditional portfolio characteristics, an efficient frontier is produced with and without cryptocurrencies to see how adding cryptocurrencies to an investment portfolio makes a difference.

The purpose of this paper is to examine whether Chartered Accountants South Africa (CAs(SA)) as Chief Executive Officers (CEOs) have an association with accruals quality.

The theoretical base of this paper is the link between accounting expertise and accruals quality. The sample consists of 812 observations of Johannesburg Stock Exchange (JSE)-listed firms between 2010 and 2013. The association is tested by regressing the CA(SA) as CEO interest variable and control variables on accruals quality, using three metrics of abnormal accruals.

The overall results suggest that less accruals management and estimation error is present when the CEO is a CA(SA).

This is the first study to test the association between having a CEO with a professional accounting qualification, such as CA(SA), and accruals quality. The findings will be of interest to shareholders and top executives when evaluating the appointment of a CEO.