scholarly journals Western-style capital market reforms in Russia: Implications for market efficiency and firms’ financing decisions

2020 ◽  
Vol 10 (3) ◽  
pp. 62-74
Author(s):  
Oksana Kim
Keyword(s):  
Financial Reporting ◽  
Capital Market ◽  
Weak Form ◽  
Foreign Direct Investments ◽  
Informational Efficiency ◽  
Russian Government ◽  
Public Firms ◽  
Financing Decisions ◽  
Russian Stock Market ◽  
Over Time

Over the past decade, the Russian government implemented numerous reforms aimed at attracting investor capital and improving the capital market conditions. These reforms included adoption of stringent listing regulations and governance norms, revisions in the tax and ownership laws, restructuring of the major stock exchanges, and more importantly, adoption of International Financial Reporting Standards (IFRS) in 2011. We employ an adaptive market hypothesis (AMH) perspective formulated by Lo (2004, 2005) to examine whether the informational efficiency of the market changed over time as a result of these reforms. While we report that the Russian stock market is still not weak-form efficient, as it was before the reforms, we find the evidence of improvement in efficiency over time. Next, we find that financing decisions of Russian public firms changed following adoption of IFRS when financial statements became more transparent and better aligned with informational needs of local and foreign investors. Particularly, Russian companies that adopted IFRS were more likely to raise finance via issuance of equity rather than debt instruments, whereas for non-adopters there was no change in the firm capital structure. Finally, we report that there was an increase in the inflow of foreign direct investments (FDI) in the post-reform period, suggesting that the above noted reforms conferred significant benefits to the entire Russian economy.

scholarly journals TATA KELOLA PERUSAHAAN DAN VARIABILITAS LABA

2018 ◽  
Vol 2 (2) ◽  
pp. 224-246
Author(s):  
Ikka Tiaraintan Hariyanto ◽  
Novrys Suhardianto
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Capital Market ◽  
Governance Mechanism ◽  
Working Capital ◽  
Public Firms ◽  
Political Risks ◽  
Debt Contract ◽  
Effect Regression ◽  
Equity Ratio

This research aims to examine the influence of firm size, leverage, and corporate governance on earnings variability. We relate the earnings variability with the hypotheses of positive accounting theory and governance mechanism in Indonesia to identify factors that influence earnings variability. Using purposive sampling, we got 628 observations of Indonesian public firms during 2012 until 2014. This research uses common and fixed effect regression model to analyse the data. The results of this analysis show that the big firms have higher profit variability due to higher business and political risks. However, this finding applies only to samples with weak governance. Moreover, the greater the debt the company has, the greater the level of profit variability. This is due to the company's incentives to avoid breaching the debt contract, such as maintaining debt to equity ratio, working capital, or shareholder equity, by adopting aggressive accounting policies. Lastly, the CG mechanism does not affect the variability in earnings, indicating the lack of effective corporate governance in Indonesia. The CG mechanism in Indonesia has not generally been able to influence financial reporting behavior and capital market regulators need to take action to improve the effectiveness of corporate governance in Indonesia.

scholarly journals Pengujian Efisiensi Dan Peningkatan Efisiensi Bentuk Lemah Bursa Efek Indonesia Pada Saat Dan Sesudah Krisis Moneter Pada Saham-Saham LQ-45

2008 ◽  
Vol 1 (3) ◽  
Author(s):  
Ibnu Khajar
Keyword(s):  
Capital Market ◽  
Weak Form ◽  
Efficient Markets ◽  
Related Information ◽  
Security Price ◽  
Random Walk Theory ◽  
Price Movements ◽  
Current Price ◽  
Over Time ◽  
Weak Form Efficiency

Efficient markets can be classified into three forms: weak, semi-strong, and strong. Weak-form efficiency suggests that security prices reflect all trade-related information, such as historical security price movements and volume of securities trades, so they don’t relate with current price and volume. In other words, historical price movements independent or random over time. Thus, test of weak-form efficiency is ralated with random walk theory. This research has two objectives. The first objective is to analyze whether Indonesian capital market has been efficient (weak-form). The second one is to analyze increasing efficient market in two different periode. The study was carried out on the 10 stock in the LQ-45 index, based on crisis and after crisis during 1998 and 2006 period. The first objective was analyzed by using run and autocorrelation test. The result shows that most stock are random in two different period. The second one was analyzed by searching number stocks that is random in crisis and after crisis period. The result shows there is not increasing weak-form efficiency

Investigation of Timing Anomalies in the Russian Stock Market in the Post-Crisis Period

2019 ◽  
Vol 12 (3) ◽  
pp. 37-47
Author(s):  
I. Ya. Lukasevich
Keyword(s):  
Stock Market ◽  
Information Technologies ◽  
Real Data ◽  
Weak Form ◽  
Fair Value ◽  
Presidential Decree ◽  
Day Of The Week ◽  
Russian Stock Market ◽  
Economic Growth Rates ◽  
Global And Local

The implementation of the May presidential decree aimed at Russia’s joining the top five global economies and achieving economic growth rates above the world’s average while maintaining macroeconomic stability requires a highly developed and efficient stock market ensuring the accumulation of capital and its deployment in the most promising and productive sectors of the economy.The subject of the research is timing anomalies in the Russian stock market in 2012–2018. The relevance of the research is due to the information inefficiency of the Russian stock market and its imperfections leading to significant price deviations from the «fair» value of assets and depriving investors of the opportunity to form various strategies for deriving additional revenues not related to fundamental economic factors and objective processes occurring in the global and local economies and the economy of an individual business entity. Based on the trend analysis of the Broad Market USD Index (RUBMI), the paper demonstrates a methodology for simulating the analysis of price anomalies on large arrays of real data using statistical data processing methods and modern information technologies. The paper concludes that though the Russian stock market lacks even the weak form of efficiency, such well-known timing anomalies as the “day-of-the-week” effect and the “month” effect have not been observed in the recent years. Therefore, investors could not use these anomalies to derive regular revenues above the market average.

Interim Reporting Frequency and the Mispricing of Accruals

2018 ◽  
Vol 32 (3) ◽  
pp. 29-47
Author(s):  
Shou-Min Tsao ◽  
Hsueh-Tien Lu ◽  
Edmund C. Keung
Keyword(s):  
Financial Reporting ◽  
Stock Prices ◽  
Data Availability ◽  
Financial Reports ◽  
Regulatory Changes ◽  
Sample Composition ◽  
Reporting Frequency ◽  
Over Time ◽  
Jel Classifications ◽  
Accrual Mispricing

SYNOPSIS This study examines the association between mandatory financial reporting frequency and the accrual anomaly. Based on regulatory changes in reporting frequency requirements in Taiwan, we divide our sample period into three reporting regimes: a semiannual reporting regime from 1982 to 1985, a quarterly reporting regime from 1986 to 1987, and a monthly reporting regime (both quarterly financial reports and monthly revenue disclosure) from 1988 to 1993. We find that although both switches (from the semiannual reporting regime to the quarterly reporting regime and from the quarterly reporting regime to the monthly reporting regime) hasten the dissemination of the information contained in annual accruals into stock prices and reduce annual accrual mispricing, the switch to monthly reporting has a lesser effect. Our results are robust to controlling for risk factors, transaction costs, and potential changes in accrual, cash flow persistence, and sample composition over time. These results imply that more frequent reporting is one possible mechanism to reduce accrual mispricing. JEL Classifications: G14; L51; M41; M48. Data Availability: Data are available from sources identified in the paper.

Capital Market Consequences of Audit Office Size: Evidence from Stock Price Crash Risk

2020 ◽  
Vol 39 (2) ◽  
pp. 1-26
Author(s):  
Jeffrey L. Callen ◽  
Xiaohua Fang ◽  
Baohua Xin ◽  
Wenjun Zhang
Keyword(s):  
Capital Market ◽  
Stock Price ◽  
Bad News ◽  
Crash Risk ◽  
Public Firms ◽  
Big 4 ◽  
Empirical Tests ◽  
Office Size ◽  
Market Consequences ◽  
Robust Evidence

SUMMARY This study examines the association between the office size of engagement auditors and their clients' future stock price crash risk, a consequence of managerial bad news hoarding. Using a sample of U.S. public firms with Big 4 auditors, we find robust evidence that local audit office size is significantly and negatively related to future stock price crash risk. The evidence is consistent with the view that large audit offices effectively detect and deter bad news hoarding activities in comparison with their smaller counterparts. We further explore two possible explanations for these findings, the Auditor Incentive Channel and the Auditor Competency Channel. Our empirical tests offer support for both channels. JEL Classifications: G12; G34; M49.

scholarly journals Reliability of Financial Information from the Perspective of Benford’s Law

Entropy ◽  
2021 ◽  
Vol 23 (5) ◽  
pp. 557
Author(s):  
Ionel Jianu ◽  
Iulia Jianu
Keyword(s):  
Financial Reporting ◽  
Capital Market ◽  
Financial Statements ◽  
Financial Information ◽  
Benford’S Law ◽  
Professional Judgment ◽  
Reporting Standards ◽  
Financial Reporting Standards ◽  
Benford's Law ◽  
Before And After

This study investigates the conformity to Benford’s Law of the information disclosed in financial statements. Using the first digit test of Benford’s Law, the study analyses the reliability of financial information provided by listed companies on an emerging capital market before and after the implementation of International Financial Reporting Standards (IFRS). The results of the study confirm the increase of reliability on the information disclosed in the financial statements after IFRS implementation. The study contributes to the existing literature by bringing new insights into the types of financial information that do not comply with Benford’s Law such as the amounts determined by estimates or by applying professional judgment.

scholarly journals Rethinking Non-Financial Reporting: A Blueprint for Structural Regulatory Changes

2020 ◽  
Vol 10 (2) ◽  
Author(s):  
David Monciardini ◽  
Jukka Tapio Mähönen ◽  
Georgina Tsagas
Keyword(s):  
Financial Reporting ◽  
Final Section ◽  
Thematic Issue ◽  
Revision Process ◽  
The Past ◽  
Regulatory Changes ◽  
Collective Effort ◽  
Key Points ◽  
Structural Failures ◽  
Over Time

AbstractThe article introduces the thematic issue of Accounting, Economics, and Law: A Convivium dedicated to the regulation of non-financial reporting. It provides the reader with an overview of the varying approaches and frameworks that have emerged over time in relation to the reporting of non-financial information. In particular, the article focuses on the European Non-Financial Reporting Directive. We maintain that to date this latter initiative has failed to deliver on its intended objectives. In the context of the ongoing revision process of this initiative, the present paper outlines five key areas to be improved drawing on the lessons learnt from the past as well as from key points raised by the papers in the present thematic issue. What emerges from this collective effort is a renewed agenda that highlights some of the structural failures of the current reporting regime and a blueprint for future reforms. The final section summarises the various contributions of articles included in this thematic issue.

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