scholarly journals How Do Investors Perceive the Materiality of Data Security Incidents

2021 ◽  
Vol 29 (6) ◽  
pp. 1-32
Author(s):  
Ahmad H. Juma'h ◽  
Yazan Alnsour
Keyword(s):  
Data Security ◽  
The United States ◽  
Event Analysis ◽  
Publicly Traded ◽  
Publicly Traded Companies ◽  
Data Breaches ◽  
Material Data ◽  
Confidential Data ◽  
Study Methodology ◽  
Security Incidents

Data security incidents are continually increasing; hackers, governments, and other actors increasingly attempt to gain unauthorized access to confidential data. Information Systems (IS) users are becoming more vulnerable to the risks of data breaches. Many stakeholders perceive cybersecurity incidents as indicators of firms' operational and technological internal deficiencies. Previous research has revealed that investors react negatively to data breaches, yet little is known about investors' reactions to material data security incidents. Using a sample of 232 data security incidents for 132 publicly traded companies in the United States, we applied an event study methodology to discern investors' reactions to material versus immaterial incidents. We also use multivariate regression and time-to-event analysis to examine what determines the degree of investors' reactions, considering several intervals around the event day. Our results show that investors perceive material data security incidents as a deficiency of breached companies in comparison to immaterial incidents.

scholarly journals How Do Investors Perceive the Materiality of Data Security Incidents

2021 ◽  
Vol 29 (6) ◽  
pp. 0-0
Keyword(s):  
Data Security ◽  
The United States ◽  
Event Analysis ◽  
Publicly Traded ◽  
Publicly Traded Companies ◽  
Data Breaches ◽  
Material Data ◽  
Confidential Data ◽  
Study Methodology ◽  
Security Incidents

Data security incidents are continually increasing; hackers, governments, and other actors increasingly attempt to gain unauthorized access to confidential data. Information Systems (IS) users are becoming more vulnerable to the risks of data breaches. Many stakeholders perceive cybersecurity incidents as indicators of firms' operational and technological internal deficiencies. Previous research has revealed that investors react negatively to data breaches, yet little is known about investors' reactions to material data security incidents. Using a sample of 232 data security incidents for 132 publicly traded companies in the United States, we applied an event study methodology to discern investors' reactions to material versus immaterial incidents. We also use multivariate regression and time-to-event analysis to examine what determines the degree of investors' reactions, considering several intervals around the event day. Our results show that investors perceive material data security incidents as a deficiency of breached companies in comparison to immaterial incidents.

scholarly journals A financial analysis of the interstate commerce commission (ICC) termination act of 1995 on the motor carrier industry

1999 ◽  
Vol 11 (1) ◽  
pp. 23-36
Author(s):  
Joe B Hanna ◽  
Robert A Kunkel ◽  
Gregory A Kuhlemeyer
Keyword(s):  
Financial Analysis ◽  
Past Research ◽  
The United States ◽  
Positive Trend ◽  
Interstate Commerce Commission ◽  
Publicly Traded ◽  
Motor Carrier ◽  
Interstate Commerce ◽  
Motor Carrier Industry ◽  
Study Methodology

Since the late 1970's the United States has progressively deregulated the motor carrier industry. Throughout the 1980's, deregulation was viewed as a positive trend by most industry practitioners. Past research has determined that, despite the fact that bankruptcies have increased since deregulation, the motor carrier industry has benefitted by less government intervention. The current study attempts to ascertain if motor carrier deregulation is still perceived positively in the mid-1990's. This research uses an event study methodology to examine the immediate financial impact of the ICC Termination Act of 1995 on 44 motor carrier industry participants. The results indicate deregulation is still perceived positively by shareholders as illustrated by the average publicly traded motor carrier benefittingby between $1.25 million and $6.1 million duringthe period surrounding termination of the Interstate Commerce Commission. In all likelihood, shareholders of companies in this industry benefitted due to the perception that industry deregulation leads to the ability to expand and pursue business opportunities previously restricted while operatingunder a more regulated regime.

scholarly journals Different disclosure activities and sophisticated investors

2020 ◽  
Vol 31 (82) ◽  
pp. 129-144
Author(s):  
Davi Jônatas Cunha Araújo ◽  
Jefferson Pereira de Andrade ◽  
Luiz Felipe de Araújo Pontes Girão
Keyword(s):  
United States ◽  
Institutional Investors ◽  
Voluntary Disclosure ◽  
Earnings Forecasts ◽  
The United States ◽  
Publicly Traded ◽  
Publicly Traded Companies ◽  
Discretionary Disclosure ◽  
The Subject ◽  
The Cost

ABSTRACT This article aims to verify what the influence is of different disclosure activities on the concentration of more sophisticated investors in Brazilian companies. The study fills a gap regarding the influence that disclosure activities can have on the concentration of sophisticated investors in Brazilian firms, considering that this may occur due to their ability to maximize the usefulness of the information disclosed and the return on investments, with a reduction in the cost of allocated funds. This subject is relevant because it verifies not the clientless effect of disclosure, presented by the only study previously developed on the subject in the United States (Kalay, 2015), but rather the influence that disclosure activities (earnings forecasts, market communications, and investor relations [IR]) have on the most sophisticated investors’ decisions to allocate funds in companies in the Brazilian market. As an impact on the area, it was noted that those companies that release market communications attract the investment of funds and the concentration of sophisticated investors much more than those that present better IR and release profit forecasts. We studied 89 publicly-traded companies whose reference forms were published in the period from 2011 to 2016. The number of institutional investors disclosed in the reference forms was used as a proxy to categorize them as more sophisticated. The different disclosure activities were represented by the disclosure of profit forecasts, the number of market communications, and the best IR. The best IR proxy was categorized using the companies awarded by IR Magazine Brazil that presented the best IR in the study period. The results of this study show that the most sophisticated investors concentrated in companies with better IR, in those that do not disclose profit forecasts, and in companies with a greater number of disclosed market communications. The disclosure of market communications is the disclosure activity that most influences the concentration of sophisticated investors in Brazilian companies that use more voluntary disclosure than discretionary disclosure to allocate their funds.

scholarly journals A Retrospective Look at the Sarbanes-Oxley Act of 2002- Has it accomplished its original purpose?

2015 ◽  
Vol 31 (2) ◽  
pp. 585 ◽  
Author(s):  
Anthony Basile ◽  
Sheila Handy ◽  
Felisha N. Fret
Keyword(s):  
The United States ◽  
Regulatory Agencies ◽  
United States Congress ◽  
Publicly Traded ◽  
Private Companies ◽  
Public Companies ◽  
Publicly Traded Companies ◽  
Sarbanes Oxley ◽  
Policies And Procedures ◽  
Internal Framework

As a result of notable frauds including Enron, WorldCom and Waste Management, the United States Congress enacted the Sarbanes-Oxley Act of 2002 (SOX). The Act would forever change the accounting profession. After a little more than a decade, publicly traded companies have been able to create and implement policies and procedures to ensure compliance with the Act, specifically the provisions set forth in Section 404. Since all public companies have implemented SOX compliance together with other regulations imposed by the Internal Revenue Service and other regulatory agencies into their normal reporting routines, management of these companies have realized further benefits associated with SOX compliance. Because of these reported benefits many private companies have begun to voluntarily implement SOX-like policies and procedures into their own internal framework. This paper will discuss the perceptions of the enactment and implementation of the Act, the associated benefits derived from SOX compliance and reasons why private companies have begun voluntarily adopting SOX-like policiesprocedures and strategies.

The Federalization of Corporate Governance

2018 ◽  
Author(s):  
Marc I. Steinberg
Keyword(s):  
Corporate Governance ◽  
Well Being ◽  
The United States ◽  
Company Law ◽  
Federal Law ◽  
Publicly Traded ◽  
Publicly Traded Companies ◽  
Evolution And Development ◽  
The Subject ◽  
Economic Well Being

This book focuses on a very timely subject: the federalization of corporate governance. From both historical and contemporary perspectives, the book addresses the federalization of corporate governance in the United States. Although the states traditionally have regulated the sphere of corporate governance—encompassing the relations among and between the subject corporation, its directors, its officers, its stockholders, and other stakeholders—federal law today impacts the governance of publicly-traded companies to a greater degree than ever before in U.S. history. This book thus focuses on the evolution and development of corporate governance from a federal law perspective from the commencement of the twentieth century to the present. The book examines the tension between state company law and federal law, historically analyzes the federal developments, explains the ramifications of the federal legislation enacted during the past two decades, and recommends corrective measures that should be implemented. The book accordingly provides an original, historical, and contemporary analysis of the federalization of corporate governance—a subject that impacts this country’s economic well-being in a very fundamental way.

Data breaches in hospitality: is the industry different?

2020 ◽  
Vol 11 (3) ◽  
pp. 511-527
Author(s):  
Kholekile Gwebu ◽  
Clayton W. Barrows
Keyword(s):  
Data Security ◽  
Hospitality Industry ◽  
Secondary Data ◽  
Data Breach ◽  
Content Type ◽  
Data Breaches ◽  
Hospitality Firms ◽  
Areas Of Concern ◽  
External Actors ◽  
Security Incidents

Purpose The purpose of this study is to expand on the existing literature by specifically examining data security incidents within the hospitality industry, assessing origins and causes, comparing breaches within the industry with those of other industries and identifying areas of concern. Design/methodology/approach A sample of data breach incidents is drawn from the Verizon VERIS Community Database (VCDB). Statistical comparisons between hospitality and non-hospitality industry firms are conducted following the Verizon A4 threat framework. Findings The results reveal that breaches between hospitality and non-hospitality firms differ significantly in terms of actors, actions, assets and attributes. Specifically, proportions of breaches in the hospitality industry are larger in terms of external actors, hacking and malware, user devices compromised and integrity violations. Additionally, compared to other industries, point-of-sales (POS) system breaches occur at a higher rate in the hospitality industry. The study finds that company size, hacking and malware predict the likelihood of a POS breach. Research limitations/implications The study uses secondary data and does not include the entire universe of data breaches. Originality/value In the quest to reduce data breach incidents, it is imperative to identify and assess the nature of data breach incidents between industries. Doing so permits the development of targeted industry-specific solutions rather than generic ones. This study systematically identifies differences between hospitality and non-hospitality data security incidents and then suggests areas where hospitality companies should focus future attention to mitigate breach incidents.

scholarly journals Non-executive reporting requirements for public companies

2009 ◽  
Vol 5 (2) ◽  
pp. 36-41
Author(s):  
Mark Rome
Keyword(s):  
United States ◽  
Value Added ◽  
The United States ◽  
Publicly Traded ◽  
Public Companies ◽  
Publicly Traded Companies ◽  
Executive Staff ◽  
Reporting Requirements

Non-Executive Reporting Requirements should empower non-executive staff of publicly traded companies with a structured process to communicate value-added information directly with analysts, investors and regulators on a recurring basis without fear of reprisal or reprimand. This paper analyses non-executive reporting requirements for public companies in the United States.

Boards of directors in Russian publicly traded companies: the gender aspect

2018 ◽  
pp. 142-155 ◽  
Author(s):  
T. A. Garanina ◽  
A. A. Muravyev
Keyword(s):  
Boards Of Directors ◽  
Company Performance ◽  
Corporate Boards ◽  
Publicly Traded ◽  
Publicly Traded Companies ◽  
Representation Of Women ◽  
Female Directors ◽  
Female Director ◽  
Gender Aspect ◽  
Longitudinal Dataset

This article studies the gender composition of corporate boards of Russian companies, including its relation to company performance. The analysis is based on a unique longitudinal dataset of virtually all Russian companies whose shares were traded on the stock market in 1998-2014. It shows a relatively small representation of women, just 12% of all the seats, while about 40% of the companies did not have any female director. At the same time, both the share of companies that appoint female directors and the share of female directors on boards show a clear upward trend. The econometric analysis suggests a positive link between the presence of female directors on boards and company performance, especially when firms appoint several, rather than one, female directors.

The Market Value and Reputational Effects from Lost Confidential Information

2015 ◽  
Vol 5 (4) ◽  
Author(s):  
Joseph K. Tanimura ◽  
Eric W. Wehrly
Keyword(s):  
Information Security ◽  
Market Value ◽  
Direct Costs ◽  
Publicly Traded ◽  
Confidential Information ◽  
Publicly Traded Companies ◽  
Security Breaches ◽  
Customer Information ◽  
Employee Information

According to many business publications, firms that experience information security breaches suffer substantial reputational penalties. This paper examines incidents in which confidential information, for a firms customers or employees, is stolen from or lost by publicly traded companies. Firms that experience such breaches suffer statistically significant losses in the market value of their equity. On the whole, the data indicate that these losses are of similar magnitudes to the direct costs. Thus, direct costs, and not reputational penalties, are the primary deterrents to information security breaches. Contrary to many published assertions, on average, firms that lose customer information do not suffer reputational penalties. However, when firms lose employee information, we find significant reputational penalties.

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