Digital Commons Network^™

Can Corporate Sustainability Performance (Csp) Overcome Indonesia's Corporate Debt Problems?, Johnson Ferry Febrian, Nora Sri Hendriyeni

Jurnal Akuntansi dan Keuangan Indonesia

Based on IMF publications (2022), Indonesian companies have a risky debt level that may cause bankruptcy, so companies are required to make leverage adjustments to return the debt to its optimal level. In recent years, corporate sustainability performance (CSP) practices have been proven to improve performance and overcome financial problems such as debt by integrating sustainability aspects into business processes. Based on stakeholder theory and trade-off theory, this study aims to examine the effect of CSP on leverage adjustment and the role of competitive advantage, equity mispricing, profitability, and firm size in moderating this relationship. This study used a sample …

Beyond The Number: Tone Analysis In Annual Reports, Ani Wilujeng Suryani, Dinda Tustika Apta Fauz

Jurnal Akuntansi dan Keuangan Indonesia

In making decisions, stakeholders utilize not only quantitative information but also qualitative information, such as annual reports. However, annual reports in narrative form are often used to exaggerate company performance data. One aspect that influences stakeholders’ decision is tone. This study aims to examine the impact of positive tone disclosure in management analysis reports and discussions on company value. This study was conducted on 166 financial and property companies listed on the IDX. Management analysis and discussion reports were categorized according to their tone. Using linguistic inquiry and word count software (LIWC-22), the procedure yielded more precise and consistent analysis. …

Do Fundamental Financial Ratios Affect The Company's Stock Price? Indonesia Evidence, Arumega Zarefar, Armadani Armadani

Jurnal Akuntansi dan Keuangan Indonesia

The objectives of this research aims to examine the effect of corporate fundamental financial ratios on stock prices and to examine whether firm age determine stock prices in the perspective of signaling theory. Here Generalized Least Squares (GLS) approach was used as the main analysis technique, and Ordinary Least Squares (OLS) was incorporated for the robustness test. The research was conducted on companies listed on the Indonesia Stock Exchange during the 2014-2020 period. This study finds that return on assets, solvency ratio, and Tobin's Q positively affect stock prices, that cash ratio has a negative effect on stock prices, and …

To Protect Or To Hide: An Investigation On Corporate Redacted Disclosure Motives Under New Fast Act Regulation, Yan Ma, Qian Mao, Nan Hu

Research Collection School Of Computing and Information Systems

China adopted amendments allowing companies to redact filings without prior approval in 2016. Leveraging this change as a quasi-nature experiment, we explore whether managers utilize redacted information to withhold bad information in the more lenient regulatory environment. Our investigation uncovers a significant shift in managerial behavior: Since 2016, managers incline to employ redactions to obscure negative news rather than safeguarding proprietary data. Furthermore, we find that the poorer firm performance and a higher cost of equity are associated with the redacted disclosures after 2016, suggesting that investors perceive an increase in firm-specific risk attributed to withholding bad news through redactions.

2024 Private Capital Markets Report, Craig R. Everett

Pepperdine Private Capital Markets Report

The Pepperdine private cost of capital survey was originally launched in 2007 and is the first comprehensive and simultaneous investigation of the major private capital market segments. This year’s survey specifically examined the behavior of senior lenders, asset-based lenders, mezzanine funds, private equity groups, venture capital firms, angel investors, privately-held businesses, investment bankers, business brokers, limited partners, and business appraisers. The Pepperdine survey investigated, for each private capital market segment, the important benchmarks that must be met in order to qualify for capital, how much capital is typically accessible, what the required returns are for extending capital in today’s economic …

Moving Forward: Automating A Walmart Executive View From Existing Manual Financial Systems, Alexandra Rosen

Finance Undergraduate Honors Theses

Walmart, the largest retail giant globally, is a company that needs no introduction. Headquartered in Bentonville, Arkansas, it has become synonymous with retail innovation and efficiency. Last summer, I had the unique opportunity to immerse myself in Walmart’s culture and the world of finance and accounting through Walmart's Accounting and Finance Development Program (AFDP) internship. This analysis examines my summer in the program and applies my experience to the importance of in-person office work.

Accounting And Finance Internship Thesis, Peyton Fair

Finance Undergraduate Honors Theses

During the summer of 2023, I had the opportunity to intern for ten weeks at Walmart Inc. in the Accounting and Finance Development Program (AFDP). The AFDP internship provides participants with hands-on training and experience in various areas of accounting and finance within Walmart. Participants work in various business areas across Walmart US, Walmart International, Sam's Club, and Walmart Inc.

In the summer of 2023, there were 38 AFDP interns representing 18 different universities. The AFDP internship provides opportunities for interns to attend networking events, interact with executives, and receive feedback on their performance through evaluations. This program aims to …

Lululemon Strategic Audit, Tessa Mozingo, Olivia Eno, Molly Mitchell, Connor Morrissey, James Eshleman

Honors Theses

This case study focuses on lululemon, a prominent athleisure apparel company. Our team conducted an audit of the company revolving around strategic business management principles. Our research used publicly available information that included the company’s website, SEC filings, news articles, lululemon’s annual reports, financial statements, IBIS industry reports, and online sources. The goal of this strategic audit is to develop an understanding of lululemon’s business activities and strategies, collect and analyze both internal and external data, and evaluate lululemon based on strategic management concepts.

In this strategic audit, we conduct internal, external, performance, and competitive analyses and an examination of …

The Governance Of Director Compensation, Lily Fang, Sterling Huang

Research Collection School Of Accountancy

The average total compensation of directors in U.S.-listed companies was $342,030 in 2020, 5.06 times the median household income. Directors set their own pay, giving rise to potential self-dealing. We argue and document that in the presence of self-dealing, external mechanisms such as legal standards act as effective means of governance. Following a landmark Delaware court ruling that subjected director pay to a more stringent legal standard, Delaware-incorporated firms reduced director compensation relative to non-Delaware firms and experienced positive and non-transient stock price reactions. Our results indicate that proper governance of director compensation enhances firm value.

Lockheed Martin Strategic Audit, Trevor Deboer, Gunnar Lombard, Sam Nelson, Tj Taylor, Paul Wynegar

Honors Theses

Abstract

This case study explores Lockheed Martin, a global leader in defense contracting. Our team performed a strategic audit using the theories of strategic management. Our research was pulled from various sources, including Lockheed Martin’s website, SEC filings, related news articles, and relevant industry analysis. The goals of this case study revolved around collecting data and performing analysis to evaluate Lockheed Martin’s potential for competitive advantage in the airplane and parts manufacturing industry.

Some of the various analyses performed on Lockheed Martin include firm analysis, industry analysis, internal analysis, external analysis, competitive dynamics, business-level strategy, corporate-level strategy, and exploring their …

Bidding Strategy For A Wind Power Producer In Us Energy And Reserve Markets, Anne Stratman

Department of Electrical and Computer Engineering: Dissertations, Theses, and Student Research

Wind power is one of the world's fastest-growing renewable energy resources and has expanded quickly within the US electric grid. Currently, wind power producers (WPPs) may sell energy products in US markets but are not allowed to sell reserve products, due to the uncertain and intermittent nature of wind power. However, as wind’s share of the power supply grows, it may eventually be necessary for WPPs to contribute to system-wide reserves. This paper proposes a stochastic optimization model to determine the optimal offer strategy for a WPP that participates in the day-ahead and real-time energy and spinning reserve markets. The …

Finance And Artificial Intelligence, Luke Schawang

Theses/Capstones/Creative Projects

The integration of artificial intelligence (AI) into finance represents a significant evolution in the industry, one that has been ongoing for years but is now accelerating rapidly. This paper explores the various forms and functions of AI, from reactive machines to the potential for superintelligence, and examines its impact on banking, business finance, and investing.

In banking, AI has bolstered cybersecurity and fraud detection, leveraging machine learning algorithms to continuously improve accuracy and efficiency. Similarly, in business finance, AI tools like chatbots and algorithms streamline processes, enhance productivity, and reduce costs. In investing, AI-driven solutions such as robo advisors offer …

Project Foresight Annual Report, 2022-2023, Paul J. Speaker, Paul J. Speaker

Faculty & Staff Scholarship

Project FORESIGHT is a business-guided self-evaluation of forensic science laboratories across the globe. The participating laboratories represent local, regional, state, and national agencies. Economics, accounting, finance, and forensic faculty provide assistance, guidance, and analysis. Laboratories participating in Project FORESIGHT have developed standardized definitions for metrics to evaluate work processes, linking financial information to work tasks, and functions. Laboratory managers can then assess resource allocations, efficiencies, and value of services—the mission of Project FORESIGHT is to measure, preserve what works, and change what does not.

The benchmark data for the 2022-2023 performance period includes laboratory submissions for a variety of fiscal …

Industry Peer Information And The Equity Valuation Accuracy Of Firms Emerging From Chapter 11, Bingxu Fang, Sasan Saiy

Research Collection School Of Accountancy

Valuation plays a central role in determining Chapter 11 reorganization outcomes. However, obtaining accurate valuation estimates of reorganized firms is challenging because of limited firm-specific market-based information and the oft-conflicting incentives of claimholders. We examine the role of industry peer information in reducing misvaluations and its implications for unintended interclaimant wealth transfers and postreorganization performance. First, we find that the availability of relevant industry peer information is negatively associated with equity valuation errors for firms emerging from Chapter 11. Cross-sectional results suggest that the relation between industry peer information and valuation errors varies substantially with debtors’ information environment and case …

Two Essays On The Board Of Directors, Dipesh Bhattarai

Doctoral Dissertations

The board of directors plays a crucial role in corporate governance, serving as a vital mechanism to oversee and guide firms towards achieving their goals. Given the importance of boards in the corporate governance framework, we still do not have clear understanding of how directors' characteristics influence the governance and performance of firms. This dissertation ties together two chapters that contribute to this area of research, each focusing on different aspects of directors' influence on corporate governance and firm value.

The first chapter, "The Effect of Director Wealth on Corporate Governance and Firm Value," examines the impact of a director's …

Capitalism, Global Militarism, And Canada’S Investment In The Caribbean, Tamanisha J. John

Class, Race and Corporate Power

At the end of the 1990s, there existed a belief that a growing Canadian military involvement in the Caribbean region was unlikely if it was not associated with Canada’s interest in Latin America (Klepak 1996). This view had such a large impact that today there is a dearth of information on Canada’s military involvement in the Caribbean region. Lacking systematic investigation, two myths have perpetuated: first that Canada has no stake or interest in Caribbean security, insofar as those interests cannot be tied to Canada’s interests in Latin America; and second, that all expressions of Canada’s involvement in Caribbean security …

"Just Beat It" Do Firms Reclassify Costs To Avoid The Base Erosion And Anti-Abuse Tax (Beat) Of The Tcja?, Stacie O. Laplante, Christina M. Lewellen, Daniel P. Pynch, Daniel M. P. Samuel

Research Collection School Of Accountancy

This study examines whether multinational corporations (MNCs) reclassify related-party payments to avoid the new base erosion and anti-abuse tax (BEAT). The Tax Cuts & Jobs Act of 2017 included the BEAT to combat income shifting from the U.S. to foreign entities. An exclusion in the tax law provides MNCs an incentive to reclassify related-party payments as cost of goods sold. We use a triple-difference design that leverages the BEAT filing threshold of $500 million in revenue and the parent company’s location to document increases in the unconsolidated sales of foreign subsidiaries of MNCs subject to BEAT relative foreign subsidiaries of …

Meme Stocks, Robinhood, And Wall Street: Retail Investors And Changing Market Dynamics, Nick Murray, Spencer Brosnan

Senior Theses

This thesis explores the rise of retail investors in the wake of the COVID-19 pandemic, and how they have changed the landscape of financial markets. We outline the full timeline of the GME and AMC social media craze that exemplified the power of retail investors in the market and investigate the impact the COVID-19 pandemic had on this group. Through the use of VandaTrack, a software that tracks retail investors’ trading activity, we were able to quantify the impact that retail investors have on US equities and ETFs and compare them to the market as a whole. We utilized this …

Capital Expenditure Dynamics In Asean: Unveiling Determinants And The Impact Of The Covid-19 Pandemic On Non-Financial Corporations, Solikin M. Juhro, Dhaha Praviandi Kuantan, Charvin Lim

Bulletin of Monetary Economics and Banking

This study investigates the intricate determinants influencing the capital expenditure behavior of Non-Financial Corporations (NFCs) in major ASEAN countries over the past decade. Employing a fixed effect panel analysis encompassing 1,488 NFCs in Indonesia, Malaysia, Thailand, and the Philippines, our study unveils a robust and statistically significant relationship between corporate financial performance and capital expenditure. Notably, indicators such as profitability, market value, and cash flow rate demonstrate a positive association with heightened capital expenditure. Furthermore, macroeconomic conditions and policy-related variables emerge as influential factors affecting capital expenditure decisions. Stringent financial conditions tend to hamper firm investment decisions, whilst interest rate …

[Discussions] Vol. 19 Iss. 1

Discussions

This issue of Discussions was published for the Spring 2023 cycle.

U.S. Public Equity Esg Fund Composite And Parnassus Core Equity Fund: Performance And Factor Attribution, Karthik Nemani, Barrett Buhler

Discussions

This is the first paper to examine all U.S. public equity Environmental, Social, and Governance (ESG) funds offered by the Forum for Sustainable and Responsible Investment’s (SIF) institutional member firms from 2005 to 2020. For ease of communication, this will be called the ESG Composite. With a Net Asset Value (NAV) over $150 billion, these funds comprise nearly half of the U.S. public equity ESG investment landscape. The article finds that the ESG Composite maintains performance with the Standard and Poor’s (S&P) 500 total return index on an overall returns basis with lower volatility, indicating greater risk-adjusted returns. Factor analysis …

Institutions And Corporate Tax Evasion: A Review Of The Literature And A Methodological Exploration, Kiridaran Kanagaretnam, Jimmy Lee, Chee Yeow Lim, Gerald J. Lobo

Research Collection School Of Accountancy

We first review the recent research published in JIAR on the influence of international institutions on accounting practices and follow it with a discussion of the literature studying the influence of institutions on tax avoidance and tax evasion. We then explore a new methodological approach that draws on the theory of institutional hierarchy proposed by Williamson (2000) and examine the relative importance of three broad types of institutions (informal, formal and media) in curtailing perceived tax evasion activities. We contribute to the international accounting literature by summarizing the recent research that addresses tax avoidance and tax evasion and providing preliminary …

Segment Disaggregation And Equity-Based Pay Contracts, Young Jun Cho, Hojun Seo

Research Collection School Of Accountancy

We study the role of segment disaggregation in equity-based pay contracts in diversified firms. Disaggregated segment disclosures can improve the observability of managerial actions in internal capital markets and thus increase implicit incentives for managers to allocate resources as desired by shareholders, substituting for explicit incentives provided to CEOs. We use the adoption of Statement of Financial Accounting Standards No. 131 as an identification strategy and find that firms affected by this segment reporting mandate significantly decreased the provision of equity-based incentives in the post-adoption period, especially for firms with higher operating volatilities. This effect is also more pronounced for …

Valuing Circularity: Sustainable Finance With Real Options Methodology, Mostafa Alloub

Theses and Dissertations

This thesis presents an enhanced framework for valuing circular investments based on the Value Hill model using real options analysis. We propose a new flexible numerical methodology for valuing circularity using the Least Squares Monte Carlo simulation (LSMC) method of Longstaff and Schwartz (2001). The Value Hill model of circularity represents the course followed by the value of an asset, specifically after primary use. To validate the efficiency of our model, we conduct an empirical study on the smartphone business using the case of Apple. Results of our empirical analysis show that investing in circularity enhances financial value. Our model …

Retail Investors And Corporate Governance: Evidence From Zero-Commission Trading, Dhruv Aggarwal, Albert H. Choi, Yoon-Ho Alex Lee

Law & Economics Working Papers

We examine the effects of the sudden abolition of trading commissions by major online brokerages in 2019, which lowered stock market entry costs for retail investors, on corporate governance. Firms already popular with retail investors experienced positive abnormal returns around the abolition of commissions. Firms with positive abnormal returns in response to commission-free trading subsequently saw a decrease in institutional ownership, a decrease in shareholder voting, and a deterioration in environmental, social, and corporate governance (ESG) metrics. Finally, these firms were more likely to adopt bylaw amendments to reduce the percentage of shares needed for a quorum at shareholder meetings. …

Audit Evidence, Technology, And Judgement: A Review Of The Literature In Response To Ed‐500, Dereck Barr‐Pulliam, Christopher G. Calvin, Marc Eulerich, Arpine Maghakyan

Accounting Faculty Publications

In October 2022, the International Auditing and Assurance Standards Board (IAASB) issued Exposure Draft 500 (ED-500). This is focused on revising and integrating the standard auditors use when evaluating audit evidence during an external audit. This study contributes to the ongoing discourse as the IAASB evaluates feedback to ED-500 and executes its standard-setting agenda. We review academic literature published in the past 10 years to synthesize extant knowledge specifically on the use of technology and the application of professional skepticism during audit evidence evaluation. Our review offers factors the IAASB should consider when seeking to modernize and future-proof its standards, …

Firm Reaction To Geopolitical Crises: Evidence From The Russia-Ukraine Conflict, Asif Ui Alam, Erik Devos, Zifeng Feng

Hunt Institute Working Paper Series

This paper investigates corporate announcements related to the Russia-Ukraine conflict of S&P 500 firms. We observe that firms withdrawing from Russia or suspending operations possess higher cash levels. Additionally, firms with more cash seem to announce withdrawals or suspensions more promptly. These findings suggest that cash levels are pivotal in how firms respond to geopolitical events. While cash does not seem influential when firms announce donations due to the conflict, it does affect the speed of such announcements. Social media also appear to play a significant role. Examining investor reactions to donation or withdrawal/suspension announcements, we report negative returns surrounding …

The Inflation Reduction Act’S Role In Shaping Pharmaceutical Investment Strategies, Grace Harbour

Honors Theses and Capstones

The impact of the Inflation Reduction Act of 2022 on the financial strategies of pharmaceutical companies is the focus of this study, emphasizing research and development and capital expenditures. The act introduces a significant change in U.S. healthcare policy by enabling Medicare to directly negotiate the prices of select drugs. Employing a difference-in-differences analysis framework, this study analyzes data from both treated and control firms from Q1 2020 to Q4 2023 to evaluate the immediate financial responses of pharmaceutical companies to this significant legislative change.

Common Ownership And Analyst Forecasts, Qiang Cheng, Shuqing Luo, Jinping Zhang

Research Collection School Of Accountancy

We examine the effect of the common ownership relation between brokerage houses and the firms covered by their analysts (referred to as co-owned brokerage houses, co-owned firms, and connected analysts, respectively) on analyst forecast performance. Common ownership can help the connected analysts have better access to co-owned firms, leading to higher-quality analyst research. However, common owners have incentives for higher valuation of the co-owned firms and thus can exert pressure on the connected analysts to issue optimistically biased research reports for these firms. We find that common ownership improves analyst forecast accuracy. This result is robust to a difference-in-differences design …

Factores Que Dificultan La Rentabilidad Y Estabilidad Financiera De Las Pymes Del Sector Mobiliario En Bogotá, Duván Norberto Contreras Solaque, Ruddy Lorena Guevara Méndez

Maestría en Finanzas

Desde la literatura se identifican elementos que dificultan el normal funcionamiento de las Pymes como: falta de planeación estratégica, escasa profesionalización del talento humano, crisis económicas a nivel nacional e internacional, dificultad de acceso al sistema financiero, entre otros; lo anterior no les permite tener estabilidad y generar rentabilidad en el mercado. Por estas razones, el propósito de la presente investigación es analizar los factores que determinan la rentabilidad y la estabilidad financiera de las pymes del sector de fabricación de muebles especializado en el mobiliario institucional y de oficinas en Bogotá. La metodología está soportada desde una visión pragmática …