The impact of internet financial reporting on Egyptian company’s performance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amani Hussein ◽  
Ghadir Nounou
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Stock Return ◽  
Regulatory Body ◽  
Regression Analyses ◽  
Data Set ◽  
Content Type ◽  
Company Value ◽  
Significant Difference ◽  
The Impact

Purpose This study aims to examine the impact of internet financial reporting (IFR) on companies’ performances as measured by three performance indicators, namely, stock price, stock returns and company value. Design/methodology/approach A sample of 139 non-financial companies listed in the Egyptian stock exchange is used and classified as 108 IFR companies and 31 non-IFR companies. To test the research hypotheses, an independent t-test and multiple linear regression analyses are used. Findings The results indicate that there are no significant differences between IFR companies and non-IFR companies for both stock price and stock return variables. Conversely, there is a significant difference between IFR companies and non-IFR companies in the company value variable. These results imply rejecting hypotheses H1 and H4 and accepting the hypothesis of H7 that the presence of IFR has an impact on company value. The multiple regression analyses results indicate a significant relation between the scope of IFR and stock price. Likewise, between the degree of IFR and company value. Both degree and scope of IFR have an insignificant impact on stock return, which infer that applying different performance measures can reveal different conclusions. Research limitations/implications This research is a snapshot of IFR limited to a cross-sectional study and could not study the longitudinal data of internet reporting. Second, Marston and Polei (2004) contend that “weights contain an element of subjectivity, which cannot be completely avoided in the composition of such a score” (p. 297) and a variation in the disclosure index can lead to a modification in the results (Kaur and Kaur, 2020). This research applied a weighted index to measure the degree of IFR, which may affect the results and may change it if other indexes are applied. Moreover, the scores of the degree and scope of information disclosure are assumed to be similar every year due to the lack of information regarding the variations in content and presentation in the companies’ websites. Finally, the absence of a complete data set and stock prices for some companies in the sample. Practical implications To enhance the quantity and quality of IFR could be implemented through setting regulations and standards to govern IFR practices companies in Egypt. Moreover, the trade-off of the requirement of the Egyptian Financial Supervisory Authority for Egyptian companies make information available online and the secrecy culture profound in the Egyptian society (Ahmed et al., 2015) involve assigning a regulatory body for monitoring the IFR practices to ensure disseminating timely and accurate information that helps investors make rational decisions. Social implications The researchers recommend the suggestion to have an external assurance conducted by external auditors to enhance the accuracy and credibility of the IFR information. Originality/value Based on prior literature, no studies in Egypt compare between IFR companies and non-IFR companies concerning stock price and company value as measured by Tobin’s Q. Moreover, few research studies in Egypt covered the degree of IFR disclosure whilst not addressing the impact on the stock price. In addition, no prior study examined the scope of IFR disclosure in Egypt. Therefore, the research findings attribute to literature.

scholarly journals The impact of CEOs’ accounting backgrounds on earnings management and conservatism

2017 ◽  
Vol 10 (1) ◽  
pp. 4-24
Author(s):  
Nan Hu ◽  
Rong Huang ◽  
Xu Li ◽  
Ling Liu
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Discretionary Accruals ◽  
Accounting Conservatism ◽  
Policy Implications ◽  
Good News ◽  
Content Type ◽  
Accounting Research ◽  
Significant Difference ◽  
The Impact

Purpose Existing literature in experimental accounting research suggests that accounting professionals and people with accounting backgrounds tend to have a lower level of moral reasoning and ethical development. Motivated by these findings, this paper aims to examine whether chief executive officers (CEOs) with accounting backgrounds have an impact on firms’ earnings management behavior and the level of accounting conservatism. Design/methodology/approach The authors classify CEOs into those with and without accounting backgrounds using BoardEx data. Using discretionary accruals from several different models, they do not find that CEOs with accounting backgrounds are more likely to engage in income-increasing accruals. However, the authors find that CEOs with accounting backgrounds exhibit lower levels of conservatism, proxied by C-scores and T-scores (Basu, 1997). This finding suggests that CEOs with accounting backgrounds recognize bad news more quickly than good news, consistent with the accounting principle of “anticipating all losses but anticipating no gains”. Findings The authors show that firms whose CEOs have accounting backgrounds exhibit lower levels of accounting conservatism. However, these firms do not exhibit higher levels of income-increasing discretionary accruals. This study documents the impact of CEOs’ educational backgrounds on firms’ accounting choices and confirms prior findings in experimental accounting research using large sample archival data. Originality/value This paper is the first study that investigates the impact of CEOs’ accounting backgrounds on firms’ financial reporting policy. The findings may have some policy implications. If accounting backgrounds of CEOs can make a significant difference on firms’ behavior, it is reasonable to make CEOs accountable for the quality of financial reporting. This paper is one of the first to empirically test inferences drawn by experimental accounting research. There has been a gap between archival and experimental accounting studies. The authors propose that interesting research questions can be addressed by filling in such a gap.

Digital corporate reporting and value relevance: evidence from the US and Japan

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yuan George Shan ◽  
Indrit Troshani
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Value Relevance ◽  
Accounting Information ◽  
Financial Information ◽  
Content Type ◽  
Corporate Reporting ◽  
The Us ◽  
The Impact ◽  
Corporate Financial Reporting

PurposeThe study improves current understanding concerning the implications of digital corporate reporting technology on the informativeness of accounting information.Design/methodology/approachIt looks at how XBRL, an exemplar digital corporate financial reporting technology, affects value relevance of accounting information in the US and Japan, two key jurisdictions where XBRL has been mandated. We operationalise stock price and return value relevance models to assess and compare predicted associations between selected accounting measures and market value of equity in these countries.FindingsWe predict that the selected accounting measures are more value relevant after XBRL was mandated than before. We find evidence to support our prediction for the US sample. We also predict and find that the contribution of XBRL to the value relevance of the selected accounting measures is greater in the US than in Japan. Overall, our evidence provides support that digital corporate reporting technology enhances relevance and reliability of accounting measures.Originality/valueThe study appears to be the first to have examined the impact of XBRL on value relevance whilst comparing between two major jurisdictions. The study extends emerging but limited literature concerning the benefits of digital corporate financial reporting for enhancing the communication between firms and users of financial information. The findings are useful to both users of financial information and standard setters.

Executive pay bandwagon and stock price crash risk

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hong Luo ◽  
Junfeng Wu ◽  
Wan Huang ◽  
Yongliang Zeng
Keyword(s):  
Earnings Management ◽  
Internal Control ◽  
Stock Price ◽  
Tax Avoidance ◽  
Crash Risk ◽  
Executive Pay ◽  
Data Set ◽  
Content Type ◽  
Listed Firms ◽  
The Impact

Purpose This paper aims to investigate the impact of executives’ self-interested behaviors induced by the pay bandwagon on stock price crash risk in Chinese listed firms and attempt to shed light on the influencing channels of this effect. Design/methodology/approach The empirical analysis is based on the panel data set which contains information on the executives and stock price of 11,710 firm-year observations over the period 2007–2015. The multiple linear regression models are implemented to examine whether the executive pay bandwagon affects corporate future stock price crash risk. Then, earnings management, tax avoidance and overinvestment are applied as the behavior choice of executive pay bandwagon to analyze the potential influencing channels. Findings Results indicate that the lower the executives’ pay is than the median pay level of executives in firms of similar size and industry, incentives of pay bandwagon are stronger, leading to a higher future stock price crash risk. Moreover, evidence shows that the positive relationship between executive pay bandwagon and crash risk is attenuated when firms have strong external monitoring mechanisms such as Big Four auditors, cross-listing in the Hong Kong stock exchange, high marketization process and high institutional ownership. Then, some weak evidence supports that internal governance such as internal control plays the same moderating role. In addition, based on the path test, the stock price crash effect of the executive pay bandwagon has a complete tax avoidance intermediary effect and a partial earnings management intermediary effect. Originality/value This study contributes to the executive compensation literature from a psychological perspective on the economic consequences research brought about by the pay bandwagon for China’s listed firms. Moreover, this paper provides a supplement to the literature on factors which is completely different from previous studies that affect the future stock price crash risk.

Land under roads and the power of politic

2018 ◽  
Vol 30 (1) ◽  
pp. 73-91
Author(s):  
Hassan Mohamed Abdalla Elhawary
Keyword(s):  
Financial Reporting ◽  
Local Governments ◽  
Relevant Literature ◽  
Policy Recommendations ◽  
Data Set ◽  
Financial Reports ◽  
Content Type ◽  
Early Adoption ◽  
Analytical Review ◽  
The Impact

Purpose The purpose of this paper is to answer the following questions: What are the theoretical and practical antecedents for recognising land under roads (LUR) as an asset in local government financial reports? Why was the process of regulating this aspect of accounting practice so protracted and so controversial? Design/methodology/approach The method used a critical analytical review and synthesis of relevant literature. Findings This study rejects the recognition of LUR, and suggests that the requirements to account for LUR should be withdrawn immediately. Regardless of the way that the debate has evolved as to the need or otherwise to value LUR or the methodology to be adopted, until the issue of a consistent, standards-based data set is addressed, there is unlikely to be a unified useful outcome. Research limitations/implications The study’s findings provided opportunity to reach an overall conclusion and make policy recommendations regarding the saga of accounting for LUR by Australian local governments. However, the ability to generalise beyond Australia to other countries would need to be tested by additional research. Practical implications The study’s findings provided assessment of the impact of valuing LUR on financial reporting by local governments and suggested policy recommendations. Social implications This study provided an understanding of Australian local governments’ accounting choices in regard to the valuation of LUR and documented the history of early adoption of valuation of LUR by local governments. Originality/value The literature on the public sector and accrual accounting is extensive and varied. However, there have been only isolated studies on the specific issue of LUR (Barton, 1999a, 1999b; Hoque, 2004; Rowles et al., 1998a, 1998b, 1998c, 1999). This study adds to the few isolated studies on the specific issue of accounting for LUR. Originality/value – This study provided policymakers with rich information about accounting for LUR and, it should have the capacity to impact on the future policy directions and recommendations.

Does the IFRS improve earnings quality? A comparison of Turkish GAAP and IFRS

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aydın Karapınar ◽  
Figen Zaif
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Quantitative Research ◽  
Earnings Quality ◽  
Financial Statements ◽  
Discretionary Accruals ◽  
Net Income ◽  
Data Set ◽  
Content Type ◽  
Significant Difference

Purpose The purpose of this study is to reveal the effect on earnings quality of switching to International Financial Reporting Standards (IFRS) from Turkish generally accepted accounting principles (GAAP) by comparing two sets of financial statements based on Turkish GAAP and IFRS. Design/methodology/approach This study is based on mathematical modeling. The variables (total assets, net income, total accruals, cash receivables, return on assets and size) in the models are core to the quantitative research that examines the relationship between them. In this study, the total accruals are computed based on the indirect approach, and the prediction error of the model represents discretionary accruals that reflect earnings management. The data set includes financial data prepared under IFRS and Turkish GAAP. The univariate and multivariate analyses are conducted by SPSS. Findings The results of this study indicate that IFRS does not cause any significant differences in total assets, but the net income under IFRS is larger compared to that under the Turkish GAAP. It is also found that while there is no significant difference in total accruals, there is a difference in discretionary accruals. In other words, Turkish firms use income-reducing discretionary accruals when adopting IFRS. Originality/value This study provides more insights into the effect of IFRS on earnings quality. It also provides evidence of the effect of accounting culture on IFRS adoption. As a code-law country in Turkey, publicly traded firms have to prepare financial statements based on both Turkish GAAP, which is rule-based and restricts management decisions with strict rules, and the principle-based IFRS which leaves more room to manipulate. To the authors’ knowledge, this is the first study that reveals the effect of accounting standards on earnings management by comparing two sets of financials of the same period prepared under different standards.

Consequences and determinants of IFRS convergence in India

2020 ◽  
Vol 28 (2) ◽  
pp. 303-322
Author(s):  
Vincent Tawiah ◽  
Pran Boolaky
Keyword(s):  
Capital Structure ◽  
Financial Reporting ◽  
Rational Analysis ◽  
Content Type ◽  
Generally Accepted Accounting Principles ◽  
Family Control ◽  
Financial Reporting Standards ◽  
Significant Difference ◽  
The Impact

Purpose The purpose of this paper is to provide evidence of how convergence to International Financial Reporting Standards (IFRS) impacts accounting values and the determinants of variation in equity adjustments among Indian companies. Design/methodology/approach Using a sample of 323 listed companies, the authors empirically test whether there is a significant difference between converged IFRS (Ind.AS) and Indian Generally Accepted Accounting Principles (GAAP) (AS) reported figures and ratios and why companies adjust differently. Findings This paper reveals that fair valuation under Ind.AS causes a significant decrease in goodwill. A substantial decrease in both current and long-term liabilities because of non-recognition of proposed dividend, discounting of long-term provision per Ind.AS was also found. The variations in equity adjustment were significantly influenced by capital structure, level of family control and auditor type. Practical implications This paper provides insights to users who are interested in historical data, that Ind.AS brings significant changes in the accounting values and ratios and the impact differs among companies based on capital structure, ownership and auditor type. Originality/value This paper contributes to the literature of IFRS convergence in India by providing rational analysis of the differences between IFRS, Indian converged GAAP and Indian local GAAP among companies and its impact on accounting values.

Efficiency and bank margins: a comparative analysis of Islamic and conventional banks in Yemen

2019 ◽  
Vol 10 (1) ◽  
pp. 50-72
Author(s):  
Fekri Ali Shawtari ◽  
Mohamed Ariff ◽  
Shaikh Hamzah Abdul Razak
Keyword(s):  
Fixed Effects ◽  
Banking Sector ◽  
Influential Factor ◽  
Islamic Banks ◽  
Data Set ◽  
Content Type ◽  
Significant Difference ◽  
Conventional Banks ◽  
The Impact ◽  
Non Parametric

PurposeThe purpose of this paper is to examine the determinants of bank margins in the Yemeni banking sector for Islamic and conventional banks. The first objective is to investigate whether there is a significant difference between the margins of conventional and Islamic banks. The second objective is to examine whether efficiency represents an influential factor in determining bank margins for Islamic and conventional banks controlling for other micro and macro variables.Design/methodology/approachUsing a data set of banks in Yemen for the post-liberalisation period from 1996 to 2011, the study utilises panel data with unbalanced observations for 16 banks, of which four are Islamic banks and the remainder conventional banks. Parametric and non-parametric techniques are complemented by dummy variable regression using random effects. Panel fixed effects regression was also undertaken as a robustness check.FindingsThe paper finds that the overall bank margin in Yemen has steadily decreased during the observation period with the exception of the year 2011. The parametric and non-parametric results show that the bank margins are significantly higher for conventional banks than for Islamic banks. The results provide evidence that bank margins are related to neither types of efficiency, but are affected by capitalisation, size, the opportunity cost of the reserve and liquidity, although the impact is shaped differently for Islamic and conventional banks.Practical implicationsThe paper provides a basis for regulators and bankers for assessing the viability of the banking sector and proposes policies to restructure the industry to enhance its performance.Originality/valueThis paper adds value to the literature for the Yemeni banking sector and extends the previous research on the determinants of bank margins by focusing on the impact of efficiency on bank margins. Also, it compares the Islamic banks with different types of conventional banks in Yemen in their margins trend.

Voluntary disclosure of financial information on the internet by large companies in Slovenia

Kybernetes ◽  
2018 ◽  
Vol 47 (3) ◽  
pp. 458-473 ◽  
Author(s):  
Tatjana Dolinšek ◽  
Andreja Lutar-Skerbinjek
Keyword(s):  
Financial Reporting ◽  
Voluntary Disclosure ◽  
Binary Logistic Regression ◽  
Financial Information ◽  
The Internet ◽  
Legal Form ◽  
Content Type ◽  
Significant Difference ◽  
Financial Disclosures ◽  
The Impact

Purpose The purpose of this research was to examine the impact of the determinants and characteristics of voluntary internet financial disclosures by large companies in Slovenia. With this research, the authors wanted to determine the factors which impact on the differences between companies that use internet financial reporting and those that do not. Design/methodology/approach The research was conducted on a sample of large companies in Slovenia (n = 192), which was divided into two groups, depending on whether they use internet financial reporting. A binary logistic regression was undertaken to assess whether voluntary disclosure of financial information on the internet was related to the company’s size, profitability, age, company’s legal form, ownership dispersion and industry sector. Findings The research has shown that there is a statistically significant difference between the companies which use or do not use internet financial reporting. The likelihood that the companies will publish the internet financial information is greater in the case of public limited companies, companies that deal with the financial, energy or ICT sectors and companies that have a larger ownership concentration. Originality/value This is one of the first studies in Slovenia that was used to determine the factors according to which the companies that use internet financial reporting differentiate from those that do not.

scholarly journals The impact of the COVID-19 outbreak on Chinese-listed tourism stocks

2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Wenmin Wu ◽  
Chien-Chiang Lee ◽  
Wenwu Xing ◽  
Shan-Ju Ho
Keyword(s):  
Stock Returns ◽  
Cultural Differences ◽  
Stock Price ◽  
Negative Impact ◽  
Tourism Industry ◽  
Regression Analyses ◽  
Short Term ◽  
Tourism Sector ◽  
Event Study Method ◽  
The Impact

AbstractThis research explored the effects of the coronavirus disease (COVID-19) outbreak on stock price movements of China’s tourism industry by using an event study method. The results showed that the crisis negatively impacted tourism sector stocks. Further quantile regression analyses supported the non-linear relationship between the government’s responses and stock returns. The results present that the resurgence of the virus in Beijing did bring about a short-term negative impact on the tourism industry. The empirical results can be used for future researchers to conduct a comparative study of cultural differences concerning government responses to the COVID-19.

Increasing revenue and attendance in Canadian Baptist churches

2015 ◽  
Vol 42 (12) ◽  
pp. 1071-1089
Author(s):  
Alan Chan ◽  
Bruce G. Fawcett ◽  
Shu-Kam Lee
Keyword(s):  
Church Health ◽  
Eastern Canada ◽  
Data Set ◽  
Content Type ◽  
Factors Affecting ◽  
Scarce Resources ◽  
Baptist Churches ◽  
And Performance ◽  
The Impact ◽  
Simulation Exercises

Purpose – Church giving and attendance are two important indicators of church health and performance. In the literature, they are usually understood to be simultaneously determined. The purpose of this paper is to estimate if there a sustainable church congregation size using Wintrobe’s (1998) dictatorship model. The authors want to examine the impact of youth and adult ministry as well. Design/methodology/approach – Using the data collected from among Canadian Baptist churches in Eastern Canada, this study investigates the factors affecting the level of the two indicators by the panel-instrumental variable technique. Applying Wintrobe’s (1998) political economy model on dictatorship, the equilibrium level of worship attendance and giving is predicted. Findings – Through various simulation exercises, the actual church congregation sizes is approximately 50 percent of the predicted value, implying inefficiency and misallocation of church resources. The paper concludes with insights on effective ways church leaders can allocate scarce resources to promote growth within churches. Originality/value – The authors are the only researchers getting the permission from the Atlantic Canada Baptist Convention to use their mega data set on church giving and congregation sizes as per the authors’ knowledge. The authors are also applying a theoretical model on dictatorship to religious/not for profits organizations.

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