Financial reporting quality and dividend policy: New evidence from an international level

2022 ◽  
pp. 102026
Author(s):  
Quoc Dat Trinh ◽  
Christian Haddad ◽  
Kim Thuan Tran
Keyword(s):  
Financial Reporting ◽  
Dividend Policy ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
International Level ◽  
New Evidence

The Role of Financial Reporting Quality in Mitigating the Constraining Effect of Dividend Policy on Investment Decisions

2013 ◽  
Vol 88 (3) ◽  
pp. 1007-1039 ◽  
Author(s):  
Santhosh Ramalingegowda ◽  
Chuan-San Wang ◽  
Yong Yu
Keyword(s):  
Financial Reporting ◽  
Firm Value ◽  
Dividend Policy ◽  
Investment Decisions ◽  
Reporting Quality ◽  
Data Availability ◽  
Financial Reporting Quality ◽  
High Quality ◽  
Investment Projects

ABSTRACT Miller and Modigliani's (1961) dividend irrelevance theorem predicts that in perfect capital markets dividend policy should not affect investment decisions. Yet in imperfect markets, external funding constraints that stem from information asymmetry can force firms to forgo valuable investment projects in order to pay dividends. We find that high-quality financial reporting significantly mitigates the negative effect of dividends on investments, especially on R&D investments. Further, this mitigating role of financial reporting quality is particularly important among firms with a larger portion of firm value attributable to growth options. In addition, we show that the mitigating role of high-quality financial reporting is more pronounced among firms that have decreased dividends than among firms that have increased dividends. These results highlight the important role of financial reporting quality in mitigating the conflict between firms' investment and dividend decisions and thereby reducing the likelihood that firms forgo valuable investment projects in order to pay dividends. Data Availability: Data are available from public sources identified in the paper.

scholarly journals Does Selling Non-Audit Services Impair Auditor Independence? New Research Says, “Yes”

2015 ◽  
Vol 9 (2) ◽  
pp. P1-P6 ◽  
Author(s):  
Monika Causholli ◽  
Dennis J. Chambers ◽  
Jeff L. Payne
Keyword(s):  
Financial Reporting ◽  
Strong Evidence ◽  
Audit Quality ◽  
Reporting Quality ◽  
Auditor Independence ◽  
Financial Reporting Quality ◽  
Fresh Perspective ◽  
New Research ◽  
New Evidence ◽  
Non Audit Services

SUMMARY A recently published academic study by Causholli, Chambers, and Payne (2014) brings new evidence to a long-standing debate about whether the provision of non-audit services (NAS) can impair auditor independence. Prior research on this question has largely found no evidence of lower financial reporting quality when auditors provide high levels of NAS. By considering the potential that future NAS, rather than current NAS levels, could impair auditor independence, Causholli et al. (2014) bring a fresh perspective on the question. They argue that it is the potential for new NAS revenue that would most likely cause auditors to have impaired independence. They find strong evidence that audit quality suffers when clients are willing to purchase future NAS from their auditor.

Does IPSAS adoption reduce corruption’s level? New evidence from ODA beneficiary countries

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mounira Hamed-Sidhom ◽  
Yosra Hkiri ◽  
Ahmed Boussaidi
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Content Type ◽  
Underdeveloped Countries ◽  
Useful Signal ◽  
The Impact ◽  
New Evidence ◽  
Important Evidence

Purpose The accounting literature suggests that the use of accounting standards with greater quality promotes the financial reporting quality and enhances accountability. This study aims to investigate the effect of the International Public Sector Accounting Standards (IPSAS) adoption, by official development assistance (ODA) beneficiary countries, on the reported level of their perceived corruption. Design/methodology/approach We investigate a sample of ODA beneficiary countries (168 country-year observations) facing rising levels of corruption. We apply a panel regression analysis for these countries during the period from 2015 to 2018. Findings The findings suggest that the IPSAS’ adoption can significantly influence the level of perceived corruption and implement important evidence about promoting transparency factor for underdeveloped countries. Originality/value This study contributes to the accounting literature by examining the theoretical and empirical insights about the impact of the of IPSAS’ adoption on the level of corruption, which can be considered as a new area of accounting literature and a useful signal for stakeholders in countries seeking adequate solutions to combat and fight corruption activities.

CEO pulchronomics and appearance discrimination

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jung Yeun (June) Kim ◽  
Linna Shi ◽  
Nan Zhou
Keyword(s):  
Financial Reporting ◽  
Ceo Compensation ◽  
Golden Ratio ◽  
Reporting Quality ◽  
Superior Performance ◽  
Financial Reporting Quality ◽  
Content Type ◽  
Beauty Premium ◽  
Corporate Social ◽  
New Evidence

PurposePulchronomics studies the economics of beauty. The purpose of this paper is to research CEO pulchronomics by examining whether a beauty premium exists in CEO compensation and whether this beauty premium is justified by differences in CEO performance.Design/methodology/approachThe authors calculate a facial attractiveness scores (FAS) based on facial symmetry, facial structure and the golden ratio. The authors then perform OLS regressions to examine the effect of CEO beauty on CEO compensation and firm performances.FindingsThe authors find that base salaries for attractive CEOs are higher than those for unattractive CEOs, but incentive pays for attractive CEOs are not different from those for unattractive CEOs. The latter is likely due to the fact that attractive CEOs do not outperform unattractive CEOs in operations, innovation, corporate social responsibility and financial reporting quality.Originality/valueSince the CEO beauty premium is not supported by the superior performance of attractive CEOs, this paper provides new evidence of appearance discrimination in CEO compensation.

The effective factors of financial information quality in listed companies on Tehran Stock Exchange

2014 ◽  
Vol 1 (1) ◽  
pp. 201
Author(s):  
Somayeh Zare Rafiee ◽  
Samaneh Zare Rafiee ◽  
Farzaneh Heidarpoor
Keyword(s):  
Financial Reporting ◽  
Capital Market ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Listed Companies ◽  
Financial Reporting Quality ◽  
Screening Methods ◽  
Growth Opportunities

The aim of this study was to investigate the effects of growth opportunities and dividend policy on the quality of financial reporting in Iran's capital market. The period in the study is 6-year (from 2006 till 2011) and the population is all listed companies in Tehran Stock Exchange. The sample was also obtained by screening methods, includes 84 companies. The results of the test research hypotheses using panel data suggest that in capital market of listed companies the quality of financial reporting in Iran had a direct relationship with the dividend policy. It means that increasing in dividend policy lead to increases in amount of financial reporting quality effect. Also obtained results indicate that growth opportunities have a direct impact on the quality of financial reporting. So that firms with higher growth opportunities will increase effectiveness and financial reporting quality.

The effect of financial reporting quality on corporate dividend policy

2017 ◽  
Vol 22 (2) ◽  
pp. 753-790 ◽  
Author(s):  
David S. Koo ◽  
Santhosh Ramalingegowda ◽  
Yong Yu
Keyword(s):  
Financial Reporting ◽  
Dividend Policy ◽  
Reporting Quality ◽  
Financial Reporting Quality

scholarly journals The Mapping Of Investor Perception On The High Financial Reporting Quality

2021 ◽  
Vol 6 (1) ◽  
pp. 1
Author(s):  
Muljanto Siladjaja ◽  
Yuli Anwar
Keyword(s):  
Financial Reporting ◽  
Information Quality ◽  
Dividend Policy ◽  
Earnings Quality ◽  
Accounting Information ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Future Market ◽  
Maximum Utility ◽  
Accounting Information Quality

This research mapped investor perception on high accounting information quality, particularly the accurate prediction model for future returns. The high financial reporting quality indicates the company's prospective improvement in the future under the right management. This positively affects market price fluctuation, where the investor has minimum distortion on accounting information and low risk. The obedience to accounting standards and tax regulation illustrates actual earnings in reducing agency cost's volatile movement. This study used questionnaires to gather information. The respondents were related parties with dominant influence in investment, specifically 384 samples. Through the structural equation model, the mapping of earnings quality, future market value, and dividend policy played a critical role in minimizing misleading information and improving accounting information quality. The high financial reporting quality indicates the managements' obedience in maximum implementation of regulations with continuous improvements. In this regard, the dividend policy has significantly contributed to the improvement of the earnings quality. The Decision Tree Model was used in mapping investor perception on earnings quality to estimate the high probability of a long or short position for their maximum utility. When the dividend policy is used as a mandatory indirect obligation, the management should provide high accounting information quality.

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