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1 – 10 of 14Khouloud Ben Ltaief and Hanen Moalla
The purpose of this study is twofold. On the one hand, it studies the impact of IFRS 9 adoption on the firm value; and on the other hand, it investigates the impact of the…
Abstract
Purpose
The purpose of this study is twofold. On the one hand, it studies the impact of IFRS 9 adoption on the firm value; and on the other hand, it investigates the impact of the classification of financial assets on the firm value.
Design/methodology/approach
The study covers a sample of 55 listed banks in the Middle Eastern and North African (MENA) region. Data is collected for three years (2017–2019).
Findings
The findings show that banks’ value is not impacted by IFRS 9 adoption but by financial assets’ classification. Firm value is positively affected by fair value through other comprehensive income assets, while it is negatively affected by amortized cost and fair value through profit or loss assets. The results of the additional analysis show consistent outcomes.
Practical implications
This research reveals important managerial implications. Priority should be given to the financial assets’ classification strategy following the adoption of IFRS 9 to boost the market valuation of banks. It may be useful for investors, managers and regulators in their decision-making.
Originality/value
This study enriches previous research as IFRS 9 is a new standard, and its adoption consequences need to be investigated. A few recent studies have focused on IFRS 9 as a whole or on other parts of IFRS 9, namely, the impairment regime and hedge accounting and concern developed contexts. However, this research adds to the knowledge of capital market studies by investigating the application of IFRS 9 in terms of classification in the MENA region.
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Savannah (Yuanyuan) Guo, Beilei Mei, Yanchao Rao and Jianfang Ye
This study investigates the implementation challenges and economic consequences of the International Financial Reporting Standards 9 (IFRS 9) Financial Instruments.
Abstract
Purpose
This study investigates the implementation challenges and economic consequences of the International Financial Reporting Standards 9 (IFRS 9) Financial Instruments.
Design/methodology/approach
Descriptive evidence on equity asset reclassifications and estimated impairment using the new expected credit loss (ECL) model are presented. Multivariate analyses on the disposal of available-for-sale (AFS) and fund investment post-announcement and the value relevance of impairments to financial assets post-implementation are performed.
Findings
Over 60% of sample firms report inconsistent equity asset reclassifications and do not change estimated impairment using the new expected credit loss model. Firms also switch from AFS to equity fund investments post-announcement. Lastly, impairments to financial assets increase in value relevance to investors’ post-implementation, but only in financial institutions and firms with Big 4 auditors.
Originality/value
This study's findings suggest that IFRS 9 presents implementation challenges and changes equity investment strategies. They also indicate cross-sectional differences in firms' ability to effectively apply the new standards. This study is valuable for policymakers, business leaders, investors and academics.
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Ajid ur Rehman, Asad Yaqub, Tanveer Ahsan and Zia-ur-Rehman Rao
This study aims to investigate earnings management practice of classification shifting of revenues in Chinese-listed firms.
Abstract
Purpose
This study aims to investigate earnings management practice of classification shifting of revenues in Chinese-listed firms.
Design/methodology/approach
The study employs a dataset of 2,920 A-listed firms from Chinese stock exchanges of Shanghai and Shenzhen for the period of 2003–2019. We apply both univariate and panel regression analysis by using fixed effect estimation with robust standard errors.
Findings
Our findings reveal that firms misclassify revenues by taking advantage of the flexibility provided by applicable financial reporting standards. The empirical evidence obtained through regression analysis suggest that managers reclassify non-operating revenues as operating revenue to alter the economic reality while seeking the advantage of financial reports users’ vulnerability for valuing the upper half of income statement items more as compared to lower part. The results further indicate that international financial reporting standards adoption inhibits the earnings management practices using classification shifting of revenues. It is also concluded that firms, which are suffering losses or having low growth, are more persistently involved in misclassification of revenues.
Originality/value
The study is unique from the point of view that it investigates earnings management from the prospective of revenue’s classification in an emerging market characterized by various market imperfections such as lower investor protection and higher information asymmetry.
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Yanan He, Xindong Zhang, Panpan Hao, Xiaoyong Dai and Haiyan Xue
This paper investigates whether China's R&D tax deduction policy triggers firms to manipulate their R&D expenditures upward.
Abstract
Purpose
This paper investigates whether China's R&D tax deduction policy triggers firms to manipulate their R&D expenditures upward.
Design/methodology/approach
This paper employs the ratio of actual tax savings as a proxy for the benefits of the R&D tax deduction policy based on manually collected and systematically cross-checked data. The relationship between tax benefits and abnormal R&D spending is estimated in a sample of Chinese A-share listed companies for the period 2007–2018.
Findings
The findings suggest that tax deductions lead to positive abnormal R&D spending and that this deviation in R&D spending may be attributed to firms' upward R&D manipulation for tax avoidance. The results also indicate that this behavior is more significant for the period after the policy revision, in non-HNTEs (high and new technology enterprises), and in firms with a high ratio of R&D expenses.
Research limitations/implications
It is difficult to establish a sophisticated and unified model to identify the specific strategy of upward R&D manipulation that firms use to obtain tax benefits.
Practical implications
Managers should take into account upward R&D manipulation when designing governance mechanisms. Policymakers in developing countries may further pursue preferential tax policies that cover every stage of innovation activities gradually; the local provincial governments need to leverage their proximity and flexibility advantages to develop a tax collection and administration system.
Originality/value
This study contributes to the understanding of the complex effect of R&D tax incentives and helps more fully illuminate firms' upward R&D manipulation behavior from the perspective of tax planning strategies, which are underexplored in previous research.
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Șerban Filipon and Violeta Simionescu
Competency frameworks can support public procurement capacity development and performance. However, literature on connecting professionalisation with national procurement contexts…
Abstract
Purpose
Competency frameworks can support public procurement capacity development and performance. However, literature on connecting professionalisation with national procurement contexts is limited. This paper aims to explain and conceptualise recent Romanian experience with developing bespoke competency frameworks at national level for public procurement that reflect the features of the Romanian public procurement system. The approach used could guide in broad-brush, mutatis mutandis, other (national) public procurement systems with comparable features, mainly those seeking a shift from a rather administrative function of public procurement towards a strategic function.
Design/methodology/approach
This case study reflects on the methodology used for analysing the Romanian public procurement environment in EU context to develop bespoke professionalisation instruments, and on ways to integrate competency management approaches in Romanian public procurement culture. That methodological mix has been mainly qualitative and constructionist, within an applied research approach. It combined desk research with empirical research and included legal research in this context.
Findings
A principled, methodological and pragmatic approach tailored to the procurement environment in question is essential for developing competency frameworks capable to resonate to and address the specific practical needs of that procurement system.
Social implications
Competency frameworks can uphold societal objectives through public procurement.
Originality/value
Using valuable insights into the development of the Romanian public procurement competency frameworks, the paper provides a conceptual framework for instilling competency management approaches to public procurement professional development where the latter is governed by a rather distinct, public administration, paradigm. This conceptual framework can guide other public procurement systems and stimulate further research.
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Abebe Hambe Talema and Wubshet Berhanu Nigusie
The purpose of this study is to analyze the horizontal expansion of Burayu Town between 1990 and 2020. The study typically acts as a baseline for integrated spatial planning in…
Abstract
Purpose
The purpose of this study is to analyze the horizontal expansion of Burayu Town between 1990 and 2020. The study typically acts as a baseline for integrated spatial planning in small- and medium-sized towns, which will help to plan sustainable utilization of land.
Design/methodology/approach
Landsat5-TM, Landsat7 ETM+, Landsat5 TM and Landsat8 OLI were used in the study, along with other auxiliary data. The LULC map classifications were generated using the Random Forest Package from the Comprehensive R Archive Network. Post-classification, spatial metrics, and per capita land consumption rate were used to understand the manner and rate of expansion of Burayu Town. Focus group discussions and key informant interviews were also used to validate land use classes through triangulation.
Findings
The study found that the built-up area was the most dynamic LULC category (85.1%) as it increased by over 4,000 ha between 1990 and 2020. Furthermore, population increase did not result in density increase as per capita land consumption increased from 0.024 to 0.040 during the same period.
Research limitations/implications
As a result of financial limitations, there were no high-resolution satellite images available, making it challenging to pinpoint the truth as it is on the ground. Including senior citizens in the study region allowed this study to overcome these restrictions and detect every type of land use and cover.
Practical implications
Data on urban growth are useful for planning land uses, estimating growth rates and advising the government on how best to use land. This can be achieved by monitoring and reviewing development plans using satellite imaging data and GIS tools.
Originality/value
The use of Random Forest for image classification and the employment of local knowledge to validate the accuracy of land cover classification is a novel approach to properly customize remote sensing applications.
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Olatunji David Adekoya, Chima Mordi, Hakeem Adeniyi Ajonbadi and Weifeng Chen
This paper aims to explore the implications of algorithmic management on careers and employment relationships in the Nigerian gig economy. Specifically, drawing on labour process…
Abstract
Purpose
This paper aims to explore the implications of algorithmic management on careers and employment relationships in the Nigerian gig economy. Specifically, drawing on labour process theory (LPT), this study provides an understanding of the production relations beyond the “traditional standard” to “nonstandard” forms of employment in a gig economy mediated by digital platforms or digital forms of work, especially on ride-hailing platforms (Uber and Bolt).
Design/methodology/approach
This study adopted the interpretive qualitative approach and a semi-structured interview of 49 participants, including 46 platform drivers and 3 platform managers from Uber and Bolt.
Findings
This study addresses the theoretical underpinnings of the LPT as it relates to algorithmic management and control in the digital platform economy. The study revealed that, despite the ultra-precarious working conditions and persistent uncertainty in employment relations under algorithmic management, the underlying key factors that motivate workers to engage in digital platform work include higher job flexibility and autonomy, as well as having a source of income. This study captured the human-digital interface and labour processes related to digital platform work in Nigeria. Findings of this study also revealed that algorithmic management enables a transactional exchange between platform providers and drivers, while relational exchanges occur between drivers and customers/passengers. Finally, this study highlighted the perceived impact of algorithmic management on the attitude and performance of workers.
Originality/value
The research presents an interesting case study to investigate the influence of algorithmic management and labour processes on employment relationships in the largest emerging economy in Africa.
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Sally Helen Stone and Laura Sanderson
This paper considers the exhibition: UnDoing. This research-through-curation project examined interactions within existing spaces and situations. This established links between…
Abstract
Purpose
This paper considers the exhibition: UnDoing. This research-through-curation project examined interactions within existing spaces and situations. This established links between the selected exhibits, the gallery, the city and with the continuum of the previous exhibition.
Design/methodology/approach
Carefully selected architects, designers and artists were invited to contribute—those who pursued a contextual approach; whose practice explored the way buildings, places and artefacts are reused, reinterpreted and remembered.
Findings
Through the act of curation, this research uncovered a series of different approaches to constructed sites and existing buildings, from layered juxtaposition, the refusal to undo, to interventions of new elements within architectural works.
Research limitations/implications
Curation offered the opportunity to consider works of architecture and of art through the same lens, for direct comparisons to be made and the influence of one upon the other to be comprehended.
Practical implications
The examination processes the architect employs is similar to that of the artist; the development of an understanding of place, and from this synthesis, creative interpretation. However, despite the similarities in the starting position, the elucidation developed by the artist can be vastly different to that of the architect.
Social implications
The juxtaposition and new classifications created by the exhibition encouraged visitors to look at art, architecture and the city in a different way; to grasp the direct link between the different subjects; and the possibilities created.
Originality/value
The two driving factors for UnDoing were places of previous occupation and the city of Manchester. The qualities of surrounding constructed environment combined were combined with attitudes towards existing structures and places.
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This paper aims to examine the informational value of credit rating changes for investors. The article analyses whether credit rating changes indicate the future financial…
Abstract
Purpose
This paper aims to examine the informational value of credit rating changes for investors. The article analyses whether credit rating changes indicate the future financial performance of a firm.
Design/methodology/approach
The study employs pooled time-series cross-section regression technique and two-sample t-test for analysis. The paper utilizes a firm's operating profit as a proxy of its future financial performance to understand what inference can be drawn about future financial performance from a change in a firm's credit rating.
Findings
The paper finds that a firm operating profit declines in the year after a credit rating downgrade. However, no such significant relationship is evident in the case of a rating upgrade. The results are consistent across rating categories and individual years of the sample period.
Research limitations/implications
The study uses non-financial corporate rating data; hence, the findings may not apply to credit rating changes in financial corporates and structured finance.
Practical implications
Investors and analysts can incorporate credit rating downgrade by CRAs as a key input in a firm's future financial forecast. Analysts and investment managers can also look at credit rating changes of firms in the same industry and draw a definite conclusion about which firm is likely to see a higher deterioration in performance.
Originality/value
The author has not come across any literature that directly investigates credit rating changes from the perspective of information content about future financial performance.
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Know your customer (KYC), accounting standards, issuance, clearing, and trade settlement became the major barrier to implement accounting, accountability and assurance process in…
Abstract
Purpose
Know your customer (KYC), accounting standards, issuance, clearing, and trade settlement became the major barrier to implement accounting, accountability and assurance process in supply chain finance (SCF). Blockchain technology features have the potential to solve accounting problems. This research focuses on exploring how blockchain technology provides solutions to overcome the barriers of accounting process in SCF. The benefits, opportunities, costs and risks related to blockchain adoption are also explored.
Design/methodology/approach
Multi-case study and qualitative methods are used with a framework based on blockchain role to overcome the accounting process barriers. Ten blockchain projects in SCF and 29 interviews of participants as a unit of analysis are considered.
Findings
The findings indicate that blockchain technology offers solutions to solve accounting, accountability and assurance problems in SCF. Validity, verification, smart contracts, automation and enduring data on trade transactions potentially solve those barriers. However, it is also necessary to consider costs such as implementation, technology, education and integration costs. Then there are possible risks such as regulatory compliance, operational, code development and scalability risk. This finding reflects the current status of blockchain technology roles in SCF.
Research limitations/implications
This study unveils blockchain's SCF accounting potential, emphasizing multi-case method limitations and future research prospects. Diverse contexts challenge findings' applicability, warranting cross-industry studies for deeper insights. Addressing selection bias and integrating quantitative measures can enhance understanding of blockchain's accounting impact.
Practical implications
Accounting professionals can get an idea of the future direction and impact of blockchain technology on accounting, accountability and assurance processes.
Originality/value
This study provides initial findings on the potential, costs and risks of blockchain that is beneficial for parties involved in SCF, especially for banks and insurance underwriters. In addition, the findings also provide direction for the contribution of blockchain technology to accounting theory in the future.
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