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Firms in different countries operate in different business environments and prepare financial statements following, by necessity, their own countries' accounting standards. Benchmarks for assessing financial ratios of firms in different countries are likely to be different. In conducting financial ratio analyses, each country's unique cultural, business, financial, and regulatory characteristics have to be taken into consideration, for these external factors may exert significant effects on measurements of financial data. This study aims to investigate challenges in comparing financial ratios between Japanese firms and Chinese firms.

This study compares ten major financial ratios of 75 Chinese firms with financial ratios of 75 matched sample Japanese firms to determine if a common benchmark for each of the financial ratios can be applied to firms in both countries.

The results show significant differences in liquidity, solvency, and activity ratios between firms from these two countries. Further examination of differences in accounting standards, economic, and institutional environments between these two countries suggests that these external factors have significant effects on financial ratios and may have contributed to the observed differences.

This study is among the first to investigate the comparability of ratios between Japanese firms and Chinese firms to uncover potential challenges and warn investors of such challenges.

The purpose of this paper is to explore how networks of boards of directors affect relative performance evaluation (RPE) in chief executive officer (CEO) compensation.

In this study, the authors propose that an interlocking network is an important inter-corporate setting, which has a bearing on whether boards decide to use RPE in CEO compensation. They adopt four typical graph measures to depict the centrality/position of each board in the interlock network: degree, betweenness, eigenvector and closeness, and study their impacts on RPE use.

The authors find that firms that have more connected board members and whose board members are connected to better connected firms are more likely to reward their CEOs contingent on their peers’ performance, indicating that information transmission along the board interlock network facilitates the adoption of RPE. This result is robust to alternative measures for board interlock networks and various types of CEO compensation. It highlights the role of interlocking directorates in disseminating information and practice of RPE use along board network.

The authors use social network analysis to measure the relationships and flows between the connected nodes and study the impact on executive compensation design.

This study aims to examine the effects of balanced scorecard (BSC) usage on performances in the context of four contingent variables in Singaporean manufacturing firms. The results show that firms are more likely to adopt BSC if they are large in size, have products at an early product lifecycle (PLC) stage, operate in highly uncertain environments or adopt differentiation strategies. However, the adoption of BSC improves performance only in firms that are large or have products at an early PLC stage. The results suggest that contingent factors in which a firm operates can exert significant effects on the results of adopting BSC.

Survey data are collected, then the authors check data correlations, principle components analysis, run regression analysis and ANOVA.

BSC use is positively and significantly correlated with PLC stage, external environment and performance. Size and strategy are positively correlated with BSC usage, but are not statistically significant. Higher BSC use is found in large firms with products at an early PLC stage or operating in a highly uncertain environment. Companies with a cost leadership strategy are significantly associated with BSC use.

This study has small sample size and uses survey research method. The measurements to capture all aspects of BSC usage are non-exhausting. Future research can use different methodologies, such as field studies, case studies and lab experiments, to examine other industries than manufacturing.

The authors results show the positive association between BSC use and certain firm characteristics. Firms with those characteristics should get insights about the benefit of using BSC and extract the maximum benefit from their investment on the BSC use and those firms which don’t have BSC in implication may think of implementing the BSC use.

Firms’ contingent factors affect the value of adopting BSC. With the authors research result, firms will be aware of how to extract the most value out of BSC and improve the social wealth of the manufacturing industries.

The authors paper is the first paper to use survey method to examine the association between BSC and firms’ contingent factors in the Singaporean manufacturing firms setting.

The purpose of this study is to propose to use the economic value added to measure firm performance against information security investments.

The authors develop a conceptual framework to capture non information technology (IT)-related and IT-related security investment factors and propose to study their holistic influences on firm performance.

The authors propose 14 propositions to understand the relationship between security investments and firm performance.

The authors propose a validation process to guide future research to further empirically capture all needed data and analyze the proposed relationships.

Managers can view security investment from a more comprehensive perspective and understand how to potentially contribute each of the non IT-related and IT-related factors to firm performance.

This is one of the early attempts studying information security investment vs firm performance from a comprehensive conceptual angel.

The purpose of this paper is to examine the impact of female board membership on the profitability of corporate insider purchases.

The authors use a classic event study approach. They measure abnormal returns around the insider purchase events, and analyze the cross-sectional variation of this market impact in terms of female board membership, controlling for a range of other factors.

The authors find a strong positive market reaction in the aggregated data, and after decomposing transactions according to gender, they find that the profitability of female directors is statistically indistinguishable from their male counterparts. Additionally, they find evidence that with more females sitting on the board, the profitability of the male directors decreases but the profitability of their female counterparts does not.

The authors’ findings suggest that having females on the board increases corporate governance of male directors. The results also suggest that female directors are no less inclined to exploit the asymmetric information advantage provided by board membership.

The purpose of this paper is to re-examine the presence of rational speculative bubbles in the Malaysian stock market in light of contradictory results presented in previous studies.

The authors use descriptive statistics, explosiveness tests and the duration dependence test. They use an expanded data set that encompasses at least two alleged bubble episodes addressing a significant limitation of previous studies. The authors use both monthly and weekly returns addressing concerns about the sensitivity of duration dependence test results to the use of monthly versus weekly returns, as well as a battery of alternative measures of returns.

The authors detect bubble footprints but they do not appear to be rational. They found no evidence of rational speculative bubbles over the sample period regardless of whether monthly or weekly returns was used. The authors suggest that if there were bubbles in the Malaysian stock market, they might have been caused by irrational investor behaviour. The authors’ results do not support the suggestion that the duration dependence test is sensitive to the use of monthly versus weekly returns.

Despite the absence of rational bubbles in the Malaysian stock market, the faint bubble footprints detected still suggest caution for investors, as the authors cannot categorically rule out the presence of irrational bubbles.

This paper clarifies conflicting results of previous studies. It also contributes to the literature on bubble testing by presenting new evidence from an emerging market refuting the claim that duration dependence test results are sensitive to the use of either weekly or monthly returns.

This paper aims to provide an update to the risk management literature, as it compiles a survey of 65 recent theoretical and empirical studies on the topic.

This is a survey paper that summarizes recent theoretical and empirical research regarding the relationship between risk management and firm value.

Recent empirical evidence provides support for theoretical propositions in the literature that risk management increases firm value and returns, while reducing return and cash flow volatility. The results are largely consistent with early findings, and there have been significant empirical advances that address concerns regarding the endogeneity of risk management practices relative to corporate financial decisions. The literature has become broader and deeper, as there are now studies with larger sample sizes across more industries and geographic areas.

Firms that use sound risk management practices obtain higher valuations, achieve better financial performance and experience diminished costs of financial distress. Recent research has emerged regarding enterprise risk management and its potential for value creation and risk reduction.

The paper provides a new compilation and synthesis of recent theoretical and empirical research in risk management that addresses many of the limitations of prior research.

The purpose of this paper is to examine whether audit quality influence real earnings management activities using a sample of UK listed firms that have strong incentives to manage earnings upward through meeting past year’s earnings as a benchmark in the post-adoption period of International Financial Reporting Standards (IFRS).

The authors use a sample of 4,774 firm-year observations of UK listed firms during the period 2005–2018. Univariate and multivariate analyses have been conducted to test the association after controlling for firm characteristics and institutional variables.

The study reports that the presence of Big 4 auditors is significantly and positively related with greater levels of sales and discretionary expenses manipulation. Though the authors do not find any conclusive evidence on production costs manipulation, the aggregated measure of real earnings management shows a significant positive association with the presence of Big 4 auditors.

The study implies that managers who have incentives to manage earnings upward around the UK firms take advantage of the accounting flexibility in defining policies while reducing information asymmetry among the investors to signal better future performance. The approach to detect earnings manipulation as described in the auditing standards fails to limit the managerial use of real activities due to limited scope and unclear guidance. Thus, due to the significant impact on public policies, the results should, therefore, be of interest to the regulators and standard setters.

To the best of the authors’ knowledge, this is the first study that examines the association between audit quality and real earnings management for the UK all-purpose operational firms in sampled data that just meet past year’s earnings as a benchmark in the post-IFRS period.