Importance of Machine Learning in Making Investment Decision in Stock Market

Executive Summary Predicting stock trends in the financial market is always demanding but satisfying as well. With the growing power of computing and the recent development of graphics processing unit and tensor processing unit, analysts and researchers are applying advanced techniques such as machine learning techniques more and more to predict stock price trends. In recent years, researchers have developed several algorithms to predict stock trends. To assist investors interested in investing in the stock market, preferably for a short period, it has become necessary to review research papers dealing on machine learning and analyse the importance of their findings in the context of how stock price trends generate trading signals. In this article, to achieve the stated task, authors scrutinized more than 50 research papers focusing on various machine learning algorithms with varied levels of input variables and found that though the performance of models measured by root-mean-square error (RMSE) for regression and accuracy score for classification models varied greatly, long short-term memory (LSTM) model displayed higher accuracy amongst the machine and deep learning models reviewed. However, reinforcement learning algorithm performance measured by profitability and Sharpe ratio outperformed all. In general, traders can maximize their profits by using machine learning instead of using technical analysis. Technical analysis is very easy to implement, but the profit based on it can vanish too soon or making a profit using technical analysis is almost difficult because of its simplicity. Hence, studying machine, deep and reinforcement learning algorithms is vital for traders and investors. These findings were based on the literature review consolidated in the result section.

Joint Provision of Non-audit Services to Audit Clients: Empirical Evidences from India

Executive Summary The provision of non-audit services (NAS) by an incumbent auditor has remained a highly contentious issue. One school argues that the joint provision does not impair an auditor’s independence. Instead, it reduces total costs, enhances the ability to detect material misstatements, increases technical competence due to knowledge spillovers and leads to intense competition. However, a substantial tranche of an audit firms’ income is derived from NAS, and the joint provision increases economic ties with the client. Therefore, another school of thought perceives that the joint provision impairs auditor independence. It is also alleged that auditors expect non-audit work after finishing the auditing job. Their independence is also affected by the risks of self-review. Extant literature reveals that the majority of the studies on the issue are archival and experimental. The studies are concentrated in the US, UK, Australia, Malaysia, Nigeria, South Africa, China, and some of the European Union Nations. The article examines the perspective of chartered accountants (CAs) on the joint provision of NAS in India. The study samples 119 CAs. The reliability of the survey result was measured using Cronbach’s α, and a score of 0.77 indicated acceptable internal consistency reliability. The data were analysed using Wilcoxon signed-rank test and the Mann Whitney U test statistic. The summary of their suggestions for ensuring auditor independence is presented separately. The findings reflect that existing prohibitions imposed by the Companies Act, 2013, are not enough to ensure auditor independence, and the Management Services u/s 144 of the Act needs to be clearly defined. Practitioners do not support the proposition that joint provision should end and a separate category of professionals be mandated to render NAS. However, the recommendations include strengthening provisions to reduce the conflict of interest.

Communicating Through a Pandemic: Insights on Crisis Communication from Steel Authority of India Limited, Rourkela Steel Plant

Executive Summary The year 2020 will go down in the annals of history as the year of COVID-19, the year the whole world was left devastated. Even in 2021, countries are being ravaged by the virus, with no immediate end in sight. In fast-moving and uncertain situations, leaders face many questions for which they might not have any answers ( Argenti, 2020 ). Therefore, the question is how leaders can manage the communication environment with clarity, consistency and empathy during this period of extreme disruption ( Glinska, 2020 ). Crisis communication is generally defined as the accumulation and dissemination of information during crisis situations to alleviate the severity of the crisis. This study outlines and analyses the communication strategies and measures adopted by the management of one of the biggest manufacturing industries of the country, the Steel Authority of India Limited, Rourkela Steel Plant (RSP), during this ongoing COVID-19 crisis. A survey on the efficacy of the communication measures adopted by the management was conducted on 345 employees. The results showed a high level of support for all the implemented communication measures. Yet employees at the junior level articulated a need for better communication exchange with the top management. They perceived their voices as going unheard and sought additional communication channels connecting them to the highest authority. Considering the feedback received from the employees, additional communication measures were adopted. RSP’s Mass Contact Exercise was revived in an online format. A mobile app was developed containing all information and guidelines that an employee would need regarding precautions, prevention, testing and treatment of COVID-19. Quick and clear communication at every juncture let RSP tide through arguably the toughest pandemic period. Thus, it should always be ensured that appropriate communication channels are effectively implemented for vital information to reach every corner of the organization.