Disclosure Quality of Goodwill Impairment Testing: A Disclosure Index

2012 ◽  
pp. 5-30 ◽  
Author(s):  
Khairil Faizal Khairi ◽  
Nur Hidayah Laili ◽  
Dung Manh Tran
Keyword(s):  
Annual Reports ◽  
Mandatory Disclosure ◽  
Disclosure Quality ◽  
Quality Of Information ◽  
Listed Firms ◽  
Goodwill Impairment ◽  
Weighted Index ◽  
Disclosure Requirements ◽  
Compliance Level

This study sets out to offer proof of several important questions relating to the quality of information disclosed on goodwill impairment process under the new requirements of FRS 36. This study investigates the compliance level and disclosure quality of FRS 36 by top 20 of Singaporean listed firms in SGX at 2007 based on their market capitalization. In order to achieve the objective of this study, the weight- ed index is chosen because this index is able to differentiate the quality and impor- tance of each mandatory disclosure under FRS 36. The weighted index was developed by constructing a disclosure scoring sheet, obtaining annual reports of 20 sampled Singapore firms for particular year, complet- ing scoring sheet for each firms by assigned weighted for the disclosure items and calculating disclosure weighted index. The weighted index was analyzed to examine the firm’s compliance with the FRS 36 disclosure requirements. The results of this study revealed that 18 out of 20 (90%) firms in Singapore failed to comply with the most basic elements of the FRS 36 pertaining to goodwill impairment testing espe- cially in allocating goodwill into the CGUs and key assumptions used in determin- ing the recoverable amount of CGU assets.

Impact of Adopting IFRS in Ghana

2016 ◽  
pp. 191-230
Author(s):  
Ben K. Agyei-Mensah
Keyword(s):  
Internal Control ◽  
Financial Information ◽  
Annual Reports ◽  
Disclosure Quality ◽  
Accounting Disclosure ◽  
Financial Reports ◽  
Listed Firms ◽  
Control Information ◽  
Forward Looking

This chapter reports on the impact of the adoption of IFRS in Ghana. It first traced the history of accounting standards in Ghana and the reason for the adoption of IFRS in 2007. One of the key issues that IFRS talk about is the disclosure of financial and non financial information in corporate financial reports. Hence this chapter provides evidence on the extent of disclosures, the quality of the disclosures and the determinants of the disclosures. The disclosure of financial ratios, forward-looking information and internal control information in corporate annual reports were extensively studied and findings reported in this chapter. The results of the quality of financial information disclosure mean of 76.80% (pre adoption) and 87.09% (post adoption) for the two years indicate that the quality of financial reports has improved significantly after adopting IFRSs. The findings thus confirms that the implementation of IFRSs generally reinforce accounting disclosure quality. However, the low levels of other disclosures (accounting ratio disclosure quality 6.64%, level of disclosure 60%; forward looking information 35%; internal control information 42%) by listed firms in Ghana do not support signaling theory which suggests that firms with good performance will wish to signal their quality to investors, hence are more likely to disclose their performance by disclosing more voluntary information. It is therefore important for the SEC and The Ghana Stock Exchange to do more by enforcing adherence to the corporate code of corporate governance.

Responding to “Discrediting” Events: Annual Report Disclosure Responses to Environmental Fines

2002 ◽  
Vol 2 (1) ◽  
pp. 22-40 ◽  
Author(s):  
Hussein Warsame ◽  
Cynthia V. Simmons ◽  
Dean Neu
Keyword(s):  
Impression Management ◽  
Annual Report ◽  
Annual Reports ◽  
Matched Pair ◽  
Disclosure Quality ◽  
Publicly Traded ◽  
Environmental Disclosure ◽  
Environmental Disclosures ◽  
Disclosure Responses

In this study we consider how a discrediting event such as an environmental fine influences the quality of environmental disclosures in subsequent annual reports. Starting from prior work in the areas of impression management along with environmental and social responsibility disclosures, we propose that environmental disclosures provide organizations with a method of “managing” such discrediting events. Using a matched-pair sample of publicly traded Canadian companies that have been subject to environmental fines and those that have not; we analyze changes in pre-fine and post-fine environmental disclosure quality. After controlling for firm-specific characteristics, the provided results are consistent with this explanation.

scholarly journals The Timing of Goodwill Write-off: Cases of Initial Overpayment

2016 ◽  
Vol 9 (11) ◽  
pp. 65
Author(s):  
Jamaliah Abdul Majid ◽  
Robiah Abu Bakar ◽  
Nor Asma Lode
Keyword(s):  
Annual Reports ◽  
Accounting Choice ◽  
Business Combinations ◽  
Listed Firms ◽  
Goodwill Impairment ◽  
Depth Analysis ◽  
The Future ◽  
Choice Literature ◽  
Acquisition Price

<p>This paper explores types of accounting choice related to reporting goodwill impairment losses, if any, exercised by Malaysian listed firms after an implementation of IFRS 3. The study is carried out through an in-depth analysis of annual reports for fifteen firms over a number of years. The fifteen firms selected are those that have goodwill arising from business combinations in December 2006/7, reported goodwill impairment losses in the current year or the future year(s), and the goodwill represents 50% or more of the acquisition price. Results show that of the fifteen firms examined, eight firms appeared to exercise the accounting choice in the form of opportunistic timing in reporting the impairment losses. The study contributes to the accounting choice literature by providing evidence on the timing of goodwill impairment losses for goodwill that arose from an apparent overpayment made at the time of an acquisition of a subsidiary.</p>

Mandatory Preliminary Performance Reports: Evidence from China

2015 ◽  
Vol 15 (1) ◽  
pp. 67-88
Author(s):  
Yunling Song ◽  
Ling Zhou
Keyword(s):  
Market Reaction ◽  
Stock Exchange ◽  
Annual Reports ◽  
Mandatory Disclosure ◽  
Negative Consequences ◽  
High Quality ◽  
Disclosure Requirements ◽  
Small And Medium Enterprise ◽  
Medium Enterprise ◽  
Performance Reports

ABSTRACT Companies listed on China's Shenzhen Stock Exchange Small and Medium Enterprise Board are required to release preliminary performance reports before the end of February if they cannot file annual reports by that time. Although this mandate might improve the timeliness of information, we find that such preliminary releases are inaccurate and optimistic, potentially misleading investors. Sixteen percent of preliminary reports contain significant inaccuracies (i.e., when actual numbers deviate from preliminary ones by at least 10 percent). Firms in earlier stages of the auditing process, as well as those with low-quality preliminary reports in prior years, poorer performance, greater accounting complexity, and fewer resources, are more likely to issue low-quality preliminary performance reports. Market reaction tests indicate that investors consider preliminary releases to be informative and generally cannot differentiate between high-quality and low-quality preliminary releases. Moreover, when annual reports are filed, investors are surprised by the differences between the annual reports and the preliminary reports. Thus, our paper demonstrates that mandatory disclosure requirements may have unintended negative consequences.

scholarly journals Corporate Governance, Disclosure Quality, and Cost of Equity: Evidence from Pakistan

2018 ◽  
Vol 6 (2) ◽  
pp. 63-91 ◽  
Author(s):  
Safia Nosheen ◽  
Naveed-Ul-Haq Naveed-Ul-Haq ◽  
Muhammad Faisal Sajjad
Keyword(s):  
Corporate Governance ◽  
Audit Quality ◽  
Financial Statements ◽  
Ordinary Least Squares ◽  
Cost Of Equity ◽  
Disclosure Quality ◽  
Listed Firms ◽  
The Cost ◽  
Governance Disclosure

The link between disclosure of corporate information and the cost of equity in firms is one of the most important issues in finance. This paper aims to examine the connection between corporate governance, disclosure quality of information, and the cost of equity in Pakistani-listed (PSX-listed) firms. Using the Generalized Methods of Movements (Sys-GMM) model, a sample of 167 non-financial firms listed on Pakistan Stock Exchange (PSX) for the period of 2011-2015was analyzed. Sys-GMM estimation was applied to overcome the problem of endogeneity among corporate governance variables. To test the robustness of GMM estimations, we compared the results of pooled ordinary least squares (OLS) and fixed-effect estimations and found they did not overcome the problem of endogeneity, providing spurious results. We found a negative association between cost of equity and disclosure quality of financial statements. The findings suggested that the board size, concentrated ownership and CEO duality, are found as significant factors in reducing the cost of equity of PSX-listed firms. Audit committee independence and audit quality of the firm showed a positive relationship with the firm’s cost of equity. Our findings suggest that employing a high-quality auditor and independent director’s results in increased cost of equity for PSX-listed firms. Furthermore, no significant relationship between independence of the boards and duration of the authorizations of financial statements by the board of directors is found. The results also revealed the investors demand more return on their investments if inadequate and incomplete information is disclosed in the annual reports of the firms. This study provides useful insights for Pakistani corporate governance regulators, the executive management of Pakistani firms, and their investors.

scholarly journals AUDIT COMMITTEE INDEPENDENCE AND A CONTRACTING PERSPECTIVE ON GOODWILL IMPAIRMENT: SINGAPOREAN EVIDENCE

2017 ◽  
Vol 18 (0) ◽  
pp. 128-135 ◽  
Author(s):  
Jamaliah Abdul Majid
Keyword(s):  
Policy Implication ◽  
Audit Committee ◽  
Financial Statements ◽  
Debt Covenants ◽  
Listed Firms ◽  
Goodwill Impairment ◽  
Factors Influencing ◽  
Reporting Incentives ◽  
Logistic Regressions

This study examines factors influencing and constraining the decision to recognize zero goodwill impairment in a sample of 52 Singaporean listed firms from 2010–2012. Using binary logistic regressions, the results reveal that firms that are approaching violation of their debt covenants have a higher likelihood of exercising the recognition choice, while a higher proportion of audit committee independence constrains this choice. The policy implication of this study is that to improve the quality of the financial statements, the relevant authorities need to monitor firms’ reporting incentives closely. This study contributes to the literature on IFRS by providing evidence that supports the applicability of the debt hypothesis in explaining the decision of Singaporean listed firms to recognize zero goodwill impairment.

scholarly journals The effect of executive compensation on earnings quality of conglomerates listed in Nigeria

2020 ◽  
Vol 3 (2) ◽  
pp. 6-18
Author(s):  
Abubakar Yayangida ◽  
◽  
Agbi Samuel ◽  
Joshua Okpanachi ◽  
Victor Atabo ◽  
...  
Keyword(s):  
Earnings Management ◽  
Executive Compensation ◽  
Key Words ◽  
Earnings Quality ◽  
Annual Reports ◽  
Listed Firms ◽  
Executive Incentives ◽  
Multiple Regression Technique ◽  
The Impact

This paper is an empirical analysis of the impact of Executive compensation on earnings quality of listed firms in Nigeria for the period of 2015-2019. The study adopts the multiple regression technique. Data were collected from the annual reports and accounts of sampled firms. The findings reveal that Executive compensation positively and significantly affect the earnings quality of listed Conglomerates in Nigeria, the result implies that firms that pay higher emoluments to its executive are likely to improve the quality of earnings. It is recommended that the listed Conglomerates firms should increase the amount paid as emoluments to their executives as the higher emolument paid and received by executives improve the level of earnings quality and reduces earnings management which may be detrimental to the goal and objectives of the firm. Key words: Compensation, Conglomerates, Executive, Incentives, Performance, Shareholders

Methodology for Assessing the Disclosure Quality of Corporate Social and Environmental Responsibility Information

2017 ◽  
Vol 2017 (2) ◽  
pp. 3-21
Author(s):  
Anastasiya Kornilova ◽  
Sergey Nikonorov
Keyword(s):  
Information Disclosure ◽  
Oil And Gas ◽  
Practical Significance ◽  
Annual Reports ◽  
The Arctic ◽  
Environmental Responsibility ◽  
Disclosure Quality ◽  
Corporate Social ◽  
Oil And Gas Companies

The subject of this study is corporate social and environmental responsibility. The object is the assessment of responsibility information disclosure quality based on the methodology developed by the authors and responsibility model. Analysis of the disclosure quality is based on data from public sources — annual nonfinancial reports of companies. This study shows examples of assessment methodology application for six Russian oil and gas companies — «Gazprom Neft», «Lukoil», «Rosneft», «Zarubezhneft», «Surgutneftegaz» and «Novatek» — based on their 2014 annual reports. The purpose of the research is to present a methodology for assessing the information disclosure quality in companies’ public sources of information about their social and environmental responsibility practices. The main results of the study is to present the methodology with practical examples of its use. The uniqueness of the study lies in the fact that the methodology is based on indicators of the Model of corporate social and environmental responsibility which is developed by the authors’. The practical significance of the study is determined by the possibility to apply the developed methodology for assessing the disclosure quality of social and environmental responsibility for companies from other sectors and based in other countries. Study the disclosure of social and environmental responsibility in the companies’ annual reports is part of a larger study of environmental and social responsibility of Russian oil and gas companies that have their projects in the Arctic region.

scholarly journals Corporate Governance Score and the Quality of Financial Disclosures: Evidence from the French Context

2016 ◽  
Vol 6 (2) ◽  
pp. 217
Author(s):  
Mondher Kouki ◽  
Bilel Ben Attia
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Research Paper ◽  
Financial Disclosure ◽  
Disclosure Quality ◽  
Listed Firms ◽  
Financial Disclosures

This research paper examines how corporate governance is related to the quality of financial disclosures for a sample of French listed firms during the period 2003-2009. We find that the level of financial reporting is positively influenced by corporate governance score. Managers and blockholders are more likely to disclose less information. These results are consistent with the belief that effective corporate governance is associated with higher financial disclosure quality while entrenched insiders do not improve this effect.    

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