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Article
Publication date: 19 August 2020

Mahdi Moradi, Mahdi Salehi, Hossein Tarighi and Mahdi Saravani

Independent auditors play an important role in increasing the reliability of financial information by giving their professional opinion on the financial statements of…

Abstract

Purpose

Independent auditors play an important role in increasing the reliability of financial information by giving their professional opinion on the financial statements of business units. Therefore, the purpose of this study is to investigate the relationship between the audit adjustments and financing of companies.

Design/methodology/approach

The sample of the study includes 173 Iranian companies listed on the Tehran Stock Exchange (TSE) between 2010 and 2017.

Findings

There is no significant association between the profit incremental audit adjustments (Disagreement) and financing of companies in the current year and the following year through a loan. Furthermore, there is no meaningful relationship between the earnings downward/upward audit adjustments (Disagreement) and the financing of companies in the current year and the following year through ordinary stocks. However, there is a meaningful relationship between the profit downward audit adjustments (Disagreement) and the financing of firms in the current year through a loan. In general, as Iran's economy is facing severe economic sanctions, the existence of a high inflation rate has led to a steady increase in the stock prices of Iranian companies; hence, investors regardless of audit reports prefer to invest their money in the stock market so that it does not lose its purchasing power. Under these disaster economic circumstances, creditors are less willing to lend to companies with lower profits.

Originality/value

The results of the current study extend the knowledge of previous studies as financial pressures from economic sanctions have both positive and negative psychological effects on corporate financing.

Details

Journal of Accounting in Emerging Economies, vol. 10 no. 4
Type: Research Article
ISSN: 2042-1168

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Article
Publication date: 1 April 1990

J. Grahame Boocock

Over recent years an increasing amount of funds has been committed to mergers and acquisitions in the UK. Expenditure rose nearly tenfold from £2.3bn in 1983 to £22.1bn in…

Abstract

Over recent years an increasing amount of funds has been committed to mergers and acquisitions in the UK. Expenditure rose nearly tenfold from £2.3bn in 1983 to £22.1bn in 1988. This surge in spending has continued despite fears over economic trends, both domestic and international, and shocks in financial markets, notably the global col lapse in share values of October 1987. This monograph is essentially concerned with the events up to, and including, the first three quarters of 1989, ie, a period of two years after the crash of October 1987. Whilst the financing of mer gers and acquisitons activity is a fast moving arena, it does seem to be an opportune time to review developments to date and, tentatively, to suggest future trends in this sphere.

Details

Managerial Finance, vol. 16 no. 4
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 28 December 2018

Shujing Li and Nan Gao

The purpose of this paper is to explore the influence of the rise in housing prices on enterprise financing and also the sustainability and heterogeneity of this effect.

Abstract

Purpose

The purpose of this paper is to explore the influence of the rise in housing prices on enterprise financing and also the sustainability and heterogeneity of this effect.

Design/methodology/approach

Empirical test, panel data, fixed-effect model, IV and 2SLS were used in this paper.

Findings

The empirical results indicate that the mortgage effect does exist, and the authors further analyze the heterogeneity of this effect by dividing the sample based on the degree of financial development and property rights; the empirical results reveal that the mortgage effect is significantly higher in places with the high level of financial development. Besides, compared to the SOE enterprise, the mortgage effect has more influence on non-SOE companies.

Research limitations/implications

The results indicate that the mortgage effect should be considered when regulating housing market, and in order to improve the financing capability of company, its profitability and financial market efficiency should be emphasized.

Originality/value

This paper not only confirms the existence of the mortgage effect, but also explores its sustainability and heterogeneity, which reveals the risk and bubble in the effect of house market on enterprise financing, and enlightens how to promote financing ability of company.

Details

China Finance Review International, vol. 9 no. 1
Type: Research Article
ISSN: 2044-1398

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Article
Publication date: 1 February 1993

Richard Dobbins

Sees the objective of teaching financial management to be to helpmanagers and potential managers to make sensible investment andfinancing decisions. Acknowledges that…

Abstract

Sees the objective of teaching financial management to be to help managers and potential managers to make sensible investment and financing decisions. Acknowledges that financial theory teaches that investment and financing decisions should be based on cash flow and risk. Provides information on payback period; return on capital employed, earnings per share effect, working capital, profit planning, standard costing, financial statement planning and ratio analysis. Seeks to combine the practical rules of thumb of the traditionalists with the ideas of the financial theorists to form a balanced approach to practical financial management for MBA students, financial managers and undergraduates.

Details

Management Decision, vol. 31 no. 2
Type: Research Article
ISSN: 0025-1747

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Book part
Publication date: 1 December 2004

Fazilah Abdul Samad

This study outlines some major findings of the impact of ownership concentration on corporate performance, investment and financing decisions in the Malaysian corporate…

Abstract

This study outlines some major findings of the impact of ownership concentration on corporate performance, investment and financing decisions in the Malaysian corporate sector. Earlier studies on corporate governance linked very concentrated ownership structure to weak corporate governance, thus leading firms to make poor investment and financing decisions. However, a firm that strives towards maximising shareholder’s wealth would select its investment and financing strategy with care. Thus concentrated ownership has also been found to lead to better corporate performance, and that composition of ownership is an important element to spur better corporate performance.

Details

Corporate Governance
Type: Book
ISBN: 978-0-76231-133-0

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Book part
Publication date: 20 May 2019

H. Kiaee and M. Soleimani

In literature, a vast number of researches have tried to analyse the interaction between different financing methods and corporate governance. Some believe that good…

Abstract

In literature, a vast number of researches have tried to analyse the interaction between different financing methods and corporate governance. Some believe that good corporate governance companies are more successful in equity financing whereas others believe in positive relationship between corporate governance and debt finance. In this chapter, the authors analyse the interaction between sukuk financing and corporate governance. The authors first tried to differentiate between the financer and company's point of view in the financing decisions of different corporate governance quality companies, and then showed that, theoretically, there should be a positive relationship between murabahah sukuk and ijarah sukuk issuance and the corporate governance quality of companies in both types of views. The corporate governance characteristics of sukuk issuing companies in Iran are also analysed. The results from model estimation confirmed theoretical conclusion and corporate governance variables had positive and significant effects on the Sukuk issuance among Iranian Sukuk issuer companies.

Details

Research in Corporate and Shari’ah Governance in the Muslim World: Theory and Practice
Type: Book
ISBN: 978-1-78973-007-4

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Article
Publication date: 13 November 2018

Christina Chiang and Paul Wells

The theory of economic regulation is used to ascertain how and why the failure of regulatory governance in New Zealand contributed to investor losses of $8.5bn following…

Abstract

Purpose

The theory of economic regulation is used to ascertain how and why the failure of regulatory governance in New Zealand contributed to investor losses of $8.5bn following the collapse of more than 60 public finance companies since 2006.

Design/methodology/approach

Relevant documents in the public domain, including government documents, government agency reports, newspaper articles, business journals, academic journals and trade publications were examined to gather evidence for this study.

Findings

This study found that the regulatory and supervisory framework failed to provide the trustee companies with the necessary enforcement powers and/or responsibilities and ensure effective auditor performance.

Practical implications

The findings suggest that, segmenting the market with different regulations for each market segment may discourage competition and may protect private interests rather than the public interest. It was also found that the control mechanisms for monitoring auditor performance are detective rather than preventive in nature which means investor losses from poor auditor performance can only be mitigated and not prevented.

Originality/value

This study analyses the contributing factors to the investor losses.

Details

Pacific Accounting Review, vol. 30 no. 4
Type: Research Article
ISSN: 0114-0582

Keywords

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Article
Publication date: 1 August 2016

Humayun Kabir, Li Su and Asheq Rahman

The setting of private finance companies that failed in New Zealand during 2006-2012 was characterized by weaker corporate governance and enforcement of securities law…

Abstract

Purpose

The setting of private finance companies that failed in New Zealand during 2006-2012 was characterized by weaker corporate governance and enforcement of securities law. This paper aims to explore audit failure in this setting and examine whether auditors erred in their audits of the failed finance companies and whether the audit failure rate of Big N auditors was different from that of non-Big N auditors.

Design/methodology/approach

This paper adopts the archival research method and uses three sets of evidence to assess audit failure – the frequency of going concern opinion (GCO) prior to failure, misstatements in the last audited financial statements, and the violation of the Code of Ethics.

Findings

The study finds that only 41 per cent of the sample companies received the GCO in their last audit prior to failure and provides evidence of material misstatements in the financial statements of a number of failed finance companies that received clean audit opinions prior to failure and breaches of the Code of Ethics by a number of auditors. These results strongly indicate audit failure for a number of failed finance companies. The audit failure rate, however, appears less for Big N auditors than for non-Big N auditors.

Practical implications

The study draws attention of the stock market regulator and the accounting profession to an area, the audit of private finance companies, that needs better quality audits.

Originality/value

This paper provides systematic evidence of audit failure in failed finance companies in New Zealand. It also furnishes preliminary evidence of Big N auditors compensating for weaker corporate governance.

Details

Pacific Accounting Review, vol. 28 no. 3
Type: Research Article
ISSN: 0114-0582

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Article
Publication date: 13 January 2021

Xiongfeng Pan, Shucen Guo and Junhui Chu

The purpose of this paper is to explore the impact of peer-to-peer (P2P) supply chain financing on companies' innovation efficiency.

Abstract

Purpose

The purpose of this paper is to explore the impact of peer-to-peer (P2P) supply chain financing on companies' innovation efficiency.

Design/methodology/approach

This study takes the core companies that invest in the P2P platform as the research background and uses data for Chinese companies and the systematic Generalised Method of Moments (the systematic GMM) to explore the relationship between the improvement of supply chain efficiency, research and development (R&D) investment, and innovation efficiency.

Findings

This study indicates that core enterprise investment in P2P can cause a significant improvement in the efficiency of the supply chain and that this improvement can significantly motivate enterprises to increase R&D investment. Although the improvement of supply chain efficiency has no significant effect on improving companies' innovation efficiency, it can have a positive impact on innovation efficiency through the regulating role of R&D investment.

Research limitations/implications

This research shows several limitations such as single industry and few companies involved, but it analyses the impact of P2P supply chain financing on R&D investment, and companies' innovation efficiency and broadens the research field of P2P supply chain financing.

Practical implications

This article provides a theoretical direction for listed companies to invest in P2P platforms and achieve supply chain management. The research on the regulating role of this article provides a new way of thinking for the study of enterprise innovation.

Originality/value

This paper analyses the impact of the core enterprise investment in P2P on R&D investment and its subsequent impact on the companies' innovation efficiency, thus broadening the research field of P2P supply chain financing.

Details

Journal of Enterprise Information Management, vol. 34 no. 1
Type: Research Article
ISSN: 1741-0398

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Article
Publication date: 26 October 2020

Firano Zakaria and Doughmi Salawa

There is a wealth of literature on the financing structure of a company. For this reason, the authors considered it useful to present a theoretical and empirical…

Abstract

Purpose

There is a wealth of literature on the financing structure of a company. For this reason, the authors considered it useful to present a theoretical and empirical literature review of classical and new theories of the financial structure. The purpose of this study is to realize on a panel of 15 nonfinancial Moroccan companies listed on the Casablanca Stock Exchange, over a period of 11 years.

Design/methodology/approach

The results obtained indicate that only a few variables from financial theory have an important role in the financing policy of Moroccan companies. The authors have presented the positive role of size and self-financing on the debt ratio. The analysis of the effects of profitability shows in this study that it is negative related on the debt ratio which asserts the predictions of the pecking order theory. Also, the age of the company and the growth opportunities explain the level of indebtedness.

Findings

Econometric analysis is used to ascertain the nature of the financial structure of listed companies. For this purpose, a large number of companies listed on the Casablanca stock exchange were used.

Originality/value

The authors have presented the positive role of size and self-financing on the debt ratio. Regarding the influence of profitability, this analysis shows that it is negative related on the debt ratio which asserts the predictions of the pecking order theory. Also, the age of the company and the growth opportunities explain the level of indebtedness.

Details

Journal of Modelling in Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-5664

Keywords

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