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1 – 10 of 268John E. Timmerman, Al S. Lovvorn, Michael M. Barth and R. Franklin Morris
Dean Lynn, of Augustine State University's School of Business Administration, has been asked to develop online offerings as a prototype for the rest of the university. The…
Abstract
Dean Lynn, of Augustine State University's School of Business Administration, has been asked to develop online offerings as a prototype for the rest of the university. The decision he faced was whether to (A) take on the project alone or (B) make a ten-year commitment to a specialized vendor. If option B was selected, the further choice was whether to allow the vendor to handle everything short of instruction with a customized program or to handle only the marketing elements of the task. In the course of considering what to do, Dean Lynn was faced with the financial as well as the qualitative dimensions of the choice. The purpose of this case is to provide students a vehicle to explore the myriad considerations inherent in every organization's decision making process… qualitative as well as quantitative.
Helen Bishop, Michael Bradbury and Tony van Zijl
We assess the impact of NZ IAS 32 on the financial reporting of convertible financial instruments by retrospective application of the standard to a sample of New Zealand companies…
Abstract
We assess the impact of NZ IAS 32 on the financial reporting of convertible financial instruments by retrospective application of the standard to a sample of New Zealand companies over the period 1988 ‐ 2003. NZ IAS 32 has a broader definition of liabilities than does the corresponding current standard (FRS‐31) and it does not permit convertibles to be reported under headings that are intermediate to debt and equity. The results of the study indicate that in comparison with the reported financial position and performance, the reporting of convertibles in accordance with NZ IAS 32 would result in higher amounts for liabilities and higher interest. Thus, analysts using financial statement information to assess risk of financial distress will need to revise the critical values of commonly used measures of risk and performance when companies report under NZ IAS
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Torsten Schlesinger, Michael Barth, Matti Bartsch and Werner Pitsch
The comparatively high salaries of professional players during their active athletic career should allow them to accumulate an adequate level of precautionary savings for a…
Abstract
Purpose
The comparatively high salaries of professional players during their active athletic career should allow them to accumulate an adequate level of precautionary savings for a financially autonomous post-sport career. However, not all players succeed in accumulating sustainable financial assets. Therefore, the question arises how professional players' financial precaution within the social setting football is shaped. As no empirical analyses have yet been carried out on this issue, the study study examines football players' precautionary practices and motives.
Design/methodology/approach
Semi-structured interviews were conducted with 25 German (former) professional football players. The authors used qualitative content analysis to analyse the data, expanding the analysis to include reconstructive elements to create different precautionary types.
Findings
The results reveal that players deal with both career-specific as well as precaution-related risks quite heterogeneously. Accordingly, three precautionary types characterised by distinct forms of precautionary saving practices are identified. The authors also find that although the players are aware of the uncertainties and risks related to their professional football careers, it does not say much about the concrete implementation of adequate precautionary practices.
Practical implications
The findings contribute to a better understanding of precautionary saving practices among football players.
Social implications
Moreover, the findings contribute to a better understanding of precautionary saving practices not only specifically among (former) football players, but generally among individuals that face high occupational career risks and earn high salaries to develop preventative concepts and approaches to sustainable financial planning.
Originality/value
This paper is the first empirical study that analyses precautionary savings practices of the specific population of elite athletes in high income sports professional football.
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Michael Cipriano, Elizabeth T. Cole and John Briggs
Studies show firms reporting using Generally Accepted Accounting Principles in the United States (US GAAP) and International Financial Reporting Standards (IFRS) are similarly…
Abstract
Purpose
Studies show firms reporting using Generally Accepted Accounting Principles in the United States (US GAAP) and International Financial Reporting Standards (IFRS) are similarly valued in the market, however, these studies are limited due to the noise present in international studies from regulatory differences. This study aims to eliminate much of this noise by using a cleaner sample of all listings with the Securities Exchange Commission (SEC). This paper also looks at more detailed book value figures.
Design/methodology/approach
There have been previous studies on the differences in market valuation of firms reporting using IFRS vs US GAAP. Most of this research is confounded with difficulties due to different regulatory environments and volatile time periods. The study uses cleaner data following the SEC’s acceptance of IFRS financials without a 20-F Reconciliation. The authors use a large sample of non-US firms trading on US exchanges choosing to use either US GAAP or IFRS for SEC reporting purposes. The sample period starts two years after the SEC’s acceptance of IFRS financials without a 20-F reconciliation and is larger than earlier samples.
Findings
The authors show that there is no difference between IFRS and US GAAP firms’ overall value relevance, however, earnings are more value relevant when measured using IFRS and book value is more value relevant when measured using US GAAP. The authors find that the difference between US GAAP and IFRS can be explained, at least in part, by greater market multiples being placed on inventories and goodwill using US GAAP. This is offset in part by greater multiples being placed on other assets under IFRS.
Originality/value
The authors replicate earlier studies but also extend with a better sample and more detailed finings.
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Michael T. Dugan, Elizabeth H. Turner and Clark M. Wheatley
This paper aims to examine the association of accruals and disaggregated pension components with future cash flows and also to investigate whether investors distinguish between…
Abstract
Purpose
This paper aims to examine the association of accruals and disaggregated pension components with future cash flows and also to investigate whether investors distinguish between pension information that is recognized (SFAS 158) versus disclosed (SFAS 132).
Design/methodology/approach
Regression analysis is used with a proxy for expected future cash flows as the dependent variable, and the components of pension disclosures as well as controls for the 2008-2009 financial crisis as the independent variables.
Findings
The results reveal that incorporating disaggregated pension components increases the ability to predict future cash flows, and that investors attach different pricing multiples to the various components in the models. The authors also find that during the 2008-2009 financial crisis, the signs of the coefficients on these components changed. Finally, the results indicate that investors assign more significance to pension accounting information that is recognized, as opposed to disclosed, and that disclosure affects the allocation of pension assets.
Originality/value
The authors provide empirical support for the conjecture posited by Amir and Benartzi (1998) that the prediction of future cash flows will be enhanced by the incorporation of the components of pension assets and liabilities. Importantly from a standard setting perspective, the authors also find evidence that investors assign more significance to pension accounting information that is recognized in the financial statements than to pension information that is disclosed.
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Michael Grassmann, Stephan Fuhrmann and Thomas W. Guenther
Credibility concerns regarding integrated reports can harm the intended decrease of information asymmetry between a firm and its investors. Therefore, it is crucial to examine…
Abstract
Purpose
Credibility concerns regarding integrated reports can harm the intended decrease of information asymmetry between a firm and its investors. Therefore, it is crucial to examine whether voluntary third-party assurance enhances the credibility of integrated reports and, thus, decreases information asymmetry. Furthermore, this study aims to investigate the interaction effect between assurance quality and the disclosed connectivity of the capitals, a distinguishing feature of integrated reports.
Design/methodology/approach
Content analysis is performed of the 176 assurance statements included in the 269 integrated reports of Forbes Global 2000 firms disclosed from 2013 to 2015 and the 269 integrated reports themselves. Regression analyzes are applied to examine the associations between assurance, the disclosed connectivity of the capitals and information asymmetry.
Findings
The presence of an assurance statement in an integrated report significantly decreases information asymmetry. Surprisingly, assurance quality is not significantly associated with information asymmetry. However, an interaction analysis reveals that combining high assurance quality with high disclosed connectivity of the capitals allows a significant decrease in information asymmetry.
Research limitations/implications
The paper demonstrates that the connectivity of the capitals of integrated reports and assurance quality are connected and together are associated with information asymmetry.
Practical implications
The results imply, both for report preparers and standard setters, that assurance quality is advantageous only when combined with disclosed connectivity of the capitals.
Social implications
More information on non-financial information measured by the connectivity of the capitals of integrated reporting has an interaction effect together with assurance quality on information asymmetry.
Originality/value
This paper builds on a unique data set derived from the contents of integrated reports and accompanying assurance statements. Furthermore, it extends the integrated reporting literature by investigating the interaction between assurance quality and the disclosed connectivity of the capitals, which had not previously been examined in combination.
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James R. Barth, Daniel E. Nolle and Tara N. Rice
The purpose of this paper is to compare and contrast the structure, regulation, and performance of banks in the EU and G‐10 countries. This enables one to identify any significant…
Abstract
The purpose of this paper is to compare and contrast the structure, regulation, and performance of banks in the EU and G‐10 countries. This enables one to identify any significant differences in the structure of banking in the nineteen separate countries comprising these two groups. The regulatory, supervisory, and deposit‐insurance environment in which banks operate in each of these countries is also compared and contrasted. This enables one to identify any significant differences in the regulatory environment that may help explain the structure of banking in the various countries. Beyond this, the effect of the overall structural and regulatory environment on individual bank performance is investigated in order to evaluate the appropriateness of existing regulations in individual countries and any proposals for reforming them. Hence, an exploratory empirical analysis based upon a sample of banks in the different countries is conducted to assess the effect of the different “regulatory regimes” on the performance of individual banks, controlling for various bank‐specific and country‐specific factors that may also affect bank performance. In this way, the paper attempts to contribute to an assessment of the appropriate balance between market and regulatory discipline to ensure that banks have sufficient opportunities to compete prudently and profitability in a competitive and global financial marketplace. In the process of conducting such an assessment, the paper necessarily provides information as to whether the U.S. is “out‐of‐step” with banking developments in other industrial countries.
Felipe Zúñiga, Roxana Pincheira, Julie Walker and Michael Turner
The purpose of this study is to examine the effect of integrated reporting (IR) quality on both market liquidity and analyst forecast accuracy in South Africa as the only country…
Abstract
Purpose
The purpose of this study is to examine the effect of integrated reporting (IR) quality on both market liquidity and analyst forecast accuracy in South Africa as the only country in the world having IR as a listing requirement. This study uses the Sustainability Disclosure Transparency Index (SDTI) as a proxy for IR disclosure quality. The analysis of this study is based on the period after the publication of the international framework and its adoption by the International Reporting Committee of South Africa in 2014.
Design/methodology/approach
The companies sampled in this study are those listed on the Johannesburg Stock Exchange (JSE) from 2013 to 2015. The major factor driving the selection of this particular period was to not only analyse the existing IR practice but also investigate IR two years after King III came into force. The SDTI developed by Integrated Reporting and Assurance Services (IRAS) was used to analyse IR quality. Ordinary least squares regressions were analysed. The models include year and industry fixed effects. The variance inflation factor and its tolerance were used to test the severity of multi-collinearity. Also, alternative measures of IR quality and alternate model specifications were analysed to check the robustness of the results.
Findings
The authors find that quality of IR is associated with lower earnings forecast error. The evidence indicates that earnings forecast error is lower for firms in the materials sector of the South African economy. Consistent with prior research, the results also suggest that forecast errors are higher for companies with volatile returns and lower for larger firms. Additional analysis indicates that IR quality is positively associated with market liquidity. Overall, these findings support the virtues of IR, thus providing useful information to capital markets.
Research limitations/implications
The results obtained cannot be generalised to other jurisdictions. While the South African economy is the best setting to investigate IRs, new economies are also working actively on IR disclosures, so future research is likely to extend the literature in this field. Secondly, the availability of data constrained the sample size; however, this only mediates against finding any statistically significant result. While the IRAS database offers information about 324 JSE companies, Datastream covers only the 170 largest South African firms. In spite of the sample reduction, robust and consistent results are found in the market liquidity and analyst forecast accuracy proxies.
Practical implications
The sample period of this study (2013-2015) allows to understand disclosure behaviour after the international IR framework was published and endorsed by the JSE. The release of the IIRF gave clear guidance to firms regarding the nature and purpose of IR. Overall, the results obtained in this paper are consistent with IR expectations, thus providing useful information for investors and financial analysts. It is expected that the results might have practical implications for other nations about the cost and benefits of implementing integrated management reporting.
Originality/value
This paper contributes incrementally to the existing debate about whether disclosure information through IR has real benefits or is a passing fad. It examines the economic consequences of IR in a mandatory setting using an in-house ranking system, adapted to South Africa, designed by IRAS to determine IR quality. IRAS provides an SDTI that assesses the accuracy, consistency, completeness and reliability of quantitative data for 84 indicators based on IR and global reporting initiative aspects and subdivided into seven categories.
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Terence Hogarth and Michael C. Barth
Charts the success of an experiment by B&Q, thelarge DIY chainstore, in opening a store, staffedentirely by older workers. The subsequentsuccess of this proactive response to the…
Abstract
Charts the success of an experiment by B&Q, the large DIY chainstore, in opening a store, staffed entirely by older workers. The subsequent success of this proactive response to the changing demographic structure has proved to managers and public alike, that older workers are a valuable part of the UK labour market.
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