Value-Relevance of Financial and Non-Financial Information for the Publicly Traded Internet-Based Companies in the Post-Sarbanes-Oxley Period

2010 ◽  
Author(s):  
Lianna Aghabekyan
Keyword(s):  
Value Relevance ◽  
Financial Information ◽  
Publicly Traded ◽  
Sarbanes Oxley

Information Systems Expenditures and Firm Value

2004 ◽  
pp. 29-42 ◽  
Author(s):  
Ram S. Sriram ◽  
Gopal V. Krishnan ◽  
Kam-Wah Lai
Keyword(s):  
Information System ◽  
Competitive Advantage ◽  
Financial Services ◽  
Firm Value ◽  
Value Relevance ◽  
Market Value ◽  
Positive Association ◽  
Financial Information ◽  
Services Sector ◽  
Financial Services Sector

This chapter examines the value relevance of disclosures about IT expenditures. Using information about the amount of consulting fees paid to the incumbent auditor by their clients for designing and developing a financial information system (FIS), the study examines whether there is an association between market value of equity and IT expenditures. Since the financial services industry is an intensive user of IT and often relies on IT as a source of competitive advantage, the study uses a sample of firms from the financial services sector. This chapter contributes to our understanding of the importance of disclosures about IT expenditures in assessment of firm value. The results show positive association between investments in IT and market value of equity. Overall, the findings support the notion that investors perceive investments in IT as value-relevant.

Risk Shifts in the Market for Audits: An Examination of Changes in Risk for “Second Tier” Audit Firms

2009 ◽  
Vol 28 (2) ◽  
pp. 93-118 ◽  
Author(s):  
Chris E. Hogan ◽  
Roger D. Martin
Keyword(s):  
Business Risk ◽  
Switching Activity ◽  
Publicly Traded ◽  
Audit Market ◽  
Sarbanes Oxley ◽  
Big 4 ◽  
Audit Firms ◽  
Risk Characteristics ◽  
Changes In Risk ◽  
Second Tier

SUMMARY: The market for audit services has been affected in recent years by significant changes like the demise of Andersen and the implementation of the Sarbanes-Oxley Act of 2002. One impact of these market changes has been an increase in the frequency of auditor switches, and in particular, the frequency of clients switching from Big 4 auditors to smaller audit firms. We examine whether this switching activity has resulted in changes in the risk characteristics of publicly traded clients of Second Tier audit firms. This analysis is important as regulators are concerned about audit market concentration and would like to see the Second Tier audit firms expand their share of the publicly traded client market. Results indicate that Second Tier firms are accepting clients with potentially increased audit and client business risk characteristics relative to their existing client base, but they also appear to be “shedding” clients that have increased audit and client business risk characteristics relative to their existing client base. Some of the differences in risk characteristics for those departing clients are more pronounced in the period after 2000, when we expect the most significant changes in the audit market occurred. Second Tier auditors are increasingly exposed to more business risk as they accept larger clients coming from Big 4 predecessor auditors, which may increase their exposure to litigation.

scholarly journals The Value Relevance of Financial Information Under the Influence of Country Risks. The Case of the Indian Listed Companies

2016 ◽  
Vol 9 (2) ◽  
pp. 77-93 ◽  
Author(s):  
Ioan-Bogdan Robu ◽  
Mihai Carp ◽  
Costel Istrate ◽  
Cristian Popescu ◽  
Mihaela-Alina Robu
Keyword(s):  
Financial Market ◽  
Linear Models ◽  
Value Relevance ◽  
Financial Statements ◽  
Country Risk ◽  
Financial Information ◽  
Decision Making Process ◽  
Accounting Numbers ◽  
Set Up ◽  
Over Time

AbstractIn the decision-making process investors need quality financial information based on reported accounting numbers. Such numbers are present in financial statements and must meet a series of fundamental characteristics, such as relevance and faithful representation. The present paper aims to analyse and assess the value relevance of financial information on the financial market in India under the influence of the main country risk components (i.e. economic risk and freedom to set up businesses, corruption control, financial, fiscal, monetary and investment freedom). The research was carried out on a sample of companies listed on the regulated market in India between 2006 and 2014. The results of applying general linear models have shown that, over time, the country risk can have a significant influence on the value relevance of the financial statements reported at the financial market level.

scholarly journals The Sarbanes-Oxley Act Of 2002 And Its Impact On The Attorney-Client Privilege And Legal Ethics

2011 ◽  
Vol 1 (12) ◽  
Author(s):  
Martin D. Carrigan ◽  
Theodore C. Alex
Keyword(s):  
Publicly Traded ◽  
Legal Ethics ◽  
Sarbanes Oxley

Congress passed the Sarbanes-Oxley to restore confidence in publicly traded corporations. The Act changed legal ethics and decades old attorney-client privilege. This paper explores its impact on business.

scholarly journals Earnings Management and Value Relevance in Nigeria: A Pre and Post Ifrs Analysis

2018 ◽  
Vol 5 (5) ◽  
pp. 4672-4680
Author(s):  
Sunny O. Temile ◽  
Al Bahloul Mohammed ◽  
Dadang Prasetyo Jatmiko
Keyword(s):  
Earnings Management ◽  
Management Practices ◽  
Value Relevance ◽  
Stock Exchange ◽  
Outer Space ◽  
Financial Sector ◽  
Financial Information ◽  
Annual Reports ◽  
Space Law ◽  
The Impact

The purpose of this article is to analyse the literature concerning legal framework for outer space activities by states. Review was conducted on the elements of national space law, including literature critiquing particular strengths or weaknesses of existing laws and literature, on the obligations placed on States under international law and on why writers make particular recommendations as to the content of legislation. The article will summarise the key elements one would anticipate finding in the outer space regulatory framework and which will form the structure of the analytical framework when considering how States implement international space law in practice. In recent times, the issue of earnings management and value relevance has caused financial reports to come under scrutiny. With the introduction of the International Financial Reporting Standards (IFRS), a lot of studies have been carried out to see what kind of effect it has on key financial variables such as earnings management and value relevance of firms. Therefore, this study, “Earnings Management and Value Relevance in Nigeria: A Pre and Post IFRS Analysis”, examined the impact of IFRS on Earnings Management and Value Relevance of financial information in Non-Financial Companies quoted in the Nigerian Stock Exchange (NSE). Data gathered are from the financial statements and annual reports of 60 Companies from the Non-Financial Sector of the Nigeria Stock Exchange because companies in the financial sector are not overall amendable to accruals model. The empirical study covered the period from 2007 to 2016 statistical and econometric tools such as Panel data regression and paired samples tests. The results revealed an increase in value relevance, and a decrease in earnings management in the Post-IFRS era. Thus, we infer that earnings management level has decreased while value relevance has increased since IFRS adoption. This study therefore recommends that the relevant regulatory bodies should be empowered by the government to enable the formulation of effective measures and policies that check earnings management practices, and foster value relevance of the financial information presented in the annual reports and accounts of Nigerian companies.

scholarly journals Influence of the Sarbanes-Oxley Act on Financial Reporting Quality: An Overview of EU Firms Cross-Listed in the USA

2021 ◽  
Author(s):  
Ujkan Bajra ◽  
Rrustem Asllanaj
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Publicly Traded ◽  
Publicly Traded Companies ◽  
Sarbanes Oxley ◽  
Novel Approach ◽  
The Us ◽  
The Usa

Abstract This paper investigate whether compliance with the Sarbanes–Oxley Act of 2002 (SOX) Sect. 302 (financial reporting) and 404 (internal controls) enhances financial reporting quality (FRQ). This study focuses on EU publicly traded companies that are cross-listed in the US markets. Using a novel approach with respect to operationalization of the SOX, the empirical research integrated into this paper advances the understanding of financial reporting quality for both practitioners and policymakers. The study argues that financial reporting quality increased after SOX entered into force but, notably, we find that FRQ improves with compliance with SOX302 but not with SOX404. Examination of the latter relationship at the subsection level also reveals that compliance with certain SOX requirements is not satisfactory. We find that three out of six subsections of SOX302 are directly associated with financial reporting, while subsections (1), (5) and (6) of SOX302 are not related with FRQ, indicating that the management team, albeit not entirely, provides a reliable financial reporting systems. We also find that compliance with some SOX404’s subsections has been relatively low (i.e. subsections (1) and (3) of SOX404)), suggesting that corporations have not established and are not maintaining suitable internal control systems over financial reporting.

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