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.

scholarly journals THE IMPACT OF BIG DATA ANALYTICS ON IMPROVING FINANCIAL REPORTING QUALITY

2020 ◽  
Vol 4 (03) ◽  
Author(s):  
Nagat Mohamed Marie Younis
Keyword(s):  
Big Data ◽  
Financial Reporting ◽  
Data Analytics ◽  
Information Quality ◽  
Accounting Information ◽  
Big Data Analytics ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Accounting Information Quality ◽  
The Impact

Purpose – The current study aims to clarify the importance of big data analytics and its role in changing the accounting profession and the roles of accountants, in addition to testing the impact of big data analytics on improving financial reporting quality in the Saudi environment. Design/ methodology/ approach – To achieve the study's goals and validate hypotheses, relevant previous literature and research are referred. Also, a field study is conducted by distributing a questionnaire of (154) individual academics, financial analysts, accountants, and experts in the field of analyzing big data in the Kingdom of Saudi in 2019. Data are analyzed by using the program of Statistical Package for Social Science (SPSS 17.0). Findings – The study concluded that although business organizations face several challenges when analyzing data, big data analytics has a significant role in achieving high competitiveness for institutions, improving the accounting information quality, providing appropriate information that helps in rationalizing decisions within the economic unit, and providing future information affecting stakeholder's decisions. The study also has proved that there is a statistically significant effect of big data analytics on improving the quality of accounting information, as big data analytics clearly affects the characteristics of the accounting information quality, positively affecting the quality of financial reports. Originality/ Value – Originality/ Value – The analytics of big data is one of the most important topics where it positively affects the improvement of accounting information quality, which reflects on financial reporting quality. Hence, academics and institutions should pay attention to this topic and follow their new ideas. The present study is one of the first studies that deal with this topic and examine the relationship between big data analytics and the characteristics of accounting information which positively affecting financial reporting quality.

Do globalisation and adoption of IFRS by banks in Africa lead to less earnings management?

2019 ◽  
Vol 17 (2) ◽  
pp. 222-248 ◽  
Author(s):  
Mohammed Amidu ◽  
Haruna Issahaku
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Information Quality ◽  
Accounting Information ◽  
Financial Statements ◽  
International Standards ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Accounting Information Quality ◽  
National Economies

Purpose This paper aims to analyse the implications of globalisation and the adoption of international standards (International Financial Reporting Standards [IFRS]) for accounting information quality. Design/methodology/approach This paper uses a sample of 329 banks across 29 countries leading up to and beyond the implementation of IFRS to test for related hypotheses. Findings First, banks’ financial statements are prepared on the basis of international standards as national economies are integrated when social norms are diffused. Building on these results, the second test suggests that the relatively high-quality earnings among banks in Africa during the period is attributable to the adoption of and interaction of IFRS with globalisation and the strategy of banks to diversify within and across interest and non-interest income. Originality/value The authors investigate how globalisation and the adoption of IFRS affect accounting information quality.

Family ownership and financial reporting quality: Iranian evidence

2018 ◽  
Vol 8 (3) ◽  
pp. 339-356 ◽  
Author(s):  
Mahmoud Mousavi Shiri ◽  
Mahdi Salehi ◽  
Fatemeh Abbasi ◽  
Shayan Farhangdoust
Keyword(s):  
Financial Reporting ◽  
Family Firms ◽  
Stock Exchange ◽  
Accounting Information ◽  
Reporting Quality ◽  
Audit Fees ◽  
Financial Reporting Quality ◽  
Family Ownership ◽  
Content Type

PurposeIn the process of reporting accounting information, the auditor’s objective is to detect possible misstatements and errors in accounting information. Audit evidence aids auditors in providing reasonable assurance about the quality of financial reporting. Studying the quality of family firms’ financial reporting is of higher importance relative to non-family firms due to lower risk of accounting manipulation. Therefore, the purpose of this paper is to examine the relationship between family ownership structure and financial reporting quality from an auditing perspective.Design/methodology/approachTo analyze the research hypotheses, the authors use a sample data consisted of 221 companies listed on the Tehran Stock Exchange (including 52 family and 169 non-family firms) over a five-year span from 2011 to 2015.FindingsUsing multivariate regression analysis of panel data, our results indicate that audit risk in family firms is lower than their counterparts. Likewise, the findings are indicative of lower audit fees paid by family firms as compared to non-family ones. The authors also find that auditors put more effort in family firms and thus audit effort is more significant for these kinds of firms.Originality/valueThe study focuses on family ownership and financial reporting quality in a developing country like Iran and the results of the study may be beneficial to other developing nations, as Iran stock market possesses some unique features which are not normally prevailing in other equity markets, even in the Middle East.

Do sin firms engage in real activities manipulation to meet earnings benchmarks?

2020 ◽  
Vol 28 (3) ◽  
pp. 535-551
Author(s):  
Suzanne M. Ogilby ◽  
Xinmei Xie ◽  
Yan Xiong ◽  
Jin Zhang
Keyword(s):  
Financial Reporting ◽  
Earnings Quality ◽  
Abnormal Returns ◽  
Reporting Quality ◽  
Production Costs ◽  
Financial Statement ◽  
Financial Reporting Quality ◽  
Content Type ◽  
Earnings Benchmarks ◽  
Real Activities Manipulation

Purpose Recent literature suggests that sin firms (firms in tobacco, gambling and alcohol industries) have lower institutional ownership, fewer analysts following, higher abnormal returns and higher financial reporting quality. This study aims to investigate empirically how sin firms engage in real activities manipulation (RAM) to meet earnings benchmarks in comparison to non-sin firms. Design/methodology/approach The authors examine two types of RAM, namely, Cutting discretionary expenditures including research and development (R&D), SG&A and advertising to boost earnings. Extending deep discount or lenient credit terms to boost sales and/or overproducing to decrease COGS to increase gross profit. Consistent with Roychowdhury (2006), the authors use abnormal discretionary expenditures as the proxy for expenditure reduction manipulation and abnormal production costs as the proxy for COGS manipulation. Findings The results for the abnormal discretionary expense model suggest that sin firms do not engage in RAM of advertising, R&D, SG&A expense to just meet earnings benchmarks. The results for the production costs model suggest that sin firms do not engage in COGS manipulation to just meet earnings benchmarks. The results are robust after controlling accrual-based earnings management (AEM). Overall, in this setting, these results suggest that managers of sin firms engage less in RAM to meet earnings benchmarks. Originality/value The findings are of interest to investors, auditors, regulators and academics with respect to financial statement analysis and earnings quality.

scholarly journals Relationship between the application of IFRS and the accounting information quality in Jordan

2020 ◽  
Vol 17 (4) ◽  
pp. 111-120
Author(s):  
Qasim Ahmad Alawaqleh
Keyword(s):  
Financial Reporting ◽  
Trading Volume ◽  
Information Quality ◽  
Stock Exchange ◽  
Accounting Information ◽  
Financial Reporting Standards ◽  
Industrial Companies ◽  
Accounting Information Quality ◽  
Independent Variable ◽  
The Relationship

The study aimed to find out the relationship between the application of international financial reporting standards (IFRS) and the accounting information quality (AIQ) in Jordan. The research data was collected from 59 industrial companies listed on the Amman Stock Exchange (ASE) between 2010 and 2018. Panel data was used to measure an independent variable (the application of IFRS), and a questionnaire (a 5-point Likert scale) was applied to measure a dependent variable (AIQ). Multiple regression was used to test hypotheses. The study concluded that the application of IFRS in terms of earnings management and trading volume had a positive relationship with AIQ. Finally, the study recommended validating the transparency of financial reporting to improve the efficiency of the Jordanian financial market.

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 The Qualitative Characteristics of Accounting Information, Earnings Quality, and Islamic Banking Performance: Evidence from the Gulf Banking Sector

2020 ◽  
Vol 8 (2) ◽  
pp. 30
Author(s):  
Ibrahim Elsiddig Ahmed
Keyword(s):  
Financial Reporting ◽  
Positive Relationship ◽  
Banking Sector ◽  
Earnings Quality ◽  
Negative Relationship ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Annual Reports ◽  
Significant Positive Relationship ◽  
Qualitative Characteristics

The study aims to operationalize financial reporting quality in terms of the qualitative characteristics (QCs) as stated by the Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI) standards, as well as to investigate their association with earnings quality (EQ) and banking performance. The study uses secondary data extracted from DataStream to operationalize and measure the financial reporting quality in the annual reports of 25 out of the 27 Islamic banks in the Gulf Council Countries (GCC) for a 5-year period (2014–2018), meaning 125 annual reports were used. The study applies a manual content analysis to the annual reports to score all the items of QCs and operationalizes 25 measurement items that represent the six QCs. All items use 5-point Likert-type scales to compute the sub-score and the overall index through the Neural Network System. The findings of the model paths show a significant positive relationship between EQ and most of the QCs. The first hypothesis is partially accepted as there is a positive relationship between EQ and relevancy, reliability, prudence and general quality; however, there is no significant relationship between EQ and understandability and there is a significant negative relationship between EQ and comparability. Moreover, the study finds a significant positive relationship between EQ and ROA on one hand and EQ and ROE on the other hand (p-value = 0.00), meaning the second hypothesis is supported.

scholarly journals INFLUENCE OF MANAGERIAL ABILITY ON FINANCIAL REPORTING QUALITY: EVIDENCE FROM NIGERIAN LISTED NON-FINANCIAL FIRMS

2020 ◽  
Vol 2 ◽  
pp. 25-40
Author(s):  
Aderemi Olalere Adebayo
Keyword(s):  
Financial Reporting ◽  
Accounting Information ◽  
Secondary Data ◽  
Reporting Quality ◽  
Income Smoothing ◽  
Financial Reporting Quality ◽  
Managerial Ability ◽  
Financial Report ◽  
Financial Firms

Users of accounting information crave of quality financial reporting, by emphasising on the quality of the auditors neglecting the attribute of the managers. This study investigates the influence of managerial abilities on financial reporting in Nigerian listed non-financial sectors. The time series research design was employed by selecting 40 non-financial institutions as sample size between 2010 and 2017. Secondary data obtained from the financial report were analysed using correlation and logistic regression. It was found that managerial ability has an inverse relationship on financial reporting quality, which is consistent with the agency theory. The finding implied that managers employ their ability to income smoothing for the benefit of the organisation rather than the interest of the shareholders.

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