Financial Reporting Comparability and Accounting-Based Relative Performance Evaluation in the Design of CEO Cash Compensation Contracts

2019 ◽  
Vol 95 (3) ◽  
pp. 343-370 ◽  
Author(s):  
Jonathan Nam
Keyword(s):  
Financial Reporting ◽  
Compensation Contracts ◽  
Accounting Performance ◽  
Reporting Practices ◽  
Relative Evaluation ◽  
Cash Compensation ◽  
Reporting Systems ◽  
Peer Firms ◽  
Performance Benchmark ◽  
Financial Reporting Comparability

ABSTRACT This study examines how cross-firm differences in financial reporting practices affect how peer-firm accounting information is used to evaluate CEO performance. I propose that efficient relative evaluation using accounting performance requires peer firms to have comparable financial reporting systems, allowing boards to reduce the information processing costs associated with differences in firms' financial reporting practices. Supporting this view, when peer selection takes financial reporting comparability into account, I find evidence that the earnings of peer firms with high financial reporting comparability serve as a performance benchmark for determining CEOs' cash compensation. My paper empirically corroborates the substantial anecdotal evidence of the use of peer firms' accounting performance as a significant element in boards' evaluation of CEO performance. JEL Classifications: D8; G3; J33; M41.

scholarly journals Intellectual capital reporting

2008 ◽  
Vol 54 (No. 2) ◽  
pp. 57-62 ◽  
Author(s):  
I. Tichá
Keyword(s):  
Financial Reporting ◽  
Intellectual Capital ◽  
Information Needs ◽  
Reporting System ◽  
Business Leaders ◽  
Reporting Practices ◽  
Reporting Practice ◽  
Reporting Systems ◽  
Pros And Cons ◽  
Information Basis

The changing context within which businesses today compete requires deployment of intangible assets in order to achieve competitive position on the market. The growing importance of intellectual capital has been challenging the traditional financial reporting system, which is not capable to meet the information needs any more. The article provides an overview of various intellectual capital reporting systems and highlights their key concerns. The selected list of intellectual capital reporting practices serves as an information basis for business leaders to raise the awareness, to consider pros and cons of intellectual capital reporting and to facilitate a broader acceptance of a new reporting practice.

Artificial Intelligence Applications in Accounting and Financial Reporting Systems

2021 ◽  
pp. 540-558
Author(s):  
Akeel Hamza Almagtome
Keyword(s):  
Artificial Intelligence ◽  
Financial Reporting ◽  
Accounting Systems ◽  
Accounting Data ◽  
Reporting Practices ◽  
Economic Decisions ◽  
Reporting Systems ◽  
Effective Use ◽  
The Impact ◽  
Competitive Economy

In light of globalization and the competitive economy, it became necessary for investors being ready to evaluate the accounting data necessary to make economic decisions that contribute to the development of their businesses. Nevertheless, many consumers of accounting information are still unable to make effective use of the accounting data presented in the financial statements. The chapter will therefore discuss innovative ideas that can allow investors and other stakeholders to understand and use accounting data in the light of best AI applications. It provides an overview of the impact of artificial intelligence on accounting and reporting practices. The chapter also discusses the latest developments in the field of artificial intelligence (AI) technology and their implementation in the context of global accounting practices, including accounting systems, financial reporting systems, and auditing.

scholarly journals The Impact of CSR on the Capital Structure of High-Tech Companies in Poland

2021 ◽  
Vol 13 (10) ◽  
pp. 5467
Author(s):  
Barbara Grabinska ◽  
Dorota Kedzior ◽  
Marcin Kedzior ◽  
Konrad Grabinski
Keyword(s):  
Capital Structure ◽  
Financial Reporting ◽  
Academic Research ◽  
Debt Financing ◽  
High Tech ◽  
High Tech Industry ◽  
Reporting Practices ◽  
Csr Reporting ◽  
The Impact ◽  
The Capital Structure

So far, CSR’s role in the high-tech industry is not fully explained by academic research, especially concerning the most burdensome obstacle to firms’ growth: acquiring debt financing. The paper aims to solve this puzzle and investigate whether young high-tech companies can attract more debt by engaging in CSR activity. To address the high-tech industry specificity, we divided CSR-reporting practice into three broad categories: employee, social, and environmental and analyzed their impact on the capital structure. Our sample consists of 92 firm-year observations covering the period 2014–2018. Using a regression method, we found out that only employee CSR plays a statistically significant role in shaping capital structure. We did not find evidence for the influence of the other types of CSR-reporting practices. The results suggest that employees are the key resource of high-tech companies, and, for this reason, they are at the management’s focus. This fact is visible at the financial reporting level and, as we interpret results, is also considered by credit providers. In a more general way, our results suggest that firms tend to choose CSR based on the importance of crucial resources.

Financial Reporting Practices in France

1976 ◽  
Vol 32 (1) ◽  
pp. 39-49 ◽  
Author(s):  
M. Edgar Barrett ◽  
Jean-Louis Roy
Keyword(s):  
Financial Reporting ◽  
Reporting Practices

Auditor Appointment Strategy and Intragroup Value Transfers: Evidence From Family Business Groups

2021 ◽  
pp. 0148558X2199265
Author(s):  
Yan-Leung Cheung ◽  
In-Mu Haw ◽  
Weiqiang Tan ◽  
Wenming Wang
Keyword(s):  
Adverse Effect ◽  
Financial Reporting ◽  
Family Business ◽  
Business Groups ◽  
Divide And Conquer ◽  
Alternative Measure ◽  
Family Business Groups ◽  
Audit Effectiveness ◽  
Financial Reporting Comparability

Family business groups (FBGs) typically control several member firms and can hire a single auditor or multiple auditors to audit their member firms. This article examines what type of auditor appointment strategy constrains intragroup value transfers within FBGs. Analyzing related-party transactions (RPTs) within FBGs in Hong Kong, this study provides evidence that FBGs with multiple auditors undertake more intragroup value transfers than FBGs with a single auditor. However, the adverse effect of multiple-auditor appointments is mitigated by a stronger board and higher financial reporting comparability among member firms. Using an alternative measure of intragroup value transfers, we also find that the market perceives multiple-auditor appointments as impairing audit effectiveness. Overall, our findings offer the new insight that controlling families can exploit the appointment of multiple auditors as a “divide and conquer” strategy which undermines the monitoring role of auditors against intragroup value transfers, but stronger corporate governance of member firms can mitigate the adverse effect.

scholarly journals IFRS adoption and CEO compensation: evidence from listed banks in Nigeria

2019 ◽  
Vol 14 (3) ◽  
pp. 1-8 ◽  
Author(s):  
Stephen Ojeka ◽  
Alex Adegboye ◽  
Dorcas Titilayo Adetula ◽  
Kofo Adegboye ◽  
Inemesit Udoh
Keyword(s):  
Financial Reporting ◽  
Ceo Compensation ◽  
Panel Data Analysis ◽  
Fixed Effect Model ◽  
Positive Influence ◽  
Performance Measure ◽  
Governance Mechanism ◽  
Accounting Performance ◽  
Ifrs Adoption ◽  
Ceo Pay

The study investigates the influence of International Financial Reporting Standards adoption, using accounting performance measure, to determine the CEO pay in listed banks in Nigeria. The audited annual financial statements of listed banks in Nigeria covering the period of 2009–2015 are analyzed. Fixed effect model, viz panel data analysis is adopted to establish the findings. The findings indicate that adoption of IFRS in Nigeria results in an inverse relationship with accounting performance in determining the CEO compensation after controlling for firm and corporate governance mechanism. However, the adoption of IFRS shows significant positive influence on the CEO pay. This result has policy implication, which encourages the regulatory agencies like Central Bank of Nigeria to monitor the compliance of all banks in Nigeria to the IFRS adoption.

scholarly journals Coverage Of Ethics In The Undergraduate AIS Course(s)

1999 ◽  
Vol 3 (4) ◽  
pp. 27-40
Author(s):  
Peter M. Theuri ◽  
Leslie D. Turner
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Faculty Perceptions ◽  
Financial Accounting ◽  
Reporting Systems

The potential for misuse of information due to proliferation of information technolo-gies and reduced control over information makes the inclusion of ethics in the AIS course extremely important. This study provides information about faculty perceptions on the importance of incorporating ethics in the AIS course(s). Results show that faculty rate internal control issues and financial reporting systems topics in the AIS course as most relevant topics for incorporating ethics. The results also show that respondents perceive the auditing course as most important in covering ethics with AIS ranked fourth after auditing, tax, and financial accounting. Additionally, about 34% of AIS faculty do not currently incorporate ethics in their AIS course. These results point to a need for increased awareness of the importance of incorporating ethics in the AIS course(s). Faculty limitations in covering ethics are also presented.

scholarly journals Financial Disclosure and Budgetary Practices of Religious Organization: A Study of Qaryah Mosques in Kuala Terengganu

2015 ◽  
Vol 17 (1) ◽  
pp. 83
Author(s):  
Shahida Bt Shaharuddin ◽  
Maliah Bt Sulaiman
Keyword(s):  
Financial Reporting ◽  
Mixed Method ◽  
Financial Management ◽  
Peninsular Malaysia ◽  
Financial Accounting ◽  
Financial Disclosure ◽  
Religious Organization ◽  
Structured Interviews ◽  
Reporting Practices ◽  
Budgetary Control

This paper aims to examine the financial reporting and budgeting practices of qaryah mosques in Kuala Terengganu, a state in the east of Peninsular Malaysia. Data was collected using a mixed method (quantitative and qualitative) approach. The questionnaire was disseminated to qaryah mosques in Kuala Terengganu and 39 responded. To address the limitations of a questionnaire survey, semi-structured interviews were then conducted with a few of the respondents. The results revealed that qaryah mosques in Kuala Terengganu do have a satisfactory system in place in terms of their financial reporting practices. However, budgetary control practices appear to be lacking. This indicates accounting, as is practiced by qaryah mosques in Kuala Terengganu appears to be limited to financial accounting. Hence, the financial management in qaryah mosques needs to be improved so that the risk of embezzlement can be reduced.

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