Measuring the Financial and Nonfinancial Performance of Micro-Enterprise in Pahang, Malaysia

ABSTRACT This paper empirically examines the interactive effect of competition intensity and competition type on the use of customer satisfaction measures in executives' annual bonus contracts. Specifically, we predict a stronger association between competition intensity in an industry and the use of customer satisfaction measures in executives' annual bonus contracts when the competition is non-price-based than when the competition is price-based. Using hand-collected data from Standard & Poor's (S&P) 1500 firms' disclosures of the use of customer satisfaction measures in executive bonus contracts in 2006 and 2010 proxy statements, we find results consistent with our prediction. Our results are robust to alternative measures of competition type and competition intensity. We also find similar results when we use the weight on customer satisfaction measures in executive bonus contracts as the dependent variable. Our study extends the literature on the effect of competition on the design of managerial incentives by distinguishing between competition intensity and competition type, and providing the first large-sample empirical evidence on the joint effect of these two dimensions of competition on the incentive use of an important nonfinancial performance measure. Data Availability: Data used in this study are obtained from publicly available sources.

Download Full-text

The Value of Assurance on Voluntary Nonfinancial Disclosure: An Experimental Evaluation

Auditing A Journal of Practice & Theory ◽

10.2308/aud.2009.28.1.137 ◽

2009 ◽

Vol 28 (1) ◽

pp. 137-151 ◽

Cited By ~ 90

Author(s):

Paul J. Coram ◽

Gary S. Monroe ◽

David R. Woodliff

Keyword(s):

Attribution Theory ◽

Performance Indicators ◽

Stock Price ◽

Annual Report ◽

Corporate Disclosure ◽

Financial Report ◽

Nonfinancial Performance ◽

Assurance Services ◽

Context Specific

SUMMARY: This study examines whether assurance on the voluntary provision of nonfinancial performance indicators affects the stock price estimates of a group of sophisticated financial report users. We conducted an experiment where participants were provided with a case study containing excerpts from a hypothetical company's annual report. Nonfinancial performance and assurance were manipulated in a 2 (positive and negative nonfinancial performance indicators) ×2 (assurance and no assurance) +1 (control condition) between-subjects design. After reading the case materials, the participants indicated whether they believed the company's stock price would increase or decrease based on the information provided. As expected, we found that the nonfinancial performance indicators had a significant effect on stock price estimates. In addition, consistent with attribution theory, an assurance report on the voluntarily disclosed nonfinancial performance indicators only had a significant effect on stock price estimates when the nonfinancial performance indicators were positive, suggesting that the value of assurance is context-specific. Our research contributes to the discussion on the value of expanded assurance services and also on the value of enhanced corporate disclosure.

Download Full-text

Sustainable Banking and Bank Performance

Jurnal Ilmiah Akuntansi dan Bisnis ◽

10.24843/jiab.2021.v16.i01.p12 ◽

2021 ◽

Vol 16 (1) ◽

pp. 169

Author(s):

Lilik Handajani ◽

Akram Akram ◽

Ahmad Rifai

Keyword(s):

Structural Equation ◽

Structural Equation Models ◽

Stock Exchange ◽

Bank Performance ◽

Business Practices ◽

Stakeholder Groups ◽

Nonfinancial Performance ◽

Banking Business ◽

Sustainability Reports ◽

The Impact

This research aims to examine the impact of sustainable banking practices and bank characteristics on bank performance. Structural equation models were used to analyze 11 banks listed on the Indonesia Stock Exchange that published sustainability reports consistently during the periods of 2015–2018. Results indicate that while the internalization of sustainability issues in banking business practices does not have a significant impact on bank performance, the characteristics of a bank, which are reflected by institutional and foreign ownership and bank age, have a significant effect on bank financial and nonfinancial performance. The implications of sustainable banking practices are indicated to gain legitimacy from regulators for the existence of financial entities and meet stakeholder expectations, which in practice require trade-off of interests among stakeholder groups. Keywords: sustainable banking, bank performance, bank characteristic

Download Full-text

Financial and Nonfinancial Performance of Micro Enterprises in Selected Area in Malaysia

International Journal of Science and Research (IJSR) ◽

10.21275/art20175235 ◽

2017 ◽

Vol 6 (7) ◽

pp. 340-345

Keyword(s):

Nonfinancial Performance ◽

Micro Enterprises

Download Full-text

On the Association between Current Period Budget Target Achievability and the Properties of Nonfinancial Measures

Journal of Management Accounting Research ◽

10.2308/jmar-51536 ◽

2016 ◽

Vol 29 (2) ◽

pp. 47-62 ◽

Cited By ~ 3

Author(s):

Jizhang Huang ◽

Ramji Balakrishnan ◽

Fei Pan

Keyword(s):

Performance Metrics ◽

Incentive Payment ◽

Positive Interaction ◽

Financial Measures ◽

Current Period ◽

Nonfinancial Measures ◽

Nonfinancial Performance ◽

Incentive Contracting ◽

Future Outcomes

ABSTRACT Firms usually employ nonfinancial performance metrics (NFPMs) to measure progress toward long-term outcomes. They also often evaluate current performance by comparing outcomes on financial measures with budgeted targets. Thus, they can motivate actions that sacrifice current profit for favorable future outcomes directly by increasing the rewards for such actions and indirectly by reducing their opportunity cost. Combining these arguments, we examine the relation between the properties (congruity and measurability) of NFPMs used in incentive contracting and the achievability of the current period budget target, where achievability is the probability of obtaining the incentive payment tied to current period performance. Survey data from 179 divisions in Chinese firms support our prediction of a positive (negative) association between the congruity (measurability) of NFPMs and budget achievability. We also document an expected positive interaction effect between congruity and measurability.

Download Full-text